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 recently took “several additional actions” (see 2002250055) to meet its agricultural purchasing commitments under the phase one U.S.-China trade deal, including lifting restrictions on imports of nectarines and beef, and updating lists of approved U.S. exporting facilities, the U.S. Department of Agriculture said in a March 10 news release. The USDA also pointed to China’s recent announcement of its tariff exclusion process (see 2002180039), including new exclusions for imported U.S. hardwood products. “These implementation measures are promising steps showing that China is taking steps to fulfill their purchase commitments,” Secretary Sonny Perdue said in a statement. Perdue expects China to begin fulfilling its agriculture-related purchase commitments by the summer (see 2003040029).
Senate Finance Committee Chairman Sen. Chuck Grassley, R-Iowa, told reporters that the coronavirus outbreak's impact on China's factories has shown policymakers that the U.S. is too dependent on China for imports. “There ought to be more manufacturing in the United States, but that isn't just on pharmaceuticals, but that could be on anything you're having these supply chains are being interfered with,” he said March 11 in his office at the Capitol.
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 Compliance Daily is providing readers with some of the top stories for March 2-6 in case you missed them.
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.
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.”
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.