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Hong Kong vs. the US – New complaint at the World Trade Organization

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Hong Kong is threatening a new complaint against the United States. Officials say the United States completely ignored Hong Kong’s status as a separate customs territory when imposing new tariffs on China. Hong Kong will take the United States to the World Trade Organization over the issue, Chief Secretary Eric Chan said.

Eric Chan stated that the U.S’s  complete disregard for Hong Kong’s status as a separate customs territory is “completely inconsistent with World Trade Organization rules.”

The move is in response to the U.S. imposing a 10% tariff on goods imported from the Asian financial hub. Last week, the U.S. Postal Service suspended all packages and mail from China and Hong Kong, but quickly reversed the decision. The move has caused some confusion among retailers and express delivery companies about how to deal with the U.S. tariffs.

Hong Kong has long been known as an open and free trade hub, but China’s 2020 imposition of a national defense law on Hong Kong has drawn criticism from the United States. The United States has forced China to end the special status granted to the former British colony under U.S. law, straining relations between the two countries.

In the wake of the move, U.S. President Donald Trump said he had spoken with Chinese President Xi Jinping, but declined to provide details. Trump said they have a “very good personal relationship.” The 47th U.S. president and Xi Jinping spoke before Trump returned to office and discussed issues such as Taiwan, TikTok, trade and more.

Washington and Beijing have had a tense relationship for years, with issues ranging from trade tariffs and cybersecurity to Taiwan, Hong Kong, human rights and the origins of COVID-19. How China-US relations develop during Trump’s second term will depend on the responses from both sides and from countries around the world.

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Panama announced the Belt and Road Initiative exit

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The Panamanian side officially notified Beijing about its decision to exit the Belt and Road Initiative.  The President of Panama, José Raúl Mulino, stated that he instructed diplomats to submit the necessary statement to leave the project.

The president also discussed the decision to enter the agreement and said that he „does not know what the intention of those who signed this agreement [in 2017]. “He also spoke about the lack of benefits this project has brought to the country.

Panama’s decision followed the visit of the US Secretary of State, Marco Rubio, which was preceded by the statements made by Donald Trump about China’s control of the Panama Canal. Marco Rubio also spoke on the issue, saying that having Hong Kong-controlled companies “control the entrances and exits” of the channel is completely unacceptable. He also talked about China’s influence on Hong Kong. He stated, that “If there’s a conflict and China tells them, do everything you can to obstruct the canal so that the US can’t engage in trade and commerce, so that the US military and naval fleet cannot get to the Indo-Pacific fast enough, they would have to do it.”

Panama itself denies the involvement of the US, although the United States assesses the decision openly and positively.

The Chinese side also responded to Panama’s decision: the Chinese Foreign Ministry called on Panama to “make the right decision” and stated that this action was not in the interests of Panama. According to the statement, China hopes that Panama “will make the decision based on the overall situation of bilateral relations and the long-term interests of the two peoples, and eliminate external interference.”

Beijing assesses the actions of the US as pressure on Panama, the purpose of which is to undermine the cooperation within the framework of the Belt and Road Initiative. As for Rubio’s visit to Panama, the Foreign Ministry of China finds that the US Secretary of State’s comments “unjustly accuse China, deliberately sow discord between China and relevant Latin American countries, interfere in China’s internal affairs, and undermine China’s legitimate rights and interests”.

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US Treasury Imposes Sanctions on Network Supplying Iranian Oil to China

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The U.S. Treasury Department announced on Thursday its first financial sanctions under President Donald Trump’s administration, targeting an “international network” involved in transporting Iranian oil to China. According to the Treasury’s statement, this network has been responsible for facilitating the shipment of millions of barrels of Iranian crude oil, valued at hundreds of millions of dollars, to the People’s Republic of China.

These oil shipments were conducted on behalf of Iran’s Armed Forces General Staff and a sanctioned entity known as Sepehr Energy Jahan Nama Pars. The sanctions affect individuals and companies in several countries, including China, India, and the United Arab Emirates.

