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FedEx sues U.S. government over 'impossible' task of policing exports to China (reuters.com)
216 points by metaphysics on June 25, 2019 | hide | past | favorite | 115 comments



I used to do customs compliance for UPS during a break I took from tech. The only way to 100% "police" international shipments is to open them, and look at what is inside every box. Even ignoring the logistics of that, that seems like a privacy concern to me.

FWIW, at UPS we were allowed to open the boxes if needed (no other UPS department had that permission), but we normally just trusted that whatever description they put on the paperwork matched the contents of the box. We'd open it if there was no paperwork. If we knew the description would stop it at customs, we'd look inside and re-write the paperwork after seeing what the contents were to speed it through customs. But I'd estimate we sent more than 95% through without opening a box.


Did they ever run any test? For example, open every box and record the accuracy?

If the accuracy is greater than 95% then I don’t see any problems with your actions.


I'm not sure what you mean by accuracy.

But no, we didn't do testing of any kind. If the packages got through customs without causing a delay that made people miss their expected delivery date, all was well. It wasn't our intent to do the job of customs, we just intended to make sure that everything was documented in ways that it would speed through. Or, to stop the package before it left its originating city and have the shipper correct it vs. having it go across the country before a problem was noticed.

It was our goal to make the shipping smooth with minimal invasion of people's packages.


Couple Questions:

If the package got held at customs, who was liable UPS or (Sender/Receiver-- DDU v DAP)

Was this compliance check a service that was paid for, or something UPS did to minimize customer issues?


It was an internal process purely to minimize customer issues. Which means that I never dealt with the consequences if something did get stopped at customs, so I don't know any details of how such things played out.


MyUS.com does the best job in that regard: they are registered as exporter and they open EVERY package and verify it. Their postal code even gets you 0% sales tax on any US webshop. Their service costs as much as regular UPS/FedEx/DHL delivery would cost you...


Five years ago there was a similar situation with the transportation of prescription medications. FedEx put out a public statement that they intended to fight the Department of Justice order:

"We want to be clear what’s at stake here: the government is suggesting that FedEx assume criminal responsibility for the legality of the contents of the millions of packages that we pick up and deliver every day. We are a transportation company – we are not law enforcement. We have no interest in violating the privacy of our customers. We continue to stand ready and willing to support and assist law enforcement. We cannot, however, do the job of law enforcement ourselves." [1]

Ultimately two years later the DOJ dropped the charges against Fedex.

"In court on Friday, [U.S. District Court Judge Charles] Breyer said FedEx was 'factually innocent.' He said the company repeatedly asked the U.S. Drug Enforcement Administration to give it the name of a customer that was shipping illegal drugs so it could stop working with the person, but the agency was either unwilling or unable to do so." [2]

If this plays out similarly, FedEx will use a similar blacklist mechanism to comply with the law, but is suing right now to prevent any backlash that will inevitably occur when the blacklist doesn't contain an illegal entity and it's discovered there was a shipment that slipped through the cracks.

"Export restriction rules “essentially deputize FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally,” it said in a filing. ... FedEx responded by saying publicly that it would deliver all products made by Huawei to addresses other than those of Huawei and affiliates placed on the U.S. national security blacklist." (from the main article in this thread)

[1] - https://about.van.fedex.com/newsroom/fedex-response-to-depar... [2] - https://www.npr.org/sections/thetwo-way/2016/06/17/482537913...


Does the govt provide mailing addresses? Is there a law on the book that puts burden on shipping companies to block sender and receiver based on the provided addresses?

If not then I’m with fedex on this one.



Thanks for posting that.

I find it odd that the URLs returned by the (test?) API[0] are bit.ly shortened. I'm generally not a fan of URL shorteners because I can't easily see where I'm headed, but it also seems that the government should have their own shortener URL if they're going to do that.

[0] https://www.export.gov/consolidated_screening_list#/


It's strange especially, that the bit.ly allows you to check statistics without any form of restriction:

https://bitly.com/1I7ipyR+


bit.ly, the service that is nominally in Libya, which is, in turn, subject to various sanctions?

This is hilarious.


They do in fact have their own shortener (https://go.usa.gov/)... but after abuse, they changed it to require a login so I'm guessing there was an issue hardcoding someone's login to let the API generate them?


How does the USPS deal withe it?

They have the same problem and if they have a solution like an address list they should be sharing it with FedEx etc.


Doesn’t FedEx own the USPS or vice versa?


Isn't USPS part of the US government?


It is. I think what the parent poster is alluding to is,

> FedEx provides air transport service to USPS for Priority and Express Mail. Priority Mail and Express Mail are transported from Priority Mail processing centers to the closest FedEx-served airport, where they are handed off to FedEx. FedEx then flies them to the destination airport and hands them back to USPS for transport to the local post office and delivery.

(https://en.wikipedia.org/wiki/United_States_Postal_Service)

I don't see the relevance, and the GP is right; USPS could share whatever means they're using, it would seem. I'm also curious to know (and did not see in the article) if FedEx is actually liable, or why it is a good idea to have the shipping company, and not the shipping party, be liable?


Officially, the USPS was privatized in the 1970s, except they still need Congressional approval to raise postage rates, close offices, change business hours, or do just about anything you would expect a private company to be able to do. And I don’t believe it’s possible to buy USPS stock.

