Export Compliance Daily is providing readers with some of the top stories for May 4-8 in case you missed them.
Exports to China
Amid rising U.S.-China trade tensions, China released a second round of U.S. goods exempt from retaliatory tariffs, according to an unofficial translation of a May 12 Finance Ministry notice. The announcement came one day after a Chinese state news agency said the country is considering invalidating the phase one deal, citing Chinese officials’ frustration with President Donald Trump’s attempt to blame China for the COVID-19 pandemic.
Chinese direct investment in the U.S. last year fell to its lowest levels in a decade and will likely continue to drop this year, according to a May 11 report from the National Committee on U.S.-China Relations and the Rhodium Group. Investment dropped to $5 billion in 2019 from a decade-high of $45 billion in 2016 due to more investment reviews by the U.S., restrictions on outbound investment by Beijing, the COVID-19 pandemic and rising tensions between the two countries, the report said. The decreased investment may be part of a broader trend caused by the pandemic as industry grows concerned about the consequences of over-dependence on foreign supply chains, the report said.
China is considering imposing tariffs on imports of Australian barley as a result of an ongoing antidumping investigation, Australian grain groups said. The tariff may include a dumping margin of up to 73.6% and subsidy margin of up to 6.9% for Australian barley, according to a May 9 statement from the Grains Industry Market Access Forum, the Australian Grain Exporters Council, GrainGrowers, Grain Producers Australia and Grain Trade Australia. The groups said China “may provide their final determination” by May 19. During a May 11 press conference, a Chinese Foreign Ministry spokesperson called the move a “normal trade remedy investigation” and said it complies with World Trade Organization rules.
China and the European Union are making progress during their investment negotiations and hope to wrap up a comprehensive investment agreement “as early as possible within the year,” according to an unofficial translation of a May 11 notice from China’s Commerce Ministry. Previous reports indicated the talks might last through 2021, according to the Hong Kong Trade Development Council, particularly because of EU concerns that China’s investment market is “considerably less open than the EU’s” and investment in a “number of sectors is restricted or prohibited.” China said it is “willing to accelerate investment agreement negotiations” to “jointly boost confidence” between the two countries and increase cooperation during the COVID-19 pandemic. The U.S. planned to lobby the EU to increase scrutiny of foreign investment involving sensitive technologies, including investment from China (see 2002260042).
Sen. Josh Hawley, R-Mo., announced that he's introducing a joint resolution that the U.S. should withdraw from the World Trade Organization. Such a resolution, if it were to pass, would not be binding.
Both the U.S. and China still plan to meet their commitments under the phase one trade deal despite the economic disruption of the COVID-19 pandemic, U.S. Trade Representative Robert Lighthizer said. During a May 7 conference call, he, Treasury Secretary Steven Mnuchin and China’s Vice Premier Liu He agreed “good progress” is being made by both sides to “make the agreement a success,” USTR said. The officials also discussed measures being taken by the U.S. and China to support their economies during the pandemic and agreed to hold more conference calls on a “regular basis.”
The U.S. needs a clearer strategy for leading 5G and artificial intelligence standards-setting to counter China’s growing tech leadership, technology experts said. The Trump administration should define a strategy and work with allies to set global standards, the experts said, or risk forcing its companies out of global markets because of restrictions placed on China.
Republican lawmakers urged the Commerce Department to be more transparent when imposing export restrictions on critical U.S. industries, saying they are concerned that Commerce did not consult with industry before imposing significant export regulations last week. In a May 6 letter, six senators asked President Donald Trump to more closely follow congressional intent as described in the 2018 Export Control Reform Act, which lists a preference for a public comment period and multilateral export controls over unilateral decisions.
The government of Canada issued the following trade-related notices as of May 8 (note that some may also be given separate headlines):