Demand in global air freight markets is being significantly damaged by the U.S.-China trade war, according to the International Air Transport Association. August marked 10 consecutive months of year-on-year decreases in freight volumes, the IATA said, the longest such stretch since 2008. In addition, global export orders are continuing to fall, the association said, and emerging countries may be hurting the most because of their “higher sensitivity” to trade tensions and rising political instability.
Exports to China
The U.S. could violate its World Trade Organization spending limit on subsidies to its farmers as a result of the trade war with China, according to an Oct. 4 Congressional Research Service report. The U.S. could be “vulnerable to a challenge” under the WTO’s dispute system if it exceeds the spending limit and if its farming subsidies induce surplus production and depress market prices, creating unfair market distortions, the CRS said. While the U.S. “probably” did not violate the spending limit in 2018, it could “potentially exceed” it this year, CRS analysts found. The prolonged trade war with China has directly led to the increased U.S. farming aid, which is receiving international “scrutiny,” trade experts have said (see 1909090059).
The Commerce Department’s Oct. 9 blacklisting of several Chinese technology companies may not impact trade negotiations this week but could lead to significant retaliation against U.S. companies, trade experts said. And while the Trump administration insisted the Entity List decisions were unrelated to trade talks with China, the move unnerved U.S. companies impacted by the trade war that fear Commerce’s announcement could expedite the release of China’s so-called "unreliable entity list."
China’s State Council adopted a draft regulation on Oct. 8 to improve the country’s “business environment” by easing market access, simplifying tax procedures and other measures, according to an Oct. 9 report by Xinhua, China’s state-run news agency. China stressed that “government services should be enjoyed with unified criteria by all types of market players on an equal basis” for both “domestic and foreign companies.”
Chinese technology companies and the country’s foreign ministry criticized the U.S.’s decision to add 28 Chinese entities to the Commerce Department’s Entity List, a move that could lead to countermeasures, China said. China denied the allegations in Commerce’s announcement that it was involved in human rights violations of the country's Uighur population and urged the U.S. to “immediately” withdraw the Entity List additions, which it called “serious violation[s]” of international norms. “China will continue to take firm and powerful measures to resolutely safeguard national sovereignty, security and development interests,” a foreign ministry spokesperson said during an Oct. 8 press conference, according to an unofficial translation of a transcript.
President Donald Trump said the U.S. and China “could do something very substantial” when Chinese officials travel to Washington for trade talks this week, but he dismissed the idea of a partial deal.
Certain manufacturers in China are eligible for value-added tax refunds for the filing period that began July 1, 2019, “and for subsequent filing periods,” according to an Oct. 8 report from the Hong Kong Trade Development Council. The move is aimed to boost the development of China’s advanced manufacturing industries, the report said. The refund can be used by companies with a majority of total sales coming from “non-metal mineral products, general equipment, special equipment, computers, communications and other electronic equipment,” the HKTDC said.
The U.S. is considering selling military goods to Greece as part of the defense cooperation agreement the two sides signed Oct. 4, Secretary of State Mike Pompeo said. Speaking with reporters, Pompeo also said the U.S. plans to pitch U.S. companies on doing business with Greece, warned Greece about doing business with China and did not rule out the possibility of sanctions or other measures against Turkey if it begins offshore drilling near Cyprus.
The U.S. Chamber of Commerce, the Information Technology Industry Council and 25 other trade groups, including groups from Africa, Asia, South America and Europe, have issued a position paper on what they'd like to see in the plurilateral E-Commerce Agreement at the World Trade Organization. The U.S. and China are both in these talks, and some are concerned that China will oppose what business groups describe as high-standard planks, such as prohibiting data localization and no restrictions on cross-border data flows.
The Commerce Department's Bureau of Industry and Security added 28 entities to its Entity List for their involvement in human rights violations of China’s Uighur population, BIS said Oct. 7. The entities include Xinjiang Uighur Autonomous Region People’s Government Public Security Bureau, 18 of its subsidiaries and eight China-based technology and science companies, including Hikvision, a major supplier of video surveillance products. The announcement takes effect Oct. 9.