Trade Trends News

Foreign Trade Update | Global Trade Protectionism Rises, Emerging Sectors Accelerate Breakthroughs

I. Core Trade Policy Highlights

 1. US Proposes Penalty Tariffs on 60 Economies, Supply Chain Compliance Pressures Rise

      On June 2, the Office of the US Trade Representative (USTR) released a proposal to impose additional tariffs of 10% or 12.5% on imports from 60 economies under Section 301 of the Trade Act of 1974. This move is seen as the latest attempt by the US administration to rebuild its tariff system after the Supreme Court ruled tariffs imposed under the International Emergency Economic Powers Act invalid in February this year.

      Under the proposal, economies that have enacted legislation to prohibit imports of goods made with forced labor would face a 10% tariff. This group includes 14 economies such as Canada, the European Union, the United Kingdom, Mexico, Indonesia, and Pakistan. Another 46 economies — including China, India, Japan, South Korea, Brazil, and Australia — that have not "effectively implemented" such measures would face a 12.5% tariff.

      The proposal has triggered immediate backlash. Australian Prime Minister Albanese publicly stated that the tariff measures are "unreasonable" and reflect ideological differences between the two countries. Mexico warned that the move would undermine the US-Mexico-Canada Agreement (USMCA) and destabilize deeply integrated North American supply chains. Brazil issued a statement "strongly opposing" the measure, accusing the US of distorting labor protection issues, and said that if negotiations fail, it will accelerate the search for alternative trading partners. India and Switzerland, while denying the allegations, expressed willingness to continue dialogue within the framework of bilateral trade negotiations.

      Foreign Trade Tip: For enterprises engaged in cross-border assembly, transit trade, or multi-country sourcing of raw materials, this move indicates that trade protection tools are extending from specific origins to global multi-lateral supply chain reviews. Companies are advised to urgently examine compliance documentation for upstream raw material procurement from the 60 affected economies, prepare anti-circumvention risk plans, and closely monitor the USTR's public hearings on the new tariffs scheduled for July.

2. Customs Expands Random Inspection of Exports, Infant Products and Low-Voltage Electrical Equipment Become Key Targets

      On May 8, the General Administration of Customs issued Announcement No. 57 of 2026, deciding to implement annual random inspection of certain import and export goods outside the statutory inspection list, effective June 1. The new policy includes infant products and low-voltage electrical equipment in the "dual random, one open" random inspection system. Affected categories include baby bottles and nipples, children's toys, children's clothing and footwear, baby strollers, student stationery, child safety seats, as well as switches, sockets, circuit breakers, relays, plugs, and other low-voltage electrical products. On the import side, newly added categories include food contact products, decorative accessories, adult footwear, and electronic products.

      It should be noted that this is not the first time Customs has implemented such random inspections. As early as 2025, Customs began random inspections of import and export goods outside the statutory inspection list. According to data released by the General Administration of Customs on June 5, 2025, a total of 755 batches were inspected, of which 134 batches were found to be non-compliant, with an overall non-compliance rate of 17.75%. The new policy merely expands the scope to include export infant products and low-voltage electrical equipment, reflecting a continued strengthening of safety, hygiene, environmental protection, and consumer rights protection.

      Foreign Trade Tip: For enterprises exporting the above categories, the physical inspection rate and technical indicator verification frequency at ports will increase significantly. It is recommended to strictly self-inspect key technical indicators such as pressure resistance, flame retardancy, and hazardous substance content before shipment, and ensure that third-party test reports and certification labels such as CCC and CE are fully consistent with customs declaration data to avoid return or detention due to failed inspections.

 3. Canada Extends Steel and Aluminum Import Restrictions by One Year, Trade Protectionism Continues to Rise

      On June 3 local time, the Canadian government formally announced a one-year extension of its import restrictions on steel and aluminum from countries other than the US and Mexico. The new validity period runs until the end of June 2027. Under the rules, import volumes from other countries will be limited to half of 2024 levels, with shipments exceeding the quota subject to a 50% penalty tariff. The measure still requires cabinet approval.

      Canada's Minister of Finance stated that the move aims to protect the domestic steel and aluminum industries and prevent global overcapacity and trade diversion from impacting domestic producers. In addition to the extension of import restrictions, a tariff rebate program for businesses has also been extended concurrently.

      Foreign Trade Tip: For enterprises exporting construction steel, aluminum profiles, and metal structural components, trade barriers in Europe and the US are spreading from crude steel to high-value-added processed products. It is recommended that affected companies reasonably utilize export quotas, actively cooperate with industry associations to establish anti-dumping defense mechanisms, and appropriately shift market focus to emerging markets with strong infrastructure demand, such as Central Asia, Eastern Europe, and Southeast Asia.

 II. International Market Snapshot 

1. US-EU Trade Frictions Continue to Simmer

     Bernd Lange, chair of the European Parliament's International Trade Committee, stated that if the United States imposes new tariffs on EU goods after the agreement reached between the two sides last year, "this would be unacceptable." Lange criticized that the US increasingly gives the impression of deciding on measures first and then looking for legal justification. In April 2025, the EU and the US reached a partial agreement on withdrawing tariffs on steel and aluminum, but this US move could once again strain the fragile reconciliation.