Also, they continue to have their own police force, the private mails act to protect their monopoly in handling letters, a federal requirement to provide service to every address in the country no matter how inconvenient, and laws that make tampering with the mail a federal offense. I think the big difference is that the Postmaster General is no longer a Cabinet member. But the post office makes a big deal about the fact that they’re legally a private corporation.


USPS was never privatized. It was reorganized as an independent agency.

> The USPS is often mistaken for a government-owned corporation (e.g., Amtrak) because it operates much like a business. It is, however, an "establishment of the executive branch of the Government of the United States", (39 U.S.C. § 201) as it is controlled by presidential appointees and the postmaster general. As a government agency, it has many special privileges, including sovereign immunity, eminent domain powers, powers to negotiate postal treaties with foreign nations, and an exclusive legal right to deliver first-class and third-class mail. Indeed, in 2004, the U.S. Supreme Court ruled in a unanimous decision that the USPS was not a government-owned corporation, and therefore could not be sued under the Sherman Antitrust Act.


Thank you, it looks like I misunderstood the definition of “independent establishment of the executive branch” ( https://about.usps.com/publications/pub100/pub100_036.htm ). I can’t find it now, but in the ‘90s, the post office had a brochure about how wonderful it was that it wasn’t actually a government agency, but apparently now they’re more worried about becoming truly privatized and are playing up their government connections.


Also they are exempt from state and local property tax and can reinvest their federal taxes... so their claim that they aren't paid for by taxes is kind of disingenuous because they also don't pay them, which is essentially a huge payout to them from the government.

I don't mind having the post office, because the government and the courts need a way to reliably deliver mail to anyone and have it certified and all that, but there's no excuse for them to have a monopoly.


All federal government agencies are exempt from state and local taxes, there's nothing particularly special about the USPS in that regard. In fact, state laws don't really apply to them (e.g., postal vehicles don't have state license plates).

This idea of a "huge payout to them from the government" doesn't make any sense. Who exactly is receiving this payout? There are no stockholders who would receive dividends from the profits, if there were any, which there aren't. [0]. There is no stock price going up, because there is no stock.

[0] https://about.usps.com/news/national-releases/2018/pr18_093.... (net loss of $3.9 billion for FY 2018)


customs should be dealing with this, not fedex


Each year, more than 11 million maritime containers arrive at our seaports. At land borders, another 11 million arrive by truck and 2.7 million by rail. Tens of thousands of packages arrive every day by air.

Carriers, to clear stuff through customs, have to have appropriate documents that have the shipper/importer of record/adequate description of the goods/country of origin. This then gets, by the vast majority of brokers anyway, transmitted electronically to Customs and the vast majority of packages are never inspected.


wow! so if my understanding is correct: customs can still check if it is shipped by huawei


Customs will know if Huawei is the shipper or importer of record, if it was on the docs. However "John Smith" could walk down to FedEx/UPS/DHL and go "I have this box of phones I'd like to ship, as John Smith" and hand a box full of Huawei phones across the desk.

The origin station goes "ok" and the provided documents get scanned in (commercial invoice, waybill). The packages goes along its way. If it is headed to the United States those documents then get transmitted to an office somewhere and someone reviews them and files entry on the shipment with the port it is expected to land in.

Say it's John Smith to Not Huawei Inc and it's 12 phones.

So Customs would get that it's John Smith and such and such street, shipping to Not Huawei Inc at such and such street. They'd then get the tariff number of 8517120050 for cellphones, that the quantity is 12, the country of origin on the docs and the value of the shipment.

What Customs won't see, unless they decide to manually review the commercial invoice themselves, is that the phones were manufactured by Huawei. What Customs and the carrier doen't realize is that "John Smith" is actually "Huawei Employee at Huawei, shipping for Huawei from Huawei to Huawei" because the commercial invoice says John smith to Not Huawei Inc which happens to be a DBA for Huawei (although Customs could catch this via the EIN).

A lot of customs clearance is "If it's written on the commercial invoice, it must be true" unless Customs flags something for manual inspection and decides to question it themselves. And the volume of packages entering the United States is such that it is just impossible to go over even 20% of shipments with a fine-toothed comb. You'd need to drastically increase the number of ports, the size of the ports, probably increase the number of CBP employees doing the job an order of magnitude and you'd still end up slowing down how fast freight is getting moved.

We live in a world where stuff gets on a plane in China and 12 hours later is clearing Customs and getting on a truck to head to it's final sort facility or onto a truck to be delivered to the importer. If you wanted to manually inspect every shipment you'd need an insane amount of warehouse space and something might get released a week or two after landing at the port of entry.


I work with a company that imports and exports physical products to the U.S. regularly.

Yes, you could probably get away shipping a dozen phones a few times. But they will catch it eventually. They do actually inspect paperwork and sometimes contents.

And if they find out you've lied on the paperwork, you've earned yourself a shit list that's going to extend to any travel you do to/from the U.S. for life, on top of penalties and possibly arrest warrants.

They don't mess around.

I should add: CBP shares offices at the border with the couriers. They're literally down the hall from each other. They're inspecting packages crossing the border all day long, but it's a random sampling, so whether it's your day or not is a matter of luck. They also have mobile x Ray trucks that scan full semi trailers.


