Many Chinese leather tanneries have applied for and received tariff exemptions from China’s retaliatory tariff on U.S. goods, according to a March 17 emailed alert from the Leather and Hide Council of America. The council also said China is granting tariff exemptions for products beyond what was included in the original announcement that contained nearly 700 U.S. goods (see 2002180039). The U.S. Department of Agriculture Foreign Agricultural Service issued a March report on China’s step-by-step tariff exclusion guide, providing a translation of the guide to help “familiarize” the U.S. food and agricultural industry with the process. The report contains details on how Chinese companies apply for exclusions, how they document their record of transactions, and what information they must submit to the Chinese authorities. The exclusion process opened March 2.
Exports to China
President Donald Trump, asked about a letter from businesses and trade groups sent earlier on March 18 that said he should lift sections 232 and 301 tariffs, said he couldn't imagine why Americans would want that. “China is paying us billions and billions of dollars in tariffs and there’s no reason to do that,” reporters quoted him as saying at a press conference. "It could be that China will ask for a suspension or something. We’ll see what happens. China is having a very rough time.”
Although Chinese ocean operations and domestic trucking activities are returning to normal, there remains significant concerns over equipment and space availability for ocean fighters around the world, according to a March 17 emailed alert from Crane Worldwide Logistics. Air cargo transportation also remains uncertain, with availability of ports in China constantly changing and countries canceling flights to regions with high concentrations of coronavirus cases, the alert said.
Export Compliance Daily is providing readers with some of the top stories for March 9-13 in case you missed them.
As the coronavirus outbreak continues, Chinese authorities have approached companies committing trade violations with more leniency than in the past, according to a March 17 report from Reuters. China has rolled out several measures to forgive violations, including a reduction of penalties for delayed import declarations (see 2003120019), and has relaxed other regulations, such as waiving import duties on emergency vehicles and medical supplies (see 2002140028). Reuters said the relaxed penalties have also applied to forged value-added tax invoices, where China has only issued warnings instead of more severe punishments. China has told its authorities to avoid detaining or arresting business operators who are “not dangerous to society and who show remorse after giving themselves up,” Reuters said.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said the export restrictions on masks, respirators, medicines and other goods needed for responding to the COVID-19 pandemic is “a bad cycle,” and he urged the president and world leaders “to work together on a coordinated response on the epidemic.” Grassley, who was speaking with reporters on a conference call March 16, said restrictions reduce global supply and lead to higher prices. “I was encouraged to see the G7 leaders' statement today,” he said, which mentioned support for global trade.
The European Commission announced export controls on shipments of certain protective medical equipment, which will now require authorizations before being sent to third countries, according to a March 15 press release. Several European countries also announced travel restrictions due to the coronavirus, including Germany and Poland, which may impact supply chains and cargo shipments.
China’s Commerce Ministry recently launched a “Public Information Service Platform for Cultural Trade” to guide China’s cultural export “enterprises” during the coronavirus outbreak, according to a March 16 report from the Hong Kong Trade Development Council. The platform also provides updates on coronavirus policy changes relating to trade and tax measures and contains country guides for exporters.
The U.S. trade representative has had “no conversations” with China about possible delays in agricultural purchase commitments due to the coronavirus pandemic, according to coronavirus guidance issued by the U.S. Department of Agriculture. The guidance, which includes a series of frequently asked questions to address virus-related concerns for traders and others who have been impacted, said no delays under the U.S-China phase one deal are expected. “We expect that the Chinese will meet their commitments under the agreement,” the USDA said.
The Department of Commerce denied Zimo Sheng’s export privileges after Sheng was convicted of violating the Arms Export Control Act, Commerce said in a March 16 order. Sheng attempted to illegally export to China the “upper assembly” for a Glock 48 pistol, which is listed on the U.S. Munitions List. Sheng was convicted Dec. 13, 2018, and sentenced to 40 months in prison and a $200 fine. After the sentencing, Commerce said Sheng left the U.S. and his “current whereabouts are unknown” to the Bureau of Industry and Security. Commerce revoked Sheng’s export privileges for 10 years from his date of conviction.