Wendy Cutler, former acting deputy U.S. trade representative, says that the first bucket of Section 301 tariffs, the ones tailored to Made in China 2025, worked. Even though Cutler is generally not a fan of tariffs, she said, "I think those succeeded … in getting China to negotiate in earnest."
Exports to China
China and Singapore signed a memorandum of understanding to improve the electronic customs certificates process for ships and shipping companies, according to a Sept. 5 report from Xinhua, China’s state-run news agency. The agreement will “boost customs clearance efficiency” and “reduce the burden of shipping enterprises and ships,” the report said.
U.S. export controls are confusing, burdensome and often place U.S. companies at a disadvantage compared with foreign competitors, the American Chamber of Commerce in Shanghai said in an Aug. 29 report.
The planned U.S. and Chinese tariff increases are expected to go forward as scheduled and escalation will continue "until both sides feel enough economic, market and/or political pain to strike a deal," said Bank of America Merrill Lynch global economists Ethan Harris and Aditya Bhave in a Sept. 3 research report. "The recent escalation has opened an almost insurmountable gap in terms of numbers and trust," the economists said. "The only real question is whether the Trump Administration takes the politically dangerous step of imposing tariffs on headline consumer products in December. We think they give it a go: given the supply chain lags it will mainly impact consumer prices after the holidays. All told we expect US tariffs against China to increase from about $63bn in August to more than $115bn by yearend, with Chinese tariffs on US products rising from $20bn to $25bn."
The Treasury’s Office of Foreign Assets Control announced sanctions on a shipping network that moves hundreds of millions of dollars of oil for Iran, Treasury said in a Sept. 4 press release. The network includes dozens of ship managers, ships and “facilitators” overseen by Rostam Qasemi, a senior Iranian military official and the country’s former minister of petroleum. The sanctions target 16 entities, 10 people and 11 ships.
Rep. Ron Kind, co-chairman of the New Democrats' trade task force, said U.S. Trade Representative Robert Lighthizer has done a good job on outreach, and sounding sympathetic to Democrats' complaints about enforceability, labor and other issues they want changed in the NAFTA rewrite. But Kind, who was speaking to reporters on a conference call from the Midwest on Sept. 4, said that "for some reason there's been a reluctance on sharing paper, putting words down" that would change the trade deal to satisfy these requests.
The U.S.-China trade war has damaged some Japanese manufacturing companies, Japan’s trade minister said during a Sept. 3 press conference, adding that the companies have lost revenue compared to previous years. Minister Hiroshige Seko said Japan’s manufacturing industry in April and June “fell below the previous year for the first time in two years,” according to an unofficial translation of the transcript of the press conference.
The Food and Drug Administration announced that it has “fully transitioned” to its year-old Export Listing Module for the European Union dairy export list and all export lists maintained for Chile and China. U.S. establishments that are currently included on the EU collagen, gelatin or seafood export lists “should submit applications in the ELM if they wish to remain on these lists,” FDA said on its website. And “effective immediately, any U.S. establishment that wishes to be included on any FDA-maintained export list for food products should apply in the ELM,” FDA said. Launched in July 2018 (see 1807100050), FDA’s ELM is “an electronic portal for receiving and processing requests from FDA-regulated establishments that seek to be included on all export lists for FDA-regulated food products” that may be required by some importing countries. FDA said the ELM will notify currently listed establishments that they must resubmit their ELM applications every two years and update their listing information, else they will be removed from the lists.
China has put into place part of the retaliatory tariffs it announced Aug. 23 (see 1908230004). The tariffs increased just after midnight on Sept. 1, just as the latest escalation from the U.S. did. The 10 percent increase in tariff rates applies to 270 products, according to an unofficial translation of a China Customs Tariff Commission document.
President Donald Trump told reporters that the negotiating meeting planned for September with the Chinese "is still on." He told reporters on Sept. 2 that "that hasn’t changed. They haven’t changed and we haven’t. We’ll see what happens."