> you've earned yourself a shit list

Does this extend up and down the tree? The issue is not so much that John Smith needs to get randomly selected at every airport he goes to for the rest of his life.

The issue is that the business he worked for also hired Jane Doe who is doing the same thing - they'd need to trace the responsibility up to his employer/contracting company and back down to their other employees and contractors.

Businesses seem surprisingly good at providing scapegoats and deniability in situations like this, especially compared to our government's tendency to blame the individual.


As far as I'm aware, this applies to the person filing the documents. If a person does this on behalf of a company without referencing the company, he's personally liable. If the company is listed on the paperwork, they'd be flagged.

There's a big difference between sending something personally at the post office, and registering as an exporter/importer. If you're registered, you use your broker account number.

Can the company have thousands of employees attempt to send packages personally? Sure. But if discovered, the company would itself be shitlisted, with probably no way to undo it. The executives and any company that helped facilitate the fraud would be investigated.

I can't speak to whether the CBP maintains employment data or affiliations, but my guess would be yes. I'm sure they have back-office integrations with the NSA.

Misrepresenting information is lying under oath to a government agent. Even honest to God mistakes will get you fined, and flag you for closer inspection in the future.

As a non US citizen, the CBP is scary. I've been to exporter training sessions put on by them jointly with brokers and lawyers. I can't stress how seriously they take this, and how far their influence reaches. Even as a US citizen, I'd find them scary.


it wouldn't be hard to create another company to do this either.


Yes, it would. The application process is a bitch, and fairly invasive. This isn't something you can churn and burn.


If they wanted a legal entity with legal protection and create a brand new company sure.

You can go buy shelf companies (companies that have been previously created and are presently unused) online all day long and effectively take instant delivery however.

And if they just wanted to be blackhat about it, you can go to the IRS website and generate an EIN (tax ID for companies) in a few clicks without showing any identification or documentation and then you just need a place to receive packages or have the packages held for pickup at the carrier.

You can also just go hire random people to accept delivery or pickup your packages. Those dealing in AAS (steroids), recreational drugs, carded merchandise etc do this regularly.

Crime exists because, more often than not, it's painfully easy.


Shelf companies is an interesting approach I hadn't considered.

I wouldn't call anything you described easy, but I'm not a nation state trying to illegal smuggle banned goods. I disagree that you can churn and burn these, but you've made a good point.


>They do actually inspect paperwork and sometimes contents.

I'm well aware, this has been my livelihood for 13 years. That doesn't change the fact that Customs inspects a fraction of shipments and that for a considerable chunk of shipments a human being is never even involved on Customs end, just a computer.

> They also have mobile x Ray trucks that scan full semi trailers.

Mobile x-ray doesn't magically reveal the manufacturer of a given product though, or tap into the akashic record and verify the given country of origin, it goes "yup, there doesn't appear to be missiles, people or hidden compartments in that container".

>And if they find out you've lied on the paperwork, you've earned yourself a shit list that's going to extend to any travel you do to/from the U.S. for life, on top of penalties and possibly arrest warrants.

Do you really think random people in China are concerned about this? Also the paperwork used for Customs clearance, the vast majority of the time, is supplied by the shipper and the importer of record is only contacted if something is missing or clarification is needed by the broker.

Have you ever ordered something form eBay or AliExpress that shipped from China? The Customs declarations NEVER have accurate information on them, they consistently flat out lie about the contents, value, will often indicate gift or not sold, they'll even lie about the country of origin frequently. While these items are often usually a few bucks and are often sectionable anyway, you can bet this happens are formal shipments too without carriers and/or brokers knowing and Customs probably only catches this a small fraction of the time.

Until we get AGI and much better imaging equipment OR Customs increases the number of people doing inspection at least one order of magnitude, this will remain true. The volume is simply too high to catch even half of the funny business/lies/contraband.

This is also one of the countless reasons I lose sleep at night, we are far far far far far too dependent on be able to order this piece from that country, that piece from this country, those widgets from 2 other countries, and having everything show up at our home/place of business 1-3 days later to replace something that broke. All it takes is a natural disaster, a war, a trade war, and BAM.

This trade war with China for example had companies like Regal Beloit scrambling to move their manufacturing to Mexico, then it was announced we'd be starting a trade war with Mexico and these companies began to panic even more, fortunately that one seems to have been resolved.


isn't this something for border controls / customs rather than shipping companies??


The problem that I see with this approach is that we are privatising profits while socializing costs.

Customs should be dealing with it is akin to say that taxpayers should deal with the cost of FedEx businesses whenever they use it or not.

I see the point of sharing health care or education expenses thru society. But, your new iPhone cost should be on you.

Customs should still do random checks and things like that to assure that all companies follow the law, thou.

But, it is not a strong opinion. I see the value of having customs doing it. I just get inclined for FedEx taking in the cost.


> The problem that I see with this approach is that we are privatising profits while socializing costs.

The costs in question are the costs of achieving a government goal. It’s not like FedEx expects the government to pay its shipping bill. But when a government mandate costs FedEx money, it wants to be compensated for complying.


> it wants to be compensated for complying.

