Economy > Trade

Spoiled Relations: U.S. Goods Stuck at China Ports as Tensions Heat Up

Xinhua Financein The Wall Street Journal
2018-05-14 13:39

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Ford cars and California fruits are among the goods piling up at Chinese ports, the result of increased inspections that business groups say is China’s way of reminding the U.S. how important its market is to American exporters.

Navel oranges, lemons and cherries from California, along with American apples, have been sitting at Chinese wharves for longer than normal as Chinese inspectors spend more time inspecting the fruits for pests and decays, U.S. trade groups said.

Ford Motor Co. vehicles are likewise being subjected to unusually rigorous checks at the port, people familiar with the matter said. Pork is also coming under more frequent inspections, U.S. officials say, as U.S.-China trade tensions show no signs of easing.

The Chinese “are trying to identify industries or sectors that could put pressure on the administration to change its posture,” said Joel Nelsen, president of trade association California Citrus Mutual. He said inspectors are opening and sifting through most of the 900 cartons of citrus fruit in each shipping container.

William Zarit, chairman of the American Chamber of Commerce in China, said China appears to be following a tried-and-true playbook.

“China basically speaks with one voice on trade. It’s not that difficult for the (Communist) party to send out an order and it will happen very quickly—and for the most part, systematically and consistently,” Mr. Zarit said.

With increasing trade tensions between China and the U.S., top executives at the Wall Street Journal D.Live conference talk about how that will affect business.

Last year, amid tensions about South Korea’s deployment of a U.S.-built missile-defense system, China stopped sending tour groups to the country and sales of Hyundai Motor Co. cars in China plummeted. China at one time imposed curbs on imports of Philippine bananas over rival territorial claims in the South China Sea.

China’s General Administration of Customs didn’t immediately respond to a request for comment. Geng Shuang, a Foreign Ministry spokesman, said he wasn’t aware of any effort to restrict U.S. imports.

“In principle,” Mr. Geng said Thursday, “China carries out relevant inspection and quarantine work in accordance with laws and regulations following a scientific and unbiased method.”

Fruit is an easy target in a trade dispute as its passage through customs can easily be delayed on health and safety grounds, an official at a southern Chinese port said.

China’s customs agency said Monday it would start strengthening quarantine inspections on U.S. apples and timber after claiming to have found pests in some recent shipments.

Before last week, U.S. cherries could pass through such quarantine inspections in a matter of hours, said Keith Hu, director of international operations at Northwest Cherry Growers in Washington state. Mr. Nelsen, of California Citrus Mutual, said oranges and lemons would typically take a couple of days to clear the reviews. Now the process is, in some cases, taking five to seven days.

The sector had already been grappling with new tariffs. In April, Beijing increased tariffs on fruit, including lemons and limes to 26% from 11% and 25% on cherries from 10%, along with a number of other U.S. imports. It was in retaliation against the Trump administration’s penalties that have hit Chinese steel and aluminum.

Adding to the problem, temperatures in China are on the rise and most of the fruit, including cherries, should be kept in cool storage ahead of sale. The fear is all of this could push importers to look for fruit suppliers outside of the U.S., the trade groups say.

In the case of Ford, the delay is happening at the Tianjin port, one person briefed about the matter said. Chinese customs officials want to inspect individual components inside the vehicles’ emissions system, which would basically require the car to be disassembled—an impractical step.

That has left these cars stuck at the port in recent weeks, raising storage costs for Ford as it scrambles to figure out how they can be checked, the people said. A Ford spokesman declined to comment, beyond saying the company was monitoring the situation. Reuters first reported on the Ford vehicles holdup.

China also tightened inspections of U.S. pork products last month, boosting its sampling rate of incoming shipments by 20%, according to the U.S. Department of Agriculture. For U.S. pork exporters already dealing with new tariffs that Beijing introduced in April, USDA officials say the tougher customs inspections will likely mean added import costs.

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