 2. German Online Retail Expected to Rebound

      The German Retail Federation forecasts that driven by high brick-and-mortar operating costs, Germany's online retail sales will grow by 4.3% year-on-year in 2026, outpacing offline growth. This trend sends a positive signal to cross-border e-commerce enterprises targeting the European market.

 3. Russia Expands RMB Financing

      Russia's Ministry of Finance and major energy entities have formally expanded the issuance of RMB-denominated sovereign and corporate bonds to counter the impact of EU and US financial sanctions. This move provides more local currency settlement possibilities for bilateral trade. China-Russia enterprises can focus on business opportunities arising from the facilitation of cross-border RMB settlement.

4. Bank Indonesia Intensifies Forex Intervention

     Bank Indonesia announced that it will increase intervention in the foreign exchange market through multiple channels, including spot and domestic non-deliverable forwards (DNDF), to stabilize the rupiah. Companies with procurement or sales operations in the region are advised to monitor exchange rate volatility and arrange risk hedging in advance.

 5. South Korea to Take Regulatory Action on Leveraged Investments

     South Korea's finance minister expressed concern over capital flow volatility caused by a surge in leveraged stock investments and said special action would be taken to address "herd behavior" in the market. Changes in foreign capital flows in the South Korean stock market may indirectly affect the financing environment and market confidence of export enterprises in the region.

6. Eli Lilly Reduces German Investment Amid Cost Control Concerns

     Citing concerns that the German government's proposed healthcare cost control measures could undermine investment certainty, US pharmaceutical giant Eli Lilly announced it would cut the scale of its $2.5 billion production project in Germany by 50%. This move indicates that investment in the global healthcare sector is being influenced by policy directions in various countries. Relevant enterprises should monitor policy stability in destination markets.

 7. Latin America's NEV Localization Presents Opportunities

     The Colombian government announced it will promote local assembly of new energy vehicles (NEVs) through industrial policies, planning to offer significant tariff reductions on imported CKD kits. This is a positive signal worthy of attention for NEV, parts exporters, and companies considering local production in the region.

 III. Domestic News Briefs

     Commerce Ministry Criticizes US Semiconductor Controls: A spokesperson for China's Ministry of Commerce stated that the US practice of overstretching national security concepts and blocking Chinese companies' overseas subsidiaries from procuring chips severely impacts the stability of the global semiconductor production and supply chain. China firmly opposes this.

      MOFCOM Issues Notice on Anti-Dumping Duty Succession for Polyoxymethylene Copolymer: MOFCOM Announcement No. 21 of 2026 clarifies the succession of anti-dumping duty rates for companies importing polyoxymethylene copolymer originating in South Korea, Thailand, and Malaysia.

      Fiber Optic Cable Orders Strong: Driven by the construction of domestic and cross-border AI computing center clusters, leading domestic fiber optic cable companies reported robust orders in the second quarter, with industry sentiment continuing to improve.

      Shenzhen Boosts New Infrastructure Construction: The Shenzhen municipal government issued new regulations explicitly accelerating the construction of cross-border computing networks and next-generation international communication networks, creating supporting opportunities for companies in the new infrastructure sector.

      India's BIS Launches New Online Certification Portal: The Indian Bureau of Standards (BIS) representative office in China announced the official launch of a new online application portal for the certification system for foreign manufacturers. The move will simplify the certification application process for mechanical, electrical, and chemical products, helping shorten certification cycles and reduce corporate compliance costs.

 IV. Foreign Trade Tips

Based on the latest developments this week, foreign trade enterprises can focus on the following areas: 

     3C and toy exporters: Strictly control label compliance before June shipments and ensure test reports align with declaration data in preparation for Customs random inspections.

      Low-speed electric vehicle and agricultural tool exporters: The European online retail growth period is expected to continue. Companies can seize the window of rising online consumption in markets such as Germany and increase platform promotions.

      Steel, hardware, and metal structural component exporters: Closely monitor the European Commission's investigation trends on steel shelving and other niche products, prepare defense materials in advance, and actively expand emerging market channels.

      Companies engaged in transit trade with the US: Closely follow the tariff process on 60 economies and hearing developments at the USTR, and conduct supply chain compliance checks as early as possible.

      Businesses targeting Africa: With China's zero-tariff policy for 53 African countries with diplomatic relations taking effect on May 1, relevant companies are advised to pay attention to the certificate of origin application process in advance and seize growth opportunities in China's imports of African specialty agricultural products and primary processed goods.

      Businesses targeting Russia: Russia's expanded issuance of RMB bonds provides more convenience for China-Russia RMB settlement. Companies in machinery, electronics, agricultural products, and cross-border logistics are advised to actively utilize this arrangement to optimize exchange rate risk management.

     Exchange rates and capital flows: Measures such as Bank Indonesia's intensified intervention and South Korea's move to control leveraged investments indicate that emerging market economies are actively responding to capital flow pressures. Companies involved in these markets should plan exchange rate hedging in advance to protect gross margins.

     Customs credit management: Random inspection results directly affect corporate credit ratings. Exporters are advised to establish internal quality management records, retain test reports and certification documents for each batch for future review, and make compliance management a routine practice.

     Policy tracking: The European Commission's anti-dumping investigation into Chinese steel shelving and other niche metal storage equipment warrants attention. Companies involved in these categories should prepare defense strategies in advance.