This will not scale. Next, industries will want to be compensated to add filters to not pollute rivers. Car makers will want to be compensated for doing safe cars. Supermarkets will want to be compensated for having to check customers age before selling alcohol or tobacco. Etc.

To follow the law is part of doing business. If the law is unreasonable or it is a problem with the law or it is a problem with the business model.


You're glossing right over what's happening here. Customs is expecting FedEx to _enforce_ law. Not comply with it, enforce it. Preventing a package from crossing the border on a legality basis is not the responsibility of any private entity in the United States. We have official agencies who act in that capacity and have authority to do so.

So, no, it is nothing like putting seatbelts in cars or not polluting rivers. Equivalent would be forcing car makers to ensure customers wear their seatbelts or companies keep rivers at a certain level of pollution (regardless of their complicity in its pollution).


And when a government policy makes FedEx money, FedEx is eager to return that to the government.


Let's be clear that this is a "government" goal, and that isn't necessarily a goal of the people whom the government serves. The government doesn't have it's own money to serve it's own goals, so I'd appreciate it if it stopped using my money to ignore my goals for society, so that it can pursue it's own. See also: having to donate basic school supplies to the public school, but the state patrol has state-of-the-art weaponry and technology headquartered in my town that hasn't had a murder in 20 years.


>The problem that I see with this approach is that we are privatizing profits while socializing costs.

This is becoming more and more the go-to complaint even when it's obviously not a fit. Dare I call it virtue signaling. The fact of the matter it that policing physical i/o of commerce is customs job and has been for the entire history of the US and beyond. Custom's continued existence is part of why we, and FedEx pay taxes. They don't get to just offload their job with the stroke of a pen.


hmm...next up FB, Youtube and Twitter suing the Feds to pay their content monitoring bills.

Just have to plant the seed in Zuckerberg's head and am sure it will take root.


In theory, but in practice customs would achieve that by making demands of delivery companies. Like how ISP domain blocking works in the UK - in theory the government should be enforcing the ban on visiting certain domains (eg thepiratebay) but that's impractical and so ISPs are tasked with doing it.

You'd basically have to crank up a customs operation about the size of Fedex to handle all their parcels, whilst the alternative is "lean on the company" (or force it through primary legislation).


You don't need to check every package or stop every speeder. This isn't 1984. You just need enough targeted enforcement to keep society happy with the level of compliance. The laws were not written with the expectation of 100% enforcement (or anything close to that).


Export Control is a shared responsibility model between the government and exporters.

The enforcement is for CBP, but in order for shipping companies to effectively perform their job (safely and securely ship packages in a timely manner), they assume some of the responsibility placed on the exporter.

Total abdication of responsibility could result in CBP placing increased delays on FedEx packages as it ensures export control compliance.

As noted in another post, the federal government does not mess around with regards to export control laws.


yes, it looks like fedex packages do not get checked by customs :-O


reminds me of the entirely fraudulent way mainland Chinese merchants send packages to USA labeled "gift" ... or often they are charged zero for shipping ... its the Chinese government subsidized way to support their own export based economy ... whereas the USA is shooting itself in the head with this export decision


I wonder if hospitals will also start to sue over the EO to provide costs up front? On one hand this seems super helpful, but on the other hand, it seems pretty impossible with our healthcare system.


Two related recent reads regarding how we came to be with regards to China.

First it was Nixon and Kissinger:

"Nixon argued, “containment without isolation” was necessary but not sufficient. “Along with it, we need a positive policy of pressure and persuasion, of dynamic detoxification … to draw off the poison from the Thoughts of Mao ... [although] Nixon said, years later, that his policies might have “created a Frankenstein” — and the family of nations he hoped would domesticate China finally has begun to take notice of the monster that has arisen in its midst."

https://thehill.com/opinion/international/449695-red-china-r...

Then it was the American companies:

"Well before Donald Trump was elected, the carping about Beijing's policies from the Fortune 500 crowd intensified. In the annual reports issued by the American Chambers in both Beijing and Shanghai, the number of respondents who felt the regulatory environment in China was worsening steadily increased. A senior executive at Honeywell in 2015 told me flatly that his company was fed up with Beijing's demands for technology transfer. Friends at CISCO and MIcrosoft said the same. Privately, the complaints about companies like Huawei stealing intellectual property also ratcheted up."

"After having spent so much time and money building out their supply chains, there aren't too many CEOS who want to spend more time and money rebuilding them somewhere else," says former USTR Froman, now a senior executive at Mastercard. And with a Presidential election now less than a year and a half away, the possibility that a Trump successor may not be a "tariff man" (or woman) also means companies are unlikely to tear up their supply lines, at least for now.

https://www.newsweek.com/how-americas-biggest-companies-made...


More of a political move than a legal one, saying please don't ban us... But this trade war is a bifurcation of the world that was going to happen sooner or later. US is trying to tilt the table on its side. It's a bold move Cotton, let's see if it pays off.


>But this trade war is a bifurcation of the world that was going to happen sooner or later.

why is it inevitable? What do trade wars get us?

As I understand it, trade wars decrease the GDP of the world, decrease the total output and productivity of markets on both sides. I mean, certainly, it's better than a war war, but it's something that has great costs for both sides, and few (no?) Benefits for either.


Just like wars, in trade wars one side gets hit worse than the other, which is kinda the point I guess.

