Newly released data from the US Department of Commerce provides a window into how escalating tariffs by the United States and China on each other’s goods have impacted bilateral trade. Starting in mid-2018, both sides began implementing steep tariffs and by September 2019, tariffs on both sides covered the majority of products traded. As a result, US imports of Chinese goods dropped 16 percent in 2019 to $452 billion after a record year in 2018—a larger decrease than what was seen in 2009...
China Market Intelligence
While the number of new confirmed cases of the novel coronavirus, COVID-19, could potentially be declining in China as of today, another wave of new infections in China or elsewhere is not out of the question. As the Chinese government continues with containment measures and businesses across China slowly begin to reopen, it will be important for companies to watch the central- and local-level initiatives outlined below.
Companies generally agree that the IP commitments included in the Phase One agreement are a step in the right direction. Some industries are more confident than others that the commitments will improve the protection and enforcement of their IP rights in China in a tangible way. The 30-day window of time between the agreement going into effect and the release of China’s IP Action Plan provides an opportunity for industry to raise recommendations to both governments.
China’s State Council Customs and Tariff Commission released a new list of 696 products subject to China’s Section 301 retaliatory tariffs that will be eligible for tariff exclusions starting March 2, for a period of one year. The list of products covers a significant portion of goods in the expanding trade section of the Phase One agreement, including soybeans, automobiles, aircraft, integrated circuits, oil, and LNG. It also covers goods that made up roughly 50 percent of the United States...
On February 6, 2020, the State Council Customs and Tariff Commission announced that starting on February 14, 2020, the Chinese government will halve the retaliatory tariffs that it put in place on September 1. Tariffs originally at 10 percent will be reduced to 5 percent, and those at 5 percent will be brought down to 2.5 percent. This is commensurate with the US reduction of its September 1 tariffs on about $120 billion in Chinese goods from 15 to 7.5 percent as part of the Phase One trade...
The US government is mounting a whole-of-government approach to address national security concerns associated with ICT supply chain security vis-à-vis China. Actions taken by the executive, legislative, and judicial branches are both inward- and outward-looking. These approaches would have implications for the ability of US companies to continue engaging with certain Chinese customers.
The current novel coronavirus outbreak poses several challenges for companies in affected areas and their employees. Lessons learned during the 2003 SARS outbreak can inform some commercial best practices. Companies that have contingency plans for closures and quarantines will have a head start coordinating next steps.
The system is still far from comprehensive implementation, with several bureaucratic challenges remaining. It is still too early to estimate a measurable impact on companies. The biggest risk for companies to-date is inaccurate data captured in the various social credit databases. Companies should monitor their records vigilantly in sector-specific databases.
The spread of the novel coronavirus originating from Wuhan, China has continued to accelerate during the Spring Festival holiday creating a public health emergency and causing operational challenges and uncertainty for companies operating in affected areas.
Nearly three years after the Cybersecurity Law went into effect, regulatory clarity remains elusive, including around the MLPS 2.0. Most companies are taking a wait-and-see approach until key concepts are defined in more detail.