China is in the headlines again in this week’s trade news, with its car exports facing questions from the US over the potential risks they pose to US consumers. There’s another green headache for the EU as its Carbon Border Adjustment Mechanism (CBAM) struggles to reap reports, meanwhile, and a false start for racing medals after Red Sea disruption.
The big picture: The US is to begin investigating Chinese car exports to the country after president Joe Biden called for an exploration of measures to limit China’s ability to hit US national security through “connected vehicles”, according to reporting by the FT today.
Arguing that modern cars are often “smartphones on wheels”, Biden said that China’s policy in the sector “could flood our market” and pose “risks to our national security”. He added that he was “not going to let that happen on my watch”.
Gina Raimonda, the US commerce secretary, emphasised that it was important to explore options to control imports of Chinese cars before they entered the US market in large numbers. Their ability to harvest information from biometric data to geographical records “could pose a serious risk”, she said.
One official added that, beyond the security implications, the investigation was also motivated by the government’s fears that Chinese imports would hit “a strong US auto industry” – the Chinese government, for its part, called it a “clearly discriminatory approach”.
Good week/bad week: It was a good week for digital trade as a host of organisations signed the Collaboration Agreement on a new Trade Logistics Information Pipeline (TLIP) at the World Trade Organization’s 13th Ministerial Conference (MC13). The Institute of Export and International Trade (IOE&IT) was among the signatories.
It’s been a less positive week for the CBAM, as few firms in Europe complied with reporting requirements around carbon emissions in supply chains that recently entered into force. The FT reports that fewer than 10% of Germany’s 20,000 companies filed reports on emissions by the 31 January deadline, while Sweden saw only 11% of expected reports returned. Firms will be fined for failing to comply starting in mid-July.
How’s stat? 49.1 – that’s the purchasing managers’ index for manufacturing in China published today for the month of February. It marks a drop from 49.2 in January and continues a five-month run of contractionary numbers. It comes as foreign direct investment hits a record low in the country and deflationary pressures persist.
The week in customs: We updated yesterday on how the NIREM code, used by some using the Customs Declaration Service (CDS), is changing. Traders will no longer use the NIREM code for goods that don’t meet the criteria to move under the UK Internal Market Scheme (UKIMS) from 24 March. We noted that this change will apply even if traders are ‘not at risk’ due to the applicable EU rate of duty being zero or equal to or less than the UK rate, in the case of goods moving from a country outside both the UK and the EU.
Quote of the week: "Continuing this moratorium is essential. As the chair of the UK’s E-commerce Trade Commission, I call on all parties to reach agreement on this.” IOE&IT director general, Marco Forgione, on an extension to the E-Commerce Moratorium, currently being debated at MC13.
What else we covered this week: A host of iconic British products are being granted extra protections with a new set of Geographical Indications (GIs) in Japan. Those affected include Cornish pasties, Welsh lamb and Scotch beef.
Danielle Keen presented a deep dive into the issue of human rights abuses in supply chains, including how CEOs are becoming increasingly conscious of the need to identify them, with contributions from IOE&IT expert Sandra Cooper.
Traders’ big asks for next week’s Spring Budget were presented by IOE&IT in Forgione’s letter to the chancellor earlier this month, and we gave analysis of what importers and exporters may want from Jeremy Hunt when he delivers his speech on Wednesday (6 March) next week.
True facts: Today is St David’s Day, Wales’s national day, which commemorates the only patron saint of a country in the British Isles in which the saint was actually born. Not that David did much for Welsh lamb exports; he’s said to have lived exclusively off water and leeks.