Also, just like trade wars, wars come at great costs to both sides, but they still happen.


>Just like wars, in trade wars one side gets hit worse than the other, which is kinda the point I guess.

but if both sides are worse off at the end than at the beginning... why do it? Are people really willing to immiserate themselves if they know the other guy is even worse off?

I always thought of wars as conflicts over resources where one side, at least, though they could gain more by fighting than what the fight would cost them. But some wars, I have a hard time putting some wars into that framework without going way out into conspiracy land, and even then, what possible profit, say, could the US have gotten out of Vietnam, or the USSR out of Afghanistan that would justify the cost of those wars? was it just an error in judgement about how much such a war would cost?


Sticking to trade wars, let's say country A is the current leader and country B is catching up. A might start a trade war knowing that it will be worse off right now, but B will lose more, and A will remain the leader. The competition from a stronger B could be even more costly to A than the trade war.

And also, yes, some consider relative wealth more important than absolute wealth; "I'd rather have $100 and my neighbor $10, than I have $150 and my neighbor $140."


>And also, yes, some consider relative wealth more important than absolute wealth; "I'd rather have $100 and my neighbor $10, than I have $150 and my neighbor $140."

I actually think that's a bad example, 'cause if I have 10x what my neighbor has, I can easily convert some of that wealth differential into real wealth for me in ways I couldn't if we were more equal. "Hey neighbor, would you like to mow my lawn for some money?" so in a real way, the neighbor example is more about how much you want local labor vs mass manufactured goods.


IMO it's misleading to think of the "sides" in these things as giant monoliths. If I had to simplify I'd say in wars, civilians and soldiers on any side lose, people selling arms win, people winning elections based on fearmongering win, and so on. I wouldn't divide the "sides" by countries, but by activity.

> So fine, let's just drop all the discussion, we save a lot of trees, we can throw out the newspapers and most of the scholarly literature, and just come out, state it straight, and tell the truth: we'll do whatever we want because we think we're gonna gain by it. And incidently, it's not American citizens who'll gain. They don't gain by this. It's narrow sectors of domestic power that the administration is serving with quite unusual dedication.

-- Noam Chomsky, Talk titled "Why Iraq?" at Harvard University, November 4, 2002


A lot of wars lately have been proxy wars from the Cold War (or the fallout from that, particularly in the Middle East): https://en.wikipedia.org/wiki/List_of_proxy_wars

Oversimplified has a great couple of Youtube videos that explain it all (this was where Vietnam finally made some kind of sense to me) in an accessible and entertaining way: https://www.youtube.com/watch?v=I79TpDe3t2g


> but if both sides are worse off at the end than at the beginning... why do it?

Some fun philosophical questions...

Do you actually know that both sides are worse off at the end?

How do you personally believe this should be measured? How confident are you that that measurement approach is correct? What is the definition of "correct" in this context?

Do you conduct your measurements at two discrete snapshots in time: before and after? Are consequences 5, 10, 50 years down the road irrelevant, both in theory and in fact?

If you are measuring GDP, do you think looking at the aggregate national level is satisfactory? Might there be some unintended consequences lurking in the shadows waiting to bite you in the ass if you ignore regional GDP?

Do the very real (democratic) consequences of people's opinions matter in your measurement, or are you content with measurements limited to the the theoretical world, where people behave as they "should"?

It's interesting how easily technical people can see the complexity in their software models, but seemingly remain blind to the complexities of planet earth and human nature.


I think if you are going to seriously argue that the US net benefited from the Vietnam war... or that Vietnam itself would not have been better off if it wasn't attacked by the US, I just don't know what to say.


Vietnam wasn't attacked by the US, at a minimum because Vietnam wasn't one country at the time of the war, leaving aside the question of which of the Vietnams (along with the corresponding superpower puppetmaster and allies) was the aggressor.


> why is it inevitable? What do trade wars get us?

Could have asked what do wars get us in the 1930s - and the answer would be: with the United Kingdom? Not much ... With Nazi Germany? Quite a bit ...

Not saying china is Nazi Germany but if you ask the question in the abstract without context then it will never really have a consistent answer.

My personal view is that the Chinese regime must fall. I would be in favour of dropping most immigration restrictions for any chinese citizens. If you cannot topple the regime you can remove it's people.


Most of the world, I think, went to war against the axis powers because they were attacked by axis powers, so the question is "what did Germany and Japan think they could get out of starting this war?" and the best answer I can come up with is Norman Ohler's book on it;

I mean, I can see why the allied countries decided they needed to throw all they had into the fight... I just don't see how Germany could have actually done the math sober and thought they could win a war against... almost the rest of the world.


From what I read, China started the 'free trade' war according to USA. Free trade as in, they weren't meant to impose restrictions on entering their economy and subsidise everything going out. They're still happy to trade with USA but USA wants mutual free trade, not one way.


This is true but it is also rewriting the past.

The WTO was designed to encourage free trade. The problem with free trade is that countries with developed industries will crash those that don't have developed industries. Basically, there is little incentive to join if you are still developing since it will kill your local industry.

What the WTO did is a compromise. Countries that are developing get special exceptions that expire once the country reaches certain milestones. The US was one of the founding members that helped to write these rules and the rules were designed to largely help US companies.

