Trade News

April 5, 2021

USTR Proposes Additional 25 Percent Tariffs on Imports from Six Countries

The Office of the United States Trade Representative has issued lists of products from six countries that may be subject to additional 25 percent tariffs. The proposed product lists identified by USTR are designed to offset digital services taxes imposed by Austria, India, Italy, Spain, Turkey and the United Kingdom, and that USTR has determined violate Section 301 of the Trade Act of 1974.

The initial Section 301 action was brought against 10 countries, however, USTR also announced it was formally terminating cases against Brazil, the Czech Republic, the European Union and Indonesia because these countries had not implemented or adopted any digital service taxes.

USTR’s announcement did not address a separate Section 301 digital services action brought against France, covering $1.3 billion worth of French goods that was suspended by the previous administration.

For the cases going forward, each of USTR’s notices requests comments and information from parties on whether action is appropriate, and if so, the appropriate action to be taken.

USTR will hold a hearing regarding the proposed remedy for each of the six subject countries, as well as a “multi-jurisdictional” hearing for issues that concern more than one country. Requests to appear at each hearing (including a summary of the testimony to be given) must be submitted to USTR by April 21, 2021, and written submissions must be submitted by April 30, 2021.

Among the products identified on USTR’s six lists are seafood, children’s clothing, jewellery, and certain furniture items.

USTR’s federal register notices, and prior relevant documents concerning the agency’s investigations, are available at the agency’s website.

(Source: U.S. Trade Monitor)

March 31, 2021

Survey: Port of Montreal Canadian Industry Input

The Canadian Association of Importers and Exporters (IE Canada) is requesting information regarding companies diverting to other ports in order to estimate the total dollar/qty impact. If members are diverting to other ports and wish to participate in a survey it is located here: https://www.surveymonkey.com/r/T2HFBQF

The information is being collected by Electro Federation Canada ( Association representing electronics, electrical and lighting manufacturers and distributors ).

If there are any insights you would like to share with IE Canada regarding the situation at the Port of Montreal, please reach out to info@iecanada.com.

March 30, 2021

Liners Begin Warning of Port of Montreal Diversions

Container line Hapag-Lloyd this morning has warned customers that it may begin diverting vessels away from call at the Port of Montreal if the labour situation deteriorates.

In an email, the company said: “With the risk of potential industrial action at the Port of Montreal, we expect that terminal performance in the port will be severely impacted…. As the situation develops, it may prove necessary to divert vessels.”

Hapag-Lloyd also notified shippers of the additional charges for moving containers by rail to or from the alternate ports of call, Saint John, New Brunswick, or Halifax, Nova Scotia in the event of a diversion.

On the weekend, the Port of Montreal’s longshore union voted almost unanimously to reject the contract offer from the Maritime Employers Association. This has caused many in the industry to become fearful of strike action.

The labour dispute has been ongoing since workers went on strike for 12 days in August 2020. A truce deal expired March 20, 2021.

During the work stoppage at least eight container ships were diverted to ports in Halifax, Saint John, N.B., and New York City, affecting thousands of importers and exporters and halting most of the 2,500 trucks that roll in and out of the port daily.

The longshore workers, who have been without a contract since September 2018, say the strike that began Aug. 10, 2020 revolved largely around wages and scheduling.

(Source: Inside Logistics)

March 29, 2021

Cargo Ship Blocking Suez Canal Now Moving

After a week of disruption, the Suez Canal is preparing to reopen after Ever Given finally gets under way.

The ship that has been blocking Suez Canal transits appears to have finally been pulled clear of the bank side and is now in mid channel.

The 20,000 teu Ever Given appears to be in the middle of the canal with its heading now showing it pointing north and making 0.5 kts over ground.

A statement from Evergreen, the vessel’s charter, said the ships would be repositioned to the Great Bitter Lake in the Canal for an inspection of its seaworthiness.

“The outcome of that inspection will determine whether the ship can resume its scheduled service,” Evergreen said. “Once the inspection is finalized, decisions will be made regarding arrangements for cargo currently on board.”

