A new law being considered by China’s National People's Congress could trigger U.S. export controls and cause the U.S. to revoke Hong Kong’s special customs status, said Jude Blanchette, a China expert at the Center for Strategic and International Studies. The new national security law, which is expected to be proposed during China’s current NPC session, would criminalize “treason, sedition and secession,” Blanchette said, and will likely cause the U.S. to enact measures under the Hong Kong Human Rights and Democracy Act, which passed in November 2019 (see 1911290012).
Exports to China
China is seeing “fast improvement” in its international air cargo capacity after taking measures to support cargo flights amid the COVID-19 pandemic, according to a May 21 report from Xinhua, China’s state-run news agency. Xinhua said China has simplified approvals for cargo flights, held additional “peak time for cargo flights at major airports” and encouraged airlines to use all aircraft, including passenger planes, for cargo transport. China is now operating 4,250 international cargo flights per week, the report said, which is a 215% increase “over the average weekly international cargo flight volume during last year.”
The State Department approved a potential military sale to Taiwan worth $180 million, according to a May 20 press release from the Defense Security Cooperation Agency. The sale includes 18 “Advanced Technology Heavy Weight Torpedoes” and other equipment. There are no prime contractors for the sale, which will be procured from U.S. Navy stocks.
Outsourcing wasn't about competitive advantage, U.S. Trade Representative Robert Lighthizer said during an interview with conservative lobbyist Matt Schlapp, in a video branded Conservative Political Action Conference/Live. He said that while the Trump administration believes in competitive advantage, classic economists “never thought of the notion they can create scale through economic nationalism and gain advantage over another country.”
The executive director of the Port of Portland, a port that's dominated by exports, said tonnage is down, and while he thinks there will be some rebound later this year, he expects it will take two to three years to fully return to normal. Curtis Robinhold was speaking on a Washington International Trade Association webinar May 21. He said that grain exports are down 10% and automotive goods are down much more sharply -- by 30%. That includes parts for Toyota, Hyundai and Honda that are imported and exports of completed Ford vehicles, he said.
The Office of the U.S. Trade Representative announced more progress on China’s commitments to purchase U.S. agricultural products under the phase one deal, saying the U.S. expects the commitments to be met. The update highlights China's efforts to allow imports of U.S. fruit, barley, beef, pork, dairy and other goods. “These are difficult times for both our countries,” the May 21 USTR notice said. “It is important that we each continue to work to make our agreement a success.” In a statement, USTR Robert Lighthizer said “we fully expect this agreement to be a success.”
The Trump administration is still considering sanctioning India over purchases of Russian missile defense systems, a top State Department official said. Alice Wells, principal deputy assistant secretary of state for South and Central Asia, said there remains widespread support both within the administration and in Congress for sanctioning buyers of Russian military goods, adding that India needs to choose either U.S. or Russian military equipment, but cannot have both.
China announced changes to electronic manifest submissions for inbound and outbound cargo on freight trains, according to an unofficial translation of a May 29 notice from China’s General Administration of Customs. The measures impact filing procedures, time limits for submissions of documents, declaration requirements, merging manifests and more. The changes will take effect July 1, China said.
China will simplify customs procedures for imports of iron ore, according to an unofficial translation of a May 20 notice from China’s General Administration of Customs. The measures aim to deregulate inspections of iron ore imports and “optimize the port business environment” by conducting on-site inspections and quarantine procedures, China said. The measure will take effect June 1.
The Bureau of Industry and Security is adding 33 companies and governmental bodies to the Entity List for their roles in military and proliferation activities and human rights abuses in China’s Xinjiang province, BIS said May 22.