China will lift restrictions on imports of certain U.S. nectarines, China’s General Administration of Customs said in a March 4 notice, according to an unofficial translation. China said it will allow nectarines (see 2003100045) that meet certain “quarantine requirements” and published phytosanitary requirements for those imports.
Exports to China
China said it does not think the coronavirus outbreak will cause supply chains to leave the country and have a sustained impact on China’s supply chain base, a Foreign Ministry spokesperson said during a March 11 press conference. “The COVID-19 epidemic only affects the Chinese economy in a temporary and limited manner,” the spokesperson said. He added that industry “still has confidence in China's economic prospects and the resilience of our supply and industrial chains,” and said China hasn’t “seen any major movement of supply and industrial chains from China to other countries due to the epidemic.”
Export shipments out of the Port of Los Angeles fell 5.7% in February compared with last year, and overall traffic through the port fell by nearly a quarter, with declines expected to continue in March, the port said in a press release March 10. The coronavirus has been a major contributor to the decline. “We are more interconnected than ever with our global partners so it’s no surprise that Trans-Pacific maritime trade has been significantly impacted,” Port of Los Angeles Executive Director Gene Seroka said. “As factory production in China remains at low levels, we expect soft volumes in March. Looking ahead to anticipated manufacturing improvements, we will need to return empty containers to Asia and push lingering U.S. export boxes out swiftly,” Seroka said. “We’re actively working with our supply chain partners to be prepared for a cargo surge once production levels ramp up.” Imports were down 22.5% in the month of February. The Lunar New Year holiday in Asia was also a factor in the decline, the release said.
Continued U.S. restrictions on exports of technology to Chinese companies could have “profound negative repercussions” for the U.S. semiconductor industry, significantly depleting their global competitive standing, according to a March 9 report from the Boston Consulting Group. If current export control trends continue or escalate, leading to a further decoupling between U.S. and China, U.S. semiconductor companies could lose “8 percentage points of global share and 16% of their revenues,” the report said. And if the U.S. bans semiconductor companies from selling to Chinese customers, U.S. companies would lose nearly 40 percent of their revenues, the report said, leading to “severe” cuts in research and development and losses of thousands of jobs.
The House Agriculture subcommittee that covers trade asked farmers to tell them how trade is affecting their businesses. They said they are not following President Donald Trump's advice to buy bigger tractors to fill the orders China has promised to make. Rep. Jim Costa, D-Calif., chairman of the subcommittee, quoted Trump's comment about tractors in his opening statement, and said he's skeptical about the phase one deal with China, especially given that the coronavirus outbreak is going to affect China's market demand. He also said he'd heard about American poultry stuck in port because there was no one to move it due to quarantines.
Export Compliance Daily is providing readers with some of the top stories for March 2-6 in case you missed them.
U.S.-China trade tensions have “greatly affected” orders for Vietnamese garment and textile companies, according to a March 10 report from CustomsNews, the mouthpiece for Vietnam Customs. Despite the tensions, “customers of many companies still took priority to choose Chinese producers because of their advantages on production technique, infrastructure and complete value chain,” the report said. “This is a cause leading to shortage of orders in the short term for Vietnamese companies.” Vietnamese companies are also competing for orders with countries “which have lower costs,” including Bangladesh, Cambodia and Pakistan.
The Royal United Services Institute issued a March 5 report stating that a fleet of North Korean cargo ships is delivering coal to China in violation of international sanctions. RUSI called the operation a “large-scale, coordinated effort” to evade United Nations Sanctions, which includes North Korean ships transmitting “fake details” over their Automatic Identification System transponders when visiting Chinese waters. While RUSI says evidence of North Korea shipping coal to China first surfaced in a 2019 UN report, the institute said its findings confirm the UN information despite denials at the time from China. “Not only do North Korean vessels continue to visit this specific region,” RUSI said, “but they are doing so in unprecedented numbers.”
In an annual report about China's compliance with its World Trade Organization commitments, the U.S. trade representative repeated complaints from last year's report (see 1902050024) about how U.S. imports are treated by Chinese customs authorities.
The United Kingdom’s Department for International Trade issued a March 9 guidance for businesses impacted by the coronavirus outbreak. The guidance provides information on how DIT is providing “supply chain disruption support” and other support for businesses that export to China.