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China’s Escalating Trade Showdown; U.S. Imposes Exporting Controls

By Paul Page

 

The Suzhong International Container Terminal at China’s Rugao earlier this month. PHOTO: CFOTO/ZUMA PRESS

The Logistics Report won’t publish on Wednesday in observance of the Juneteenth holiday in the U.S. Look for us back in your inbox on Thursday.

The tariff-laced trade battle between China and Western countries is deepening. Beijing just launched an anti-dumping probe into pork imports from the European Union, the WSJ reports, a likely retaliation against the EU’s recent moves to increase levies on imports of Chinese electric vehicles. The investigation shows trade tensions are mounting between China and the 27-member bloc, suggesting that a global battle that began over China’s role in technology trade may be extending into far broader areas. China is the EU’s biggest overseas market for pork, importing $6.45 billion of pork products in 2023. Spain alone accounts for roughly one fifth of China’s total pork imports. There are suggestions that further actions are coming from Beijing, including possible extra levies on imports of cars that would hit German exporters. The EU has been lobbying Beijing to keep agriculture out of trade disputes, but escalation now looks more likely.

  • China’s premier says long-strained relations affecting trade between Beijing and Australia now are “on the right track.” (Nikkei Asia)
 
 
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Quotable

“We used to sell a lot of fleece jackets in extra, extra large. Now everything has gone down by at least one size.”

— Edmond Moss of apparel retailer AllStar Logo, on the demand for smaller sizes on the growing popularity of weight-loss drugs.
 

Government & Regulation

The violations involved shipments sent to China and Dubai. PHOTO: WU ZHIZUN/ZUMA PRESS

The U.S. is flexing its regulatory muscle over the shipment of potentially sensitive technologies abroad. The Commerce Department is barring an Oregon freight forwarder from exporting for three years after the Portland-based company failed to improve its compliance with U.S. export-controls laws following a 2021 settlement. The WSJ’s Dylan Tokar reports the so-called denial order is a rare step that could effectively shut down USGoBuy’s operations given the nature of the company’s business. The use of the order against an American company illustrates how the U.S. has stepped up enforcement of trade compliance restrictions to control the flow of technologies that might give an edge to global rivals such as Russia and China. In March, the Bureau of Industry and Security released guidance to freight forwarders on how to comply with the export-controls regulations. A USGoBuy audit turned up 176 instances where the company violated export-control mandates.

  • Adidas is investigating potential compliance violations in China after allegations that executives in the country received kickbacks from service providers. (WSJ)
  • A subsidiary of Swiss commodities trader Trafigura will pay $55 million to settle charges it impeded whistleblower communications. (WSJ)
  • The U.S. is targeting procurement, trading and maritime companies in Oman and China that authorities believe are aiding Yemen’s Houthi rebels. (Lloyd’s List)
 

Number of the Day

1.068

The Cass Freight Index for May, seasonally adjusted, down 3.1% from April in the third straight month-to-month decline and the lowest level for the measure of U.S. domestic shipments since July 2020.

 

In Other News

China’s industrial production growth slowed in May while the housing market moved deeper into contraction. (WSJ)

A measure of factory activity in New York state improved this month but remained in contraction. (MarketWatch)

Electric-vehicle startup Fisker filed for bankruptcy protection and has been winding down operations. (WSJ)

Tesla is suing electric-vehicle battery supplier Matthews International for allegedly disclosing trade secrets to other companies. (WSJ)

A bankruptcy court approved the sale of the assets of clothing retailer Express, which will be folded into a new online retailing venture. (WSJ)

Port operator DP World plans to spend $3 billion over the next three to five years on seaport and logistics infrastructure in Africa. (Bloomberg)

Broker Braemer says new orders for natural gas tankers and containerships have pushed delivery dates at Asian shipyards to 2029. (Splash 247)

German shipowning group Peter Döhle Schiffahrts is ordering new containerships for the first time in nearly a decade. (The Loadstar)

Experts attribute a sharp decline in the loss of containers at sea to research on how to manage the phenomenon known as parametric rolling. (Maritime Executive)

Advance Auto Parts is close to completing a unified distribution network in the U.S. taking in 14 warehouses. (Supply Chain Dive)

Claudio Graziano, 70, chair of Italian state-backed shipbuilder Fincantieri, was found dead at his home. (Financial Times)

AAA Cooper CEO Reid Dove will become chairman of the trucker and Charles Prickett will replace him in the executive role at the unit of Knight-Swift Transportation. (Trucking Dive)

Air Incheon won the rights to acquire the cargo business of fellow South Korean carrier Asiana Airlines. (ch-aviation)

The international popularity of South Korean films and TV shows is triggering an exporting boom for the country’s instant noodle makers. (Forbes)

 

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on X at @WSJLogistics.

 
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