The exceptions allow developing countries to put rules in place to help local industry. From what I can tell China looks like it will move from a "developing" country into a "developed" country sometime in the next 5 to 10 years (based on rules that the US made when it helped setup the WTO) but now it thinks that it should happen sooner.

If they started the trade war by following rules that the US helped to write then ... I don't know what I think about that ...

https://www.wto.org/english/tratop_e/devel_e/devel_e.htm


Yeah, the current US administration claims that China started a "trade war" but they're also making similar claims intermittently about other trade partners like Mexico. It's nonsense, and the lack of economic understanding behind the claims that led to them kicking off a trade war is evident in how poorly the war is turning out for american businesses


> ....the lack of economic understanding behind the claims that led to them kicking off a trade war is evident in how poorly the war is turning out for american businesses

Based on the impact of the trade war on American businesses, you are able to deduce the quality of understanding of economics of those behind the policies?


"USA wants free trade", and that's why they are creating obstacles for Huawei without even a court decision.


I understand the mercantilist view, I just don't think it's credible.


I agree that it's political since they seem to want something that is already the case.

Not sure, though that a "bifurcation" has to happen. We live in fact in a strange situation. The world in under a "Pax Americana" where the US are at the top and effectively rule. This is not a tenable situation especially with large countries several times the US' population.

The way forward a "multipolar world" and the role of the US is to let that happen peacefully and to play a constructive part. I am not convinced that this is their current agenda.


There are not a lot of historical examples of a multipolar world that was stable and peaceful. There are competing theories, but there's a valid case to be made that if many nations believe they have a shot at being #1, they will inevitably go to war to find out.

Whereas the current unipolar system, despite its flaws, is correlated with the largest expansion of peace and prosperity in history.

I think a lot of what we are seeing in geopolitics today comes down to world leaders realizing that there could be another pole in this system if things keep going the direction they are going. And that second pole would be an authoritarian nation which is one of the greatest human rights violators on earth, has a million people in detention for practicing moderate Islam, claims sovereignty over Tibet, Taiwan and Hong Kong despite vigorous protest from all the aforementioned, and who shelters a neighboring hermit state that's always threatening to nuke the other pole.

Predictably you have dictators like the ones in Cambodia, Russia and Thailand who are enthusiastic about the idea. Increasingly you have resistance to it in the West and in allied stable democracies like Japan and India.


> Whereas the current unipolar system, despite its flaws, is correlated with the largest expansion of peace and prosperity in history

Problem being US is discarding its previous status, maybe because it is pretty expensive to sustain.

The longest/largest expansion of peace and prosperity sounds great, but the major enabler and beneficiary of such expansion is ironically, China.

I would not frame the current ongoing unsettlement of established order around the world as the war of good and evil, democracy versus totalitarianism. It could simply due to the fact of the west's diminishing lead in terms of technology and economy. On paper, we are still innovating faster than ever, however as more players on the playground, the exclusive period of ripping monetary reward from innovations is shortening, no matter it is through theft or reverse-engineering or just competitor learning faster, even open source. Knowledge is spreading faster than ever.

Such trend doesn't start with China, it started with Japan, then to SK/Taiwan, finally it had reached China. Had China reached Japan's status domination of technology like it was in the 80s and 90s, with its huge domestic market, it will wield unthinkable influence over the global economy, and it will lead to empower its military ambitions.

So where does this all lead. It is hard to predict really. With a loss of vision and confidence, this world would be much more unpredictable thus dangerous, but probably something could be done to prevent a Cold War 2.0, until the equilibrium is reached.


I'm not pro-China in any case, i really believe in liberalism, but i think in history, and with the exception of Tibet (That's not really an exception tbh if you get back in the historical context), China was never known for waging exterior wars. Internal wars however...


Tibet was not recognized (by China or any other country) as an independent country.

It was de facto independent because of the collapse of the Chinese central government during the 1911 revolution. But most of China was under the control of local warlords at that time. Both the Republic of China and the People's Republic of China viewed Tibet as just one of many provinces that were temporarily beyond the central government's control.


The issue here is that this is like physics: You may not like it but you cannot beat it.

In my view it is simply 'physically' impossible for the world to remain unipolar under American so-called leadership.

It worked for a time because the only other developed pole was Europe (and Japan), which is not united with each and every country much smaller than the US.

But as the rest of the world develops then we fall back to a situation similar to the rise of the US in Victorian times: Whatever the British thought, it was 'physically' impossible for them to remain at the top.

This is not only because of China. India, the EU, maybe an African block longer term.

In today's world, war between 'superpowers' to find out who's #1 is also simply not possible because the cost would be astronomical and the result inevitably that everyone would revert to the stone age in a nuclear wasteland.

In 100 years this will all stabilise with the US being may in 3rd place, maybe just in the top 5. No direct war, but maybe a few proxy wars in the meantime.


Does "expansion of peace" include peace in Kosovo, Lybia, Syria, Iraq and other countries? The list of military operations by US [1] is nowhere near empty. That "authoritarian nation" didn't do anything close to it.

[1] https://en.wikipedia.org/wiki/Timeline_of_United_States_mili...