Furthermore, the Treasury imposed blocking sanctions on two tankers—the Panama-flagged CH Billion and the Hong Kong-flagged Star Forest—due to their role in transporting Iranian oil to China. According to U.S. officials, these vessels “onboarded” Iranian crude from storage facilities in China as part of a scheme that benefited Iran’s military through oil sales.

State Department spokesperson Tammy Bruce emphasized that the objective of these sanctions is to “disrupt illicit funding streams” that finance Iranian armed forces and U.S.-designated foreign terrorist organizations, including Hamas and Hezbollah.

“We will use all tools at our disposal to hold the regime accountable for its destabilizing activities and pursuit of nuclear weapons that threaten the civilized world,” Bruce stated.

Reports indicate that Iranian petroleum exports reached record levels in the first quarter of 2024, with the vast majority destined for China. An investigation published by The Economist in October 2024 estimated that Iran’s petroleum and petrochemical sales generated up to $70 billion in 2023. 

The rising volume of Iranian oil imports by China suggests that PRC-based buyers may believe the financial advantages of purchasing Iranian petroleum outweigh the risks posed by U.S. sanctions. Iranian petroleum is often sold at lower prices than the prevailing market rates, reportedly at a discount compared to Persian Gulf or price-capped Russian suppliers, making it attractive to foreign traders. 

Most PRC-based buyers are reportedly small, semi-independent refineries known as “teapots.” According to one advocacy group, these refineries are “both hard to uncover and not exposed to the U.S. financial system,” which limits the effectiveness of U.S. sanctions. Traders are also said to employ deceptive practices such as relabeling Iranian-origin petroleum and falsifying tanker route data.

“The Iranian regime remains focused on leveraging its oil revenues to fund the development of its nuclear program, to produce its deadly ballistic missiles and unmanned aerial vehicles, and to support its regional terrorist proxy groups,” Treasury Secretary Scott Bessent stated.

“The United States is committed to aggressively targeting any attempt by Iran to secure funding for these malign activities,” he added.

US Treasury Imposes Sanctions on Network Supplying Iranian Oil to China Read More »

Tensions between Beijing and Washington rise over the Panama Canal

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China’s foreign ministry said on February 5 that it had lodged a complaint against the United States. The complaint concerns the US’s “irresponsible” remarks on the Panama Canal and “attacks” on China’s cooperation with Panama over the canal.

Ministry spokesman Lin Jian said at a press conference that China-Panama cooperation under the Belt and Road Initiative is currently progressing normally, despite Panama’s president’s announcement a few days earlier that China may be prematurely terminated from participating in the Belt and Road Initiative and that the agreement will not be renewed.

Lin said he hopes the relevant parties will not change their minds and will not be influenced by external forces, “making the right decision based on the long-term interests of the two countries’ comprehensive relations and the people of both countries.”

It is noteworthy that within hours of the announcement, information about the agreement between the US Department of Defense and Panama spread. US Defense Secretary Pete Hegseth and Panamanian President Jose Raul Mulino agreed to expand cooperation between the US military and Panamanian security forces.

“They agreed on a close relationship and shared security interests, which includes protecting the Panama Canal,” a Pentagon spokesman stated.  

The Panama Canal issue became more active after US Secretary of State Marco Rubio warned Panamanian President Mulino on February 2nd that Washington “will definitely take appropriate measures” if Panama does not immediately take steps to end Chinese control and influence over the Panama Canal.

Rubio shared Trump’s message that the operation of the Hong Kong-based company at the ports at both ends of the canal is a matter of US national security and violates the treaty between the US and Panama. Interestingly, he did not rule out the use of force. Trump said that he does not believe that the use of troops will be necessary, but he will do everything to return the Panama Canal to the USA.

During the meeting with Rubio, the Panamanian president expressed his readiness to review the operations of Chinese businesses in Panama, including those that have been operating in the market for more than 25 years.

