October imports at major U.S. retail ports exceeded 2 million containers in a single month for the first time as retailers continued to rush merchandise into the country ahead of the now-postponed Jan.1 increase in Section 301 tariffs on goods from China, the National Retail Federation said. President Donald Trump “declared a temporary truce in the trade war” when he put a 90-day hold on hiking the 10 percent tariffs to 25 percent, but “these imports came in before that announcement was made,” NRF said. “We hope that the temporary stand-down becomes permanent, but in the meantime there has been a rush to bring merchandise in before existing tariffs go up or new ones can be imposed.” U.S. ports handled 2.04 million 20-foot containers or their equivalents in October, the latest month for which after-the-fact numbers are available, NRF said. That was up 9 percent from September and up 13.6 percent year-over-year, it said. The previous single-month record, 1.9 million containers, was set in July, it said. NRF estimates ports handled 2.01 million containers in November, a 14 percent year-over-year increase. It forecasts 21.8 million containers will be handled in 2018, a 6.5 percent increase from the record 20.5 million handled in 2017. It sees a “significant slowdown” in 2019 import growth “as the market adjusts to higher prices due to the Trump tariffs and the impact on consumer and industry confidence going forward.”
Increased material costs was the top cost pressure for 20 percent of CEOs surveyed by the Business Roundtable, and that group's leader said tariffs are the reason why. Only labor costs was mentioned by more CEOs. Business Roundtable CEO Josh Bolten said that while the survey, released Dec. 7, didn't ask which set of tariffs is the problem, he's hearing from companies that metals tariffs are a bigger burden than the Section 301 tariffs. That's because a relatively small amount of production uses inputs from lists one and two of Chinese imports, and steel is used in many sectors. "The ones that have gotten the biggest public attention are the auto manufacturers," he said, "but really it's across the membership."
A withdrawal of the U.S. from NAFTA by President Donald Trump could help push the new NAFTA through Congress, according to Sen. Chuck Grassley, the Iowa Republican who will take over the Senate Finance Committee next year. Grassley, who was speaking on an agriculture radio program on Dec. 3, also praised the president's approach to trade more broadly.
"I am a Tariff Man," tweeted President Donald Trump Tuesday, three days after postponing hiking to 25 percent the third round of Section 301 duties, giving U.S. and Chinese negotiators 90 days to work out a comprehensive trade deal (see 1812030002). "When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so," tweeted Trump. "It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN." Negotiations with China "have already started," he tweeted. "Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina," he said about Chinese President Xi Jinping.
International Trade Today is providing readers with some of the top stories for Nov. 26-30 in case they were missed.
Tech groups generally hailed Saturday’s White House announcement that the Trump administration won’t raise the third tranche of 10 percent Section 301 tariffs to 25 percent as planned Jan. 1, giving U.S. and Chinese negotiators 90 days to work out a comprehensive deal to curb China’s allegedly unfair trade practices. Some groups complained that left buried under the positive headlines President Donald Trump and Chinese President Xi Jinping generated at the G-20 summit was that three rounds of 10-25 percent tariffs imposed since early July will remain in force indefinitely.
A 90-day pause in implementing increased Section 301 tariffs will run from Dec. 1, the White House said as it corrected the record the evening of Dec. 3. National Economic Council Director Larry Kudlow had erroneously said that the 90-day delay in increasing tariffs on $200 billion in Chinese imports would start Jan. 1. That was the day that tariffs were scheduled to rise from an additional 10 percent on the base rate to 25 percent. Jennifer Hillman, a Georgetown Law professor and former general counsel at the Office of the United States Trade Representative, tweeted that the Federal Register will have to be updated to reflect the new deadline, which should fall around March 1.
Importers need to be ready to defend to CBP any changes in country of origin that moves a product outside the Section 301 tariffs on goods from China, said Doug Zuvich, a partner in KPMG's Trade and Customs Services group. Zuvich, a former customs auditor, and others at KPMG discussed rules of origin during a Nov. 30 webinar. "It's really important to know the mindset from Customs, that they're going to come at this most likely thinking the worst," Zuvich said.
Section 301 tariffs on Chinese imports topped the lists of supply-chain “headwinds” that Dell Technologies and HP encountered in their most recent quarters, said executives with both companies on separate earnings calls Thursday.
Section 301 tariffs on Chinese imports topped the lists of supply-chain “headwinds” that Dell Technologies and HP encountered in their most recent quarters, said executives with both companies on separate earnings calls Thursday.