Your best defence

Trade protectionism is on the rise in the west, so how should Chinese exporters respond? Joanna Law reports

Chinese exporters have been bracing themselves for more challenges with the US and EU regulatory environments continually changing and tightening up. Take the US market as an example. During the Obama administration, trade controls cases – such as those related to US export controls and economic sanctions – against Chinese exporters increased dramatically. It is anticipated that this trend is likely to continue under the Trump administration.

In the past year, the US government has stated that domestic enforcement of anti-dumping and countervailing of duty laws and regulations are among the country’s highest priorities. An example of this effort is the US Customs and Border Protection (CBP) establishing a Trade Enforcement Task Force. Such an effort is the result of the Trade Facilitation and Trade Enforcement Act of 2015, a law that is intended to strengthen the enforcement of anti-dumping and countervailing of duty laws and regulations. The law, among other things, provides additional follow-up measures for domestic parties that make allegations of anti-dumping violations to the CBP.

“The implementation of this new law will impact Chinese exporters that are potentially vulnerable to anti-dumping duty investigations,” says Eugene Lim, a principal at Baker McKenzie’s Singapore office.

Ever since the inauguration of US President Donald Trump, many Chinese exporters have been paying close attention to potential regulatory changes with which the US may be targeting China. As a candidate, Trump labelled China a currency manipulator and vowed to use “every lawful presidential power to remedy trade disputes”, including the application of tariffs. In his first address to the US Congress in March, he signalled that his administration was ready to break World Trade Organization (WTO) rules if China interfered with US sovereignty.

“There has been much speculation that a trade war would be launched after Trump took office,” says Roy Liu, a senior associate at Hogan Lovells in Washington.