The day after Rubio’s call, two Panamanian lawyers filed a lawsuit in the country’s Supreme Court to cancel the concession of the Hong Kong-based company to operate two ports at both ends of the Panama Canal. If the court grants the lawsuit, this will lead to the immediate cancellation of the Panama-China contract.

A subsidiary of CK Hutchison Holdings, owned by Hong Kong billionaire Li Ka-shing, has operated two of the canal’s five ports since it won the bid in 1997.

Tensions between Beijing and Washington rise over the Panama Canal Read More »

“Europe’s Dilemma: Navigating Amid Shifting Global Alliances”

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Since Donald Trump assumed office, Ursula von der Leyen has sought alternative strategies to navigate the evolving landscape of American geopolitics, with a particular focus on strengthening ties with China and India. The European Union must adapt to financial constraints, resource shortages, and emerging geopolitical uncertainties. However, these strategic shifts pose significant risks to the stability of transatlantic relations, potentially reshaping the EU’s position within the global order.

European Commission President Ursula von der Leyen, widely regarded as one of the EU’s most vocal critics of China, reaffirmed the bloc’s balanced approach toward Beijing in a meeting with EU diplomats in Brussels. “We will keep de-risking our economic relationship – as we have been doing in recent years. But there is also room to engage constructively with China – and find solutions in our mutual interest,” von der Leyen said in a speech before the EU’s diplomatic corps in Brussels.

European Commission President Ursula von der Leyen appears determined to position the EU’s green and digital transition as a strategic counterweight to the United States’ continued reliance on traditional fossil fuels. Emphasizing Europe’s commitment to global cooperation, she stated, “Our message to the world is simple: if there is mutual benefit, we are ready to work with you.” She further highlighted the EU’s openness to economic partnerships, adding, “If you want to renew your cleantech industry, improve your digital infrastructure – Europe is open for business.” This approach reflects the EU’s ambition to lead in sustainable innovation while fostering international collaboration in the digital and clean energy sectors.

The European Commission, which is responsible for managing the trade policy of the 27-member EU, has vowed to defend its interests if Trump carries out his threats.

However, the European Commission president also stressed that the EU still has significant differences with China, saying it will be an “intense” year for “one of the most complex and important relationships in the world.”

Some critics argue that von der Leyen’s policy shift is constrained by Europe’s deep reliance on the United States for security and defense, leaving the EU with limited strategic alternatives. As one EU diplomat put it, “Europe really has no choice. If the choice is not to surrender Europe to China, the EU is trapped. The only thing they can do now is to make a short-term deal with Trump, work with other middle powers, and engage with the global South in the medium and long term.” This perspective underscores the geopolitical dilemma facing the EU as it seeks to balance transatlantic ties with an increasingly multipolar world.

“Europe’s Dilemma: Navigating Amid Shifting Global Alliances” Read More »

A new phase of the trade war: China’s response to US tariffs

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China imposed new tariffs on goods imported from the United States on February 4. This is a response to the additional 10% tariffs imposed by the United States on the same day, which will apply to all Chinese goods imported into the United States.

Trump, both during the election campaign and since his inauguration, has accused Beijing of not taking the necessary and sufficient measures to stop the growing flow of illegal drugs into the United States. Accordingly, the additional tariffs are also a kind of punitive measure against China.

China’s Ministry of Finance announced shortly after the US tariffs went into effect that it would impose an additional 15% tariff on US coal and liquefied natural gas, and a 10% tariff on crude oil, farm equipment, and small trucks, as well as large sedans imported into China from the US. The additional 10% tariff could also apply to Elon Musk’s Cybertrucks, which Tesla produces.

The tariffs will take effect on February 10, but U.S. crude oil prices fell 2% shortly after the announcement.

According to the U.S. Energy Information Administration, in the first 11 months of 2024, compared with the same period the previous year, China’s imports of U.S. crude oil fell by 52% or about 230,540 barrels of oil per day.

For the full year, U.S. crude accounted for 1.7% of China’s total imports, or about $6 billion, down from 2.5% in 2023, according to Chinese customs data.

