President Trump surprised pundits and assorted watchers of the ongoing simmering trade war between China and the US on Sunday, when he pledged to help China’s telecom giant ZTE Corp “get back into business, fast” after a U.S. ban crippled the technology company, offering a job-saving concession to Beijing ahead of high-stakes trade talks this week.
President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!
— Donald J. Trump (@realDonaldTrump) May 13, 2018
What surprised most, however, is that Trump appears to make this concession out of the blue, without any obvious pressure out of China which has been patiently biding its time until the US implements sanctions under Section 301.
Maybe not: according to Reuters, on Monday China’s customs said it had ramped up inspections of U.S. pork and had taken unspecified regulatory steps on high-risk waste imports. In a move that could potentially cripple another group of exporting US farmer, China’s General Administration of Customs said it has increased inspections of U.S. pork imports “after finding problems recently”, according to a fax it sent to Reuters.
Today’s news confirms a report from Reuters which last week, according to which Beijing had stepped up inspections of pork imported from the United States, a move that many saw as a warning by Beijing in response to sweeping U.S. trade demands made on China.
And while China’s customs administration denied that it was targeting the US, saying it had not taken extra steps to check imports of U.S. agricultural products, instead giving equal treatment to inspections of agricultural products from all countries and districts, the U.S. had become the largest exporter of waste that failed checks, the customs said. Surely this was purely a coincidence.
The pork halt was merely the latest quiet escalation in China’s response arsenal: the North American unit of a Chinese customs inspection firm said on May 4 it would suspend checks on cargoes of scrap metal from the United States for a month, effectively halting all imports of U.S. scrap.
Last week, Reuters also reported that imported Ford vehicles are being held up at Chinese ports, underscoring how U.S. goods are facing increased customs scrutiny in China amid a tense trade stand-off.
Three people said Ford cars and those of its premium Lincoln brand were facing unusual delays at customs, with officials asking for extra technical checks. Two of the people said U.S.-made models of some German carmakers, mainly SUVs, being brought into China, were also affected.
Ford was being asked to do extra checks on emission components, said a China-based Ford executive familiar with the matter, asking not be named because of the sensitivity of the issue.
The world’s two largest economies have been dragged into a trade spat in recent months, which has spread to the agricultural sector, fuelling worries that Beijing and Washington may plunge into full-scale trade war.
The United States has proposed tariffs on $50 billion of Chinese goods under its “Section 301” probe. Those could go into effect in June following the completion of a 60-day consultation period, but activation plans have been kept vague. China has said its own retaliatory tariffs on U.S. goods, including soybeans and aircraft, will go into effect if the U.S. duties are imposed.
However, all that may soon be moot if Trump has indeed folded on the crackdown against Chinese telecom such as ZTE, which more than anything is just a signal to Xi that Beijing may have won the war without firing a single shot.