EnThe Commerce Department has added 11 companies to its Entity List, restricting trade due to firms’ alleged participation in Uigher repression in Xinjiang province, China. As outlined in Panjiva’s Q3 Outlook this is likely to be another point of friction between the U.S. and China that may further increase the risk that the phase 1 trade deal breaks down.
Nine of the companies ship goods to the U.S. across the technology and apparel industries, with the sanctions including components shipped indirectly via finished products. Companies that currently source from the 11 firms are not necessarily complicit in the accusations but will nonetheless need to make rapid supply chain decisions in order to avoid being subject to sanctions and / or supply interruptions.
Panjiva’s data for U.S. seaborne imports can be used to determine which firms may have received shipments from the 11 targeted firms in the past 12 months to June 30. The shipping records indicate that Lenovo’s west coast U.S. operations received 50 shipments from Heifei Bitland Information technology, focused on computer systems and parts. In the transportation sector meanwhile KTK Group likely supplied 43 shipments of parts to Alstom, 19 to General Electric and 7 to Wabtec. Among others there was also one shipment to Par Technology by Nanchang O Film.
Source: Panjiva
Many others have likely already terminated relations with the companies targeted for sanctions. Panjiva’s data shows that total U.S. seaborne imports identified as being shipped by the 11 entities slumped 66.9% lower in Q2 compared to a year earlier after falling by 20.3% in 2019 compared to 2018. The slide has been largely down to a slump in shipments of refrigerators which had been shipped by Hefei Meiling in 2016 to Danby Products and Costco.
Source: Panjiva