Mia Geng, an analyst at FGE, stated that when China imposed 25% tariffs on U.S. crude during Trump’s first term in office, it stopped buying about 300,000 to 400,000 barrels of crude oil per day and used West African and Asian supplies as alternatives.

In addition, China has targeted American businesses, including Google, Calvin Klein and others. China’s Ministry of Commerce said it had already added PVH (PVH.N), a holding company that owns brands such as Tommy Hilfiger and Calvin Klein, and U.S. biotechnology firm Illumina, to a list of “unreliable entities.” The ministry said the two companies had taken discriminatory measures against Chinese enterprises and had infringed on the legitimate rights and interests of Chinese companies. China could impose fines or other sanctions on entities or companies on the list, including suspending or freezing trade and revoking work permits for foreign personnel.

Additionally, China’s State Administration for Market Regulation said Google is suspected of violating the country’s antimonopoly laws and has already launched an investigation into the company. Google’s products, such as its search engine, are blocked in China, although it works with local partners, such as advertising companies. 

Besides  China, the newly elected president of the United States has also imposed additional sanctions on Canada and Mexico. The Canadian prime minister announced a 25% retaliatory tariff on American goods on February 1, warning the American people that they would have to pay for Trump’s actions. After that, Trump temporarily suspended his decision and gave Canada and Mexico 30 days to eliminate criminal activities along the border.

China has not been given a similar opportunity, although according to Trump’s press secretary, the 47th President of the United States is planning a phone conversation with Chinese President Xi Jinping this week in order for the world’s two largest economies to reach some kind of agreement before a new trade war becomes inevitable.

A new phase of the trade war: China’s response to US tariffs Read More »

Donald Trump has imposed tariffs on China, Canada and Mexico

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The US President, Donald Trump, has started to implement previously announced reforms of economic policies and has imposed tariffs on China, as well as Canada and Mexico. He signed the decision on Saturday, February 1st.

According to the statement made by the Trump administration, tariffs aim to reduce the flow of narcotics and undocumented immigrants in the US. The president himself has published a post on social media, reading that the tariffs were necessary to “protect Americans”.

More specifically, the new regulations include a 25% rise in tariffs on Canada and Mexico and 10% on China. Regarding China, the White House statement talks about the dangers of Fentanyl – according to it, Chinese officials could not stop the flow of said drugs to criminal cartels. Additionally, they could not uproot money laundering from transnational criminal organizations.

Chinese Ministry of Foreign Affairs stated that the government of said country “firmly deplores and opposes this move [made by Donald Trump] and will take necessary countermeasures to defend its legitimate rights and interests.” Aside from this, the Ministry highlights that China started to regulate Fentanyl in 2019 and was acting in cooperation with the US to counter the negative effects of the narcotics.

Furthermore, the Chinese Ministry of Commerce also replied to the statement and announced a complaint that it is planning to file with the World Trading Organization (WTO).

As for Canada and Mexico, both countries have decided to impose tariffs on the US themselves as a countermeasure.

Donald Trump has imposed tariffs on China, Canada and Mexico Read More »

Anaklia Deepwater Port’s Elusive Investor

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The Anaklia Deepwater Port project, long touted by the Georgian Dream as a flagship endeavor, remains shrouded in ambiguity. Despite persistent assurances from the government, details regarding the selection of a private investor continue to elude the public.

On January 20, 2025, Minister of Economy and Sustainable Development Levan Davitashvili confirmed that construction work has officially commenced, with negotiations with a private investor also underway. According to Davitashvili, the project’s original Chinese-Singaporean consortium is now being expanded, with new players joining the ranks. Further information on this development is expected to be released in February. He also announced that April would mark the deadline for the consortium to submit an updated proposal.

Key milestones to note:

  • February: The public will be informed about the ongoing negotiations, including details about the new consortium members.
  • April: The Sino-Singaporean consortium aims to finalize and submit an updated proposal.