The US could give up their priviledged position in the anglosphere and give all of us who are currently just along for the ride (i.e. weaker weatern nations) a real shot at the democracy they so fervently sprout. I forsee more colsolidation along the lines of the EU where western powers officially come together to maintain their top status, but as a whole rather than individual nations. A situatiom which comes with its own benefits & issues...


Not to be _too_ reductionist, but isn't this exactly the situation that led to the, "valid case to be made that if many nations believe they have a shot at being #1, they will inevitably go to war to find out."

In the op?


> if many nations believe //

Isn't it "if many powerful people believe that they can use the population under their control to satisfy their megalomania"?

WWI should probably have been resolved by not stopping the murder at Archduke Ferdinand but continuing on to any Royal/controlling person who thought going to war was a good idea.

Do nations of people actually care if they're "#1"? People on the whole want local things AFAICT, sufficient freedoms to raise their family and achieve a degree of fulfillment in their lives.


Ferdinand was the guy who kept convincing the emperor to stay out of war.

Violence has a strong tendency to seem more like a good idea than it actually is.


My understanding is that mutual defence pacts meant that in theory various countries "had" to go to war to defend Austria-Hungary after the assassination (and similarly to oppose them).

It was pretty tongue-in-cheek, but I was saying from that point the Royals involved could have solved things without having a World war.

Edward and Wilhelm could probably just have been spanked by their nannies and sent to bed without any supper.

I'm not well versed on it but WWI always seems to me like a duel in which the factions chose 'millions of other lives' instead of swords or pistols.


It wasn't my argument originally, but I'd argue two things.

1) The divide between nation/leader is not a valuable one to make in-so-far as whether it was originally their idea or not, the nations were the ones doing the warring. I think it's dangerous to think of history as caused by individuals (despite the tendency of the textbooks to tend that way). Could the world have been different if Hitler was a better person? Sure. It also could have been different if the people were better too...

2) I can think of many counterexamples to people wanting local things. You might argue that there is a way to fit things like America's current trade war with China into the deep South's degree of fulfillment, but I'm not really interested in going down that hole. I'd rather just say that, as stated, I don't think it's a predictive model of the world.


>Could the world have been different if Hitler was a better person? Sure. It also could have been different if the people were better too...

If Hitler was a better person, he probably wouldn't have gotten into the position he did, and we'd all be invoking some other German's name as the ultimate bad-guy. However, it's also possible that the NSDAP would have picked some other fool as their leader, and that person would have been less competent, and they would have been much less successful in their war campaign, or perhaps not even have gained the power they did.

But the ultimate reason Germany took the path they did is because of the way WWI turned out for them, and the horribly punitive measures they were forced to agree to by the English and French. The world would be very different now if the English and French hadn't been such assholes.


> Whereas the current unipolar system, despite its flaws, is correlated with the largest expansion of peace and prosperity in history.

The post-WWII expansion occurred largely under a bipolar world. Calling this the "greatest expansion of peace and prosperity in history" is very questionable, though.

> has a million people in detention for practicing moderate Islam

I'm not going to claim to be an expert on what's going on in Xinjiang, but then again, 99% of the people who give their opinions on it aren't. This isn't an issue of "moderate Islam." China has a pretty significant Hui Muslim population (much larger than the Uighur population), which does not face the same issues. The issue in Xinjiang has to do with "East Turkestan" separatism, not Islam per se. The Chinese government really does not like separatism.

> claims sovereignty over Tibet, Taiwan and Hong Kong despite vigorous protest from all the aforementioned

Those territories are all internationally recognized as being part of China. Hong Kong was handed back to China by the UK as the result of a treaty. Tibet was never internationally recognized as an independent state. Taiwan is the most complicated issue. Most countries, including the United States, recognize only "one China," which is the PRC. The RoC (Taiwan) also officially recognizes only "one China," which it claims to represent. Funnily enough, Taiwan's territorial claims are even more expansive than those of the PRC, since Taiwan still officially considers Mongolia to be part of China. All those islands in the South China Sea? Taiwan also claims them (and it occupies more of them than the PRC does).


> Export restriction rules “essentially deputize FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally,” it said in a filing.

Then don't export? Leave it to another company willing to take that risk and inconvenience, and price international shipping in accordance with that risk and inconvenience.


Why should the burden of these restrictions and policing falls upon a private company? If the government decides to apply additional restrictions under the pretense of national security, then it should foot the bill.


The government doesn't pay any bills whatsoever! The taxpayer does.

In this case, should all taxpayers foot the bill, or should only exporters?


All taxpayers. We're the ones indirectly responsible for the government that imposes the unreasonably trade-disrupting regulations, and it's in everyone's interest that we be able to export smoothly (not just that of the exporters themselves).


All taxpayers should. They chose the government, and they're responsible for it. If you don't like footing the bill for a crappy policy, then do a better job voting.


All taxpayers should, because the entire US economy would collapse without cost-effective export shipping. Also, the issue is less of who pays and more of the strict liability. I don't think FedEx would mind implementing commercially reasonable measure to check high-risk packages--like customs does--but the issue is that they are now in the business of interpreting the law, and if the government disagrees they get in trouble.


It's impossible for a carrier to check every package, nor is it legal in many cases. CBP can't check every vehicle at every point of entry, no one can.

You can make whatever regulations you want, but some impossible things are impossible.