Evergreen added that it would coordinate with the vessel’s owner to deal with “subsequent matters” after the shipowner and other concerned parties complete investigation reports into the incident.

BSM, Ever Given’s technical manager, also confirmed that the vessel was safely refloated at approximately 1500 hrs local time.

German container line Hapag-Lloyd said that now the vessel was underway to the Great Bitter Lake for inspection and repair, it expected transits to start later this evening.

“It is still not clear if any vessels might be prioritized for passage,” Hapag-Lloyd said in a customer advisory. “The current backlog should be cleared within four days.”

Ever Given had been blocking the Suez Canal since March 23.

According to vessel-tracking data, 372 vessels were stalled waiting to transit the Suez Canal on Sunday. A total of 80 containerships were still waiting, but diversions of container traffic for the Asia-EU and EU-Asia trades started accelerating over the weekend, with dozens of vessels now starting to reroute.

(Source: Lloyd’s List)

March 25, 2021

Ship Stuck in Suez Canal Disrupting Daily Flow of Nearly $10B of Goods

The ship the length of four football fields that’s wedged across Egypt’s Suez Canal is bottlenecking global trade routes for a third day as at least 150 other vessels needing to pass through the crucial waterway are sitting idle, waiting for the obstruction to clear.

The Ever Given, a Panama-flagged ship that carries cargo between Asia and Europe, ran aground Tuesday in the narrow, man-made canal dividing continental Africa from the Sinai Peninsula. In the time since, efforts to free the ship using dredgers, digging and the aid of high tides have yet to push the container vessel aside — affecting billions of dollars’ worth of cargo.

Famed London-based shipping journal Lloyd’s List estimates each day the Suez Canal is closed disrupts over $9 billion US worth of goods that should be passing through the waterway.

So far, dredgers have tried to clear silt around the massive ship. Tug boats nudged the vessel alongside it, trying to gain momentum. From the shore, at least one backhoe dug into the canal’s sandy banks, suggesting the bow of the ship had plowed into it. However, satellite photos taken Thursday by Planet Labs Inc. and analyzed by The Associated Press showed the vessel still stuck in the same location.

Canal service provider Leth Agencies said at least 150 ships were waiting for the Ever Given to be cleared, including vessels near Port Said on the Mediterranean Sea, Port Suez on the Red Sea and those already stuck in the canal system on Egypt’s Great Bitter Lake.

Cargo ships already behind the Ever Given in the canal will be reversed south back to Port Suez to free the channel, Leth Agencies said. Authorities hope to do the same to the Ever Given when they can free it.

The closure of the trade lane could affect oil and gas shipments to Europe from the Mideast, which rely on the canal to avoid sailing around Africa. The price of international benchmark Brent crude stood at over $63 a barrel Thursday.

(Source: CBC News)

March 24, 2021

Uyghur Forced Labour Bill Could Pass in April, Lobbyist Says

The Senate and House versions of the Uyghur Forced Labor Prevention Act have diverged fairly substantially and the law seems likely to ultimately be closer to the Senate approach, said Ray Bucheger, a lobbyist at FBB Federal Relations. The House bill is more punitive, including a requirement for CBP to name and shame importers whose goods are detained. The Senate bill requires public comment and a public hearing open to importers before establishing a strategy to prevent the importation of goods made with forced labour. Part of that process is expected to produce guidance to importers, and there will still be a rebuttable presumption that goods from China’s Xinjiang region were made with forced labour, but if importers implemented the guidance, that would change the burden of proof, according to Bucheger.

Bucheger, who was speaking March 18 to a Coalition of New England Companies for Trade audience, said that Senate Majority Leader Chuck Schumer, D-N.Y., is looking to assemble a package of China legislation to move as soon as April, and that a forced labour bill could be one plank of it. “The political attention to this issue of forced labour is only going to grow,” Bucheger said. He said that while the House version of the bill was largely unchanged when it was reintroduced, the Senate version’s updates “better reflect reality, which is companies are actively working to decouple their supply chains from Xinjiang.”

