Oil tankers are steering clear of Venezuelan waters as the industry braces for a host of U.S. sanctions on ships operating in the Venezuelan oil sector, according to a June 9 Reuters report. Reuters previously reported the U.S. is preparing sanctions on dozens of foreign oil tankers for doing business with Venezuela, which could include designations on at least 40 ships. The move could lead to sharp increases in tanker rates and disrupt the global shipping industry, Reuters said.
Exports to China
Rep. Suzan DelBene, a House Ways and Means Committee member who also leads on trade in the New Democrats, said she's worried that the participation of “so many countries” at the World Trade Organization in e-commerce talks -- including China -- will mean that the result will not be a high-standard agreement.
U.S.-China technology competition and the Trump administration’s restrictions on Huawei have likely dashed the prospects of a phase two trade deal, China experts said. The experts also agreed that the phase one purchase agreements are unlikely to be met, even as the U.S. trade representative continues to tout progress on Chinese purchase commitments (see 2005210036).
Germany is benefiting from both its use of partial unemployment and its handling of the COVID-19 pandemic, and manufacturers in electronics, machinery and equipment and the auto sector are back to pre-crisis levels, according to Ludovic Subran, chief economist of Allianz. Subran, who was speaking on a June 9 webinar on globalization hosted by the American Institute for Contemporary German Studies at Johns Hopkins University, said German firms will have an edge over those in other countries that didn't keep workers employed during the shutdown measures taken to control the spread of the novel coronavirus that causes COVID-19.
The European Union is talking about including a carbon tax on imports as it comes out of the COVID-19-driven recession, and Russia, the U.S. and China asked about these plans at a World Trade Organization meeting June 8, wondering if such a tariff could be levied within the WTO rules. Russia asked what sectors would be subject to the tax, and why, and asked if the EU is hoping to protect the steel industry under the pretext of fighting climate change.
A U.S. official again argued that the U.S. has the authority to invoke snapback sanctions under the Iran nuclear deal and threatened to impose them unless an international arms embargo against Iran is extended. Brian Hook, the U.S. special representative for Iran, said the U.S. will trigger a United Nations provision to reimpose a host of international sanctions against Iran if the arms embargo, set to expire in October, is not extended. Without the embargo, Iran could import a range of advanced military weapons from China and Russia, Hook said. “One way or another, we're going to accomplish this,” he said, speaking during a June 9 virtual talk hosted by the Heritage Foundation.
China will continue to reduce logistics and transportation costs for traders to accelerate the country’s recovery from the COVID-19 pandemic, according to a June 3 report from Xinhua, China’s state-run news agency. The measures, introduced in part by the Ministry of Transport, emphasize the use of electronic certificates and call for “facilitation of customs clearance” in the railway sector, the report said. China will also continue to lower fees and taxes related to logistics. China previously lowered transportation costs for traders (see 2003190039).
Export Compliance Daily is providing readers with some of the top stories for June 1-5 in case you missed them.
While the U.S.-Hong Kong Policy Act of 1992 gives the president clear authority to terminate Hong Kong's special status if China violates the island's autonomy, the fact that Hong Kong has its own membership in the World Trade Organization could complicate the matter, the Congressional Research Service says. In a June 5 “legal sidebar,” CRS said that not only is it not clear when the administration would end Hong Kong's special trade status, it's also not clear whether the U.S. would say it no longer acknowledges Hong Kong's membership in the WTO.
A foreign investment review bill being considered by the United Kingdom will significantly expand the number of transactions subject to reviews and create greater due diligence requirements for U.K. companies, trade lawyers said. As more countries aim to increase their foreign investment screening, particularly the U.S. (see 2005200032), the U.K. is hoping to better protect its industry from trade theft and national security threats, the lawyers said.