The U.S. has asked China to amend its increased export control inspections that are causing delays of medical supply shipments (see 2004160035, 2004150034 and 2004130014), according to a State Department spokesperson. “We appreciate the efforts to ensure quality control. But we do not want this to serve as an obstacle for the timely export of important supplies,” the spokesperson said in an April 17 statement. The spokesperson added that the U.S. has “raised these concerns” with China and requested that it “revise its new requirements to allow the expeditious export of vital [personal protective equipment] to the United States.” The U.S. is working “closely” with U.S. companies exporting medical supplies from China to help them “understand the new regulations and raise concerns about held-up shipments,” the spokesperson said. The request was first reported by Reuters.
Exports to China
The Council on Foreign Relations said that U.S., European and Japanese pushback over Made in China 2025, at least the part on high performance medical devices, may ebb after the coronavirus pandemic has passed -- because other countries will want to implement their own versions. “If any country knows a little bit about reducing industrial dependence on the rest of the world through conscious industrial choices, that would be China,” said Brad Stetser, a CFR senior fellow for international economics, during a webinar April 16. He said China is displacing imported semiconductors, but has been less successful in displacing imported aircraft.
China has received “positive” feedback after increasing inspections of certain medical exports, a Commerce Ministry official said, despite reports of lengthy customs delays due to the measures. The measures, announced earlier this month, increased inspections of 11 medical goods after China received international criticism about the quality of the goods. “Since the implementation of the relevant measures, the effect has been obvious and the international community has made positive comments,” a ministry official said during an April 16 press conference, according to an unofficial translation of a transcript. “I would like to emphasize again that China does not and will not restrict the export of anti-epidemic materials.”
U.S. restrictions on exports of personal protective equipment are not expected to have a significant impact on U.S. industry, particularly because most U.S. companies produce those goods overseas, trade observers said. Companies have been more heavily impacted by recently announced Chinese restrictions on medical exports, which have caused customs delays and a backlog of shipments, the U.S.-China Business Council said.
The U.S. should introduce support measures for U.S. technology industries that are “too critical to fail,” especially those competing for market share with China, the Information Technology and Innovation Foundation said in an April 13 report. As the Commerce Department seeks to restrict sales of emerging technologies to counter Chinese technology theft (see 2004010007), Congress should task the administration with expanding funding for research in those key fields -- including robotics, artificial intelligence and semiconductors -- and target it to “maximize commercialization” of the technologies in the United States. Congress should also support an “industrial investment bank” to increase advanced production in the U.S. and “encourage” the relocation of critical technology production from China to the U.S., the ITIF said.
Container volumes through the Port of Los Angeles fell 30.9% year-on-year in March, marking the lowest amount of cargo moving through the port in a month since February 2009, said the Port of Los Angeles in a recent news release. The deep decline comes as a result not only of the COVID-19 pandemic, but also the ongoing trade war between the U.S. and China, said Gene Seroka, executive director of the port. “With U.S. retailers and cargo owners scaling back orders, volumes are soft even though factories in China are beginning to produce more. Amidst this public health crisis, there will be uncertain months ahead in the global supply chain,” Seroka said. Imports for the month decreased by 25.9% compared with March 2019, and exports by 23.8%. Empty containers declined by 44.5%, the release said.
A group of 31 House lawmakers, led by Rep. Haley Stevens, D-Mich., and Rep. Jackie Walorski, R-Ind., is asking the U.S. trade representative to delay the switch-over to the U.S.-Mexico-Canada Agreement auto rules of origin (ROO), even as the USMCA takes over from NAFTA. The group's letter, sent April 10, said the delay “is necessary to allow the auto industry an appropriate adjustment period and account for delays caused by the COVID-19 pandemic. Alternatively, we ask that you seriously consider other accommodations or flexibilities that will allow the automotive sector to avoid being penalized by the new requirements upon the agreement’s entry into force.”
China’s Commerce Ministry and the Industrial and Commercial Bank of China signed a “memorandum of cooperation” in an effort to stabilize foreign trade and investment, the Commerce Ministry said April 13, according to an unofficial translation of a news release. The ministry said it will share more information about “foreign-invested” and “foreign funded enterprises” with the bank, which will allow the bank to increase “credit support” and offer more services to foreign companies during the COVID-19 pandemic, China said. These services include “cross-border supply chain finance, improved “service quality” and starting “green channels.”
China’s new export inspections for quality control on certain medical equipment (see 2004100043) caused “immediate” delays of shipments as traders and manufacturers tried to understand how best to comply, according to an April 11 report in The New York Times. Producers, freight agents and other stakeholders said the delays have lasted anywhere from a few hours to a few days, the report said.
The government of Canada issued the following trade-related notices as of April 10 (note that some may also be given separate headlines):