The moderator described the Senate bill as one that would give importers more time to get their houses in order, and Bucheger said that’s also appropriate, given that new tools that would allow tracking of inputs in the supply chain are being developed.

Therese Randazzo, director of the forced labour division in the trade remedy and law enforcement directorate at CBP, said that while the agency is exploring whether there are technologies that could pinpoint the presence of cotton grown in Xinjiang, for instance, there isn’t yet a technology that companies could use to learn where all the cotton in their garments came from. “We wish there was a silver bullet as much as you do. It is resource-intensive on both sides.”

Bucheger said that Congress appropriated an additional $8 million for forced labour enforcement at CBP in this fiscal year, and he thinks members will “push for an even bigger increase this year.”

(Source: International Trade Today)

March 22, 2021

Port of Montreal Workers Reject Deal, Prompting Strike Fears

Unionized dockworkers at the Port of Montreal, Canada’s second-largest port, on Sunday rejected an offer from management, raising industry fears of a new strike following crippling work stoppages in 2020, a union representative said.

A spokeswoman for the Canadian Union of Public Employees in Quebec which represents the dockworkers said the workers want to return to the negotiating table. An overwhelming99.71% of the union workers rejected the offer.

CUPE has been negotiating a contract with the Maritime Employers Association for 1,125 longshore workers at the Port of Montreal, after their agreement expired in 2018.

Sunday marks the end of a seven-month truce agreed to by the two sides which gave a reprieve to shippers who were hit hard last summer by the strike. The workers have not formally asked to strike. CUPE has said that work schedules were one of the major issues in the talks.

The Montreal Port Authority said in a recent statement that the workers’ 19-day stoppage during the summer of 2020 cost wholesalers $600 million in sales over a two-month period,according to Statistics Canada.

The authority warned that future stoppages could cause supply chain delays and higher freight costs “right as the economic recovery and a broader reopening of the retail sector” in the provinces of Quebec and Ontario get under way.

(Sources: Reuters, CTV News)

March 17, 2021

Port of Montreal – Potential Labour Disruption

We have received notice from the Canadian International Freight Forwarders Association (CIFFA), that a potential labour disruption may occur at the Port of Montreal.

This comes following news of the March 15 hearing that took place before the Canada Industrial Relations Board on the issue of the union being said to be negotiating in bad faith. A ruling from the CIRB is expected soon. On March 12, the employer, the Maritime Employers Association, put forth a final offer to the union. This is not an agreement in principle. The union will send out the final offer to members on March 18 by email and, for those who do not have email, copies of the offer will be available at the Maison des Débardeurs office. The Port of Montreal will be closed on March 21 from 7:00 am to 3:00 pm for a special meeting of members, during which time the contents of the final offer will be discussed. The union will follow up with information on timing and format of the meeting in order to facilitate maximum attendance for voting on the final offer.

As the offer is not an agreement in principle, there is a risk that the agreement could be rejected. Should the union reject the MEA offer on Sunday, they will be in a position to provide 72 hour strike notice. Port operations would not likely be impacted before March 24, 2021.

Carson is remaining informed of the potential strike action, and will share updates with clients as they come in.

For any questions, please reach out to transportation@carson.ca.

March 17, 2021

Katherine Thai To Be Confirmed As U.S. Trade Representative

Katherine Tai, President Joe Biden’s nominee for U.S. Trade Representative, won unanimous support in a U.S. Senate procedural vote on Tuesday and appeared set for confirmation on Wednesday.

The rare 98-0 vote on the motion to end debate on the nomination means Tai, 47, will easily win bipartisan confirmation.

Confirmation would put Tai, the former chief Democratic trade lawyer for the House Ways and Means Committee and USTR China enforcement chief, to work immediately on a range of trade issues. These include trying to resolve festering disputes with European countries over aircraft subsidies and digital services taxes to confronting Chinese trade practices and enforcing new labor rights provisions in the U.S.-Mexico-Canada trade agreement.

At her confirmation hearing in late February, Tai backed the use of tariffs as a “legitimate tool” to counter China’s state-driven economic model and vowed stronger enforcement of trade agreements