However, past promises to keep the public informed have been repeatedly postponed. Last year, Davitashvili made several commitments about the project’s progress:

  • May 29, 2024: The Chinese-Singaporean consortium was announced as the preferred bidder, with Davitashvili stating the consortium would be officially named winner within days. Nearly eight months later, negotiations remain ongoing.
  • October 8, 2024: The minister promised a public presentation of the project’s progress in the “coming days,” citing intense negotiations with the investor that would soon conclude. Four months later, this much-anticipated presentation has yet to materialize.

In addition to the ongoing investor negotiations, questions loom over the expansion of the Chinese-Singaporean consortium. As reported in our previous analysis, the two known members of the consortium—China Communications Construction Company Limited and China Harbour Investment Pte. Ltd—carry a reputation for controversy on the global stage. Given the Georgian Dream’s tendency to overlook due diligence when selecting Chinese firms for infrastructure projects, the addition of new players to the consortium raises legitimate concerns about the project’s viability and potential risks.

Minister Davitashvili’s statement was soon followed by a declaration from Georgian Dream representative Irakli Kobakhidze, who noted that the agreement with the Chinese-Singaporean consortium had entered an “intensive phase,” with consortium representatives currently in Georgia for talks. However, as Davitashvili’s earlier statement indicated, the investor selection process will likely continue until at least April 2025.

The Anaklia project has been a favorite talking point for the Georgian Dream, touted as a testament to the government’s economic success—particularly during election cycles. After the elections, the rhetoric has remained unchanged, with continued references to the port’s potential to drive economic development. Notably, the 2025 state budget allocates 150 million GEL to the project. However, the lack of concrete progress and persistent delays in selecting a private investor leave many questioning whether this project will ever come to fruition.

Why the Delays?

The official reason behind the year-long delay in finalizing a private investor remains unclear. However, several factors likely contribute to the extended timeline:

  1. Ownership Issues with Consortium Member: The controlling stake in China Communications Construction Company Limited (a member of the Sino-Singaporean consortium) is held by the state-owned China Communications Construction Group. According to the tender’s exclusion clauses, companies in which the state holds more than 30% of the shares are ineligible to participate in the selection process. This potential violation likely posed a significant obstacle during negotiations, prompting the inclusion of additional partners to ensure compliance.
  2. Financial Guarantee Concerns: HSBC Bank was initially listed as the financial guarantor for the consortium, but doubts persist regarding the bank’s involvement. If HSBC is not providing the promised financial guarantee, it would explain delays in finalizing the agreement.
  3. Political Sensitivities: The current political climate in Georgia, shaped by the Georgian Dream’s increasingly anti-Western stance, presents another challenge. Announcing a Chinese-Singaporean consortium as the private partner for the Anaklia project could provoke public backlash, potentially escalating tensions. The government may be delaying progress to avoid further public unrest.

In sum, while the promises surrounding the Anaklia Deepwater Port project continue to multiply, the reality is far less clear. With crucial negotiations dragging on and the specter of political and financial complications looming large, one has to wonder whether this much-heralded infrastructure project will ever leave the drawing board.

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Secretary of State Rubio reaffirms U.S. Commitment to the Philippines in Discussion on China’s ‘Dangerous’ Actions

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U.S. Secretary of State Marco Rubio held a discussion on Wednesday with his Philippine counterpart, focusing on China’s “dangerous and destabilizing actions in the South China Sea.” Rubio emphasized the “ironclad” U.S. defense commitment to the Philippines during their exchange.

According to a statement from the U.S. State Department, Rubio highlighted that China’s actions “undermine regional peace and stability and are inconsistent with international law” during his conversation with Philippine Foreign Minister Enrique Manalo.

Rubio assured Manalo of the U.S. ‘ steadfast obligations under the Mutual Defense Treaty and explored avenues to enhance security cooperation, strengthen economic ties, and deepen regional partnerships.

In recent years, the Philippines has encountered repeated maritime disputes with China, particularly concerning contested areas in the South China Sea that lie within Manila’s exclusive economic zone.

