Flexport's clients would have paid about $13.6 million in additional customs duties if the proposed Section 301 tariffs (see 1804040019) were in place in 2017, the company's CEO Ryan Petersen said in a blog post. "While Flexport believes that global trade is absolutely essential to a free and prosperous society, our immediate focus in the coming weeks will be on the impact to our clients," he said. "We also believe these algorithmically chosen new taxes -- which were 'drafted to achieve the lowest consumer impact' -- are navigable by a resilient supply chain industry."
Both the U.S. proposal for Section 301 tariffs (see 1804040019) and the Chinese response (see 1804030070) are likely stage-setting for future negotiations, said Merrill Lynch analysts in an April 4 note to investors. "Despite the exchange of tariff threats, we believe there is still room for negotiation between the US and China," Helen Qiao and Sylvia Sheng said in the research note. "We maintain our view that China will continue its 'carrot and stick approach,' threatening retaliation but also proposing to expand its imports of US products, cut the auto duty, and ease restrictions for US companies investing and selling in China in negotiations," the analysts said. "As a result, we expect the final version of both the US and China trade measures to be more toned down relative to the initial announcement."
Importers that are lobbying the executive branch so that they can continue to bring foreign metals in without tariffs may need to disclose their activities under the Foreign Agents Registration Act, lawyers from Covington & Burling wrote in a client advisory March 28. It may seem strange that lobbying on commercial tariffs could trigger FARA, they wrote, but they pointed to the history of tariff lobbying to show how it could happen. When SUVs were reclassified as trucks, rather than cars, and therefore imports were subject to a 25 percent tariff rather than a 2.5 percent tariff, heavy lobbying ensued. At a congressional hearing in 1991, senators asked whether that lobbying should have been covered by FARA. "In testimony and written submissions before Congress examining the automobile tariff lobbying, Department of Justice officials stressed that lobbying directed at 'enlarging the U.S. market for goods produced in [another] country' was predominantly advancing a foreign interest," the advisory said.
FedEx CEO Fred Smith worries about the impact of President Donald Trump’s recent imposition of “protectionist tariffs” on imported steel and aluminum because “history has shown repeatedly that protectionism is counterproductive to economic growth,” he said on a March 20 earnings call. “The better approach is to encourage open markets and free exchange of products and services and to reduce barriers to trade,” he said. Smith thinks “the correct way to go here is to deal with China on the issues with China,” he said. The “overall” aim should be to “lower trade barriers” and tariffs around the world, “not to engage in less trade,” he said. FedEx will “continue to advocate against any move towards protectionist trade policies that could slow economic growth and undermine all the positive impacts” from the tax overhaul, company Chief Information Officer Rob Carter said. In the roughly two weeks since Trump announced he would impose the steel and aluminum tariffs on all but Canada and Mexico, “we’ve not seen any quantifiable shipper behavior change” as a result, Carter said.
The Chapter 11 bankruptcy filing by Toys 'R' Us could reduce new orders of toys in the near future, said Steve Pasierb, president of The Toy Association, in a letter. "In addition to the direct negative impact on some companies, the flood of liquidation product from [Toys 'R' Us] can likely weaken sales at both mass and specialty retailers," he said. "Likewise, there will be a short-term negative influence on orders coming into our manufacturing members, at least until the ramp-up happens to stock for the 2018 holiday season." The toy industry is now "at an inflection point," he said.
Steel and aluminum importers should begin an analysis of the "immediate and potential duty exposure" as a result of the coming tariffs on the metals (see 1803080025), trade consultancy Livingston International said in blog post. Importers may also consider "the potential to make the case that those materials are not available or are in short supply from US sources," to avoid the tariffs. Steel and aluminum may also want to look into modifying products "for import such that the HTS classification no longer falls under these proclamations," the company said. Also important will be checking that articles believed to be affected by the tariffs are correctly classified and ensuring that the "broker will be prepared to compliantly apply the Chapter 99 provisions for affected articles of steel and aluminum."
The National Council of Textile Organizations and the American Fiber Manufacturers Association will merge effective April 1, NCTO said in a press release. The merged entity will take NCTO’s name, and still be led by NCTO President and CEO Auggie Tantillo, the trade group said. “The NCTO merger with AFMA strengthens the U.S. textile industry’s ability to influence federal policy,” said NCTO Chairman Bill McCrary. “It brings new members and financial resources to NCTO and extends the organization’s political reach. It also cements NCTO’s status as the voice of every facet of the U.S. textile production chain, a fact that will help NCTO to more effectively influence federal policies that affect U.S. textile investment, production and workers.”
Coming new drawback processes under the Trade Facilitation and Trade Enforcement Act (see 1802120020) are the source of "considerable concern," said Steven Baker, a lawyer who chairs the Customs Committee of the American Institute for International Steel, in a blog post. While the drawback processing is set to move to ACE on Feb. 24, "not all functions are supported in ACE, and as of this writing no regulations have been issued," Baker said.
FedEx Trade Networks recently instituted a new organization structure for "specialty logistics and e-commerce solutions," it said in a news release. Several companies will be realigned under FedEx Trade Networks, it said. This new organization will now include: FedEx Custom Critical, FedEx Cross Border, FedEx Supply Chain, FedEx Trade Networks Transport and Brokerage, and a new company called FedEx Forward Depots. FedEx Forward Depots will have "responsibility for Critical Inventory and Service Parts Logistics, 3-D Printing, Repair Center and the FedEx Packaging Lab," it said.
The Airforwarders Association signed a memorandum of understanding with The International Air Cargo Association (TIACA), AfA said in a news release. The memorandum includes shared participation in each other's events, "exchange of information on projected activities and relevant events of both associations," and "continuous consultation," AfA said.