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FedEx ships 15M packages in a regular business day, they can't open every box to check the contents. Global trade would shut down if that was a rule


They could in fact actually open every box to check the contents. 15 million is not some unfathomably large number of boxes per day. It would increase the cost of shipping across the borders that require that additional checking, by whatever amount is necessary to hire and organize staff to do that checking. That increase in cost could be shifted to the senders, and in turn the volume of packages would decrease. Trade would not "shut down," but it would decrease.


That's just from one carrier. I'm amazed someone is arguing that this is a practical task instead of asking if these tariffs are really worthwhile or if there are better ways to do this than mass privacy violations and checking every piece of mail sent in the United States


I don't personally think it's worth it, no. To me, though, that's a different issue than "it can't be done."

"Yes, we can do A. The likely result of this action, however, is X Y Z." I prefer to present the situation like this rather than short-circuiting via "I know we are unwilling to accept X Y Z," and so therefore, "we can't do A."


Seems unnecessarily pedantic.


so the word you meant to use is ... impractical.


you don't get points for being a pedant.


it's not pedantic. there is a very wide chasm between impractical, which can quickly become practical given an appropriate change of conditions -- see: the entire history of computer development, and impossible.


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You know, just stop functioning in the world economy. Geez, what's so hard about that.


You're being snarky, but you are totally correct. The US could certainly just shut down all exports, and pretty quickly all trade would cease, and the economy would totally implode. It's completely doable, if that's what we want to do to ourselves. Lately, we Americans seem to really like shooting ourselves in the foot, so this would just be more of that, except with a bigger gun.


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It isn't. It's completely ineffective and a waste of resources.

Even given a highly inefficient but effective way of preventing goods from being shipped directly from the US to China, what's stopping anyone from shipping them from the US to Vietnam or Thailand and then from there to China? Or the same for corporations rather than countries?

There is no point in doing something that costs you more resources to attempt to implement than it costs the opposition to successfully evade.


Without having read the briefs, I fall pretty strongly against FedEx on this one. If you can't run your business while complying with the law that doesn't mean you get to break the law. Rather it means that you get to shut down the business.

If a law is stupid (but otherwise constitutional) that doesn't mean you get to ignore it without being liable for the consequences (fines, jail). If you want to protest it without going to jail you can do so legally by telling people it's a stupid law - while complying with it.


> you want to protest it without going to jail you can do so legally by telling people it's a stupid law - while complying with it.

Isn't this what Fedex is doing? Complying with a stupid law but challenging its legality in a court. Not sure where you get the idea that Fedex is breaking the law.


No. According to the article they are claiming that the law (stupid or not) doesn't apply because it would make it hard for them to do business. In other words they are arguing that since they can't comply with the law and keep doing business they should be allowed to violate it. That's different from claiming the law applies but is stupid.


No. Fedex is not saying it can violate the law; it's saying as a private company it should not bear the responsibility to interpret or enforce the law. The ban was originally designed to target a small groups of well identified 'bad guys', such as terrorists and human traffickers. Now Trump administration used it to cover a large number of Chinese companies, most of which may be against US national interest but do not conduct any criminal activities. So the hastily imposed ban made it unclear what is covered and what is not. It's not hard to imagine how confused Fedex is: is it legal to send a Huawei phone? Is it legal to send a document to a lawyer hired by Huawei? What about a personal order by someone works at Huawei?

I don't want to make a moral judgement whether Fedex should win the case, but bringing the case to a court has great legal merits. It can force the administration to clarify the ban, and help many other companies which are as confused as Fedex.


yes, surely packages should go through customs before entering a country? these checks should be performed by govt. not private companies


>surely packages should go through customs before entering a country?

They do. I don't think you realize just how many packages enter the United States on a daily basis though and that Customs only physically inspects a very tiny portion of those packages.

Each year, more than 11 million maritime containers arrive at our seaports. At land borders, another 11 million arrive by truck and 2.7 million by rail. Each of those containers could contain 1 shipment between 1 shipper and 1 importer of record or it could contain dozens or hundreds of individual shipments from multiple shippers to multiple importers of record.

Then you see tens of thousands of packages enter the United States daily via air.

The United States has 328 ports of entry in the country and 13 pre-clearance offices in other countries. In 2018 the United States imported $3.1 trillion and exported $2.5 trillion in goods and services.


How is it going throw customs if you are sending US => China are you expecting China's customs to enforce US ban on Huawei ?


UK experience here....Customs can also check exports before they leave a country. Certainly that was my experience when we used to ship kit from the UK to South America (by way of FedEx).

We'd crate up the equipment then nail down the lid. Then a guy from customs would come out and pull the lid off and rummage around inside checking for contraband and to make sure we weren't shipping things that were on the tech exports naughty list.


OK Country other than US to China via FedEx


This is a form of protest.


I guess it's too radical but shutting down a business voluntarily if the rules are too onerous would also be a form of protest. Especially when the idea is that the business has allegedly been conscripted into unprofitable tasks.


Publicly traded companies don't get to just shut down in protest. They are obligated to take whatever actions would be interpreted as best fulfilling their fiduciary obligations to the stockholders.


To be clear, by "strongly disagree with" I meant "strongly think they should lose the suit"...




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