Rubio’s remarks followed his meeting with officials from Australia, India, and Japan as part of the Quadrilateral Security Dialogue (The Quad), a China-focused coalition. This meeting, held the day after President Donald Trump resumed office, underscored a unified commitment to addressing Beijing’s influence in the Indo-Pacific.

The Quad members and the Philippines share concerns about China’s expanding influence, with analysts noting that Tuesday’s meeting aimed to demonstrate continuity in the Indo-Pacific and reaffirm that countering Beijing would remain a key focus for Trump.

China, through its foreign ministry, has described its actions in the South China Sea as “reasonable, lawful, and beyond reproach.” Spokesperson Mao Ning asserted that the U.S. was “not a party” to the disputes and had “no right to intervene” in maritime issues involving China and the Philippines. She further stated, “Military cooperation between the U.S. and the Philippines should not undermine China’s sovereignty and maritime rights and interests in the South China Sea, nor should it be used to endorse the illegal claims of the Philippines.”

The Philippine defense department, in a separate statement, noted that the country was among the first to engage with the new U.S. administration on critical security issues. Philippine Defense Secretary Gilberto Teodoro met with U.S. National Security Adviser Mike Waltz at the White House on Thursday, reaffirming the enduring alliance between the two nations.

Shortly before Trump’s inauguration, the Philippines and the U.S. conducted their fifth round of joint maritime drills in the South China Sea since initiating such activities in 2023.

According to Reuters, under Philippine President Ferdinand Marcos Jr., security cooperation with the U.S. has significantly increased. The Marcos administration has strengthened ties with Washington, permitting the expansion of U.S. access to military bases in the Philippines, including facilities positioned near Taiwan, a democratically governed island claimed by China.

Secretary of State Rubio reaffirms U.S. Commitment to the Philippines in Discussion on China’s ‘Dangerous’ Actions Read More »

New Challenge to China: Trump’s Plan to Reclaim the Panama Canal

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The 47th President of the United States of America, Donald Trump, spoke about his foreign policy plans in his inauguration speech and promised to return the Panama Canal to the United States.

In his speech, Trump noted that the Panama Canal was built by the US in the 1900s, and was eventually given to Panama in 1977 under a treaty that guaranteed the canal’s neutrality, but that it was a “foolish gift” and should never have been made.

Trump has accused Panama of breaking conditions of the 1999 treaty, that handed the strategic waterway to Panama. In addition, according to the newly elected president of the USA, Panama has completely transferred the operation of the canal to China. “First of all, China controls the Panama Canal. We did not hand it over to China. We gave the canal to Panama, and now we are taking it back“, – said Trump.

The Panama Canal is one of the most important trade routes of the United States. About 5% of global maritime trade passes through the 51-mile-long Panama Canal. Also, thanks to the Panama Canal, about 40% of all US container ships pass through the waters of the Atlantic and Pacific oceans. Therefore, it has strategic importance for the USA.

Trump also emphasized that American ships have to pay extremely high taxes and are treated unfairly in every way, including the US Navy.

Last week, Marco Rubio, Trump’s nominee for secretary of state, told the Senate that Trump’s concerns about this issue were very legitimate because Chinese companies control both ends of the Panama Canal, and if a conflict were to arise, the Chinese could easily demand the closure of the Panama Canal and do not let the United States go through it. This is a big challenge for both economic and national defense and security. 

Hong Kong’s Hutchison Whampoa operates two ports – Balboa Port, which operates on the Pacific side, and Cristobal Port, which operates on the Atlantic side.

President of Panama Jose Raul Molino responded to Trump’s statement by completely denying the accusation. In a post published on X, Mulino also touched on historical narratives, noting that the transfer of control of the canal to Panama under the 1977 agreement was not a gift but the result of a generational struggle that culminated in 1999. He also noted: “There is not a single nation in the world that interferes with our administration.” He promised that Trump would not be able to implement his plan and that the main trade route would remain in the hands of Panama.

New Challenge to China: Trump’s Plan to Reclaim the Panama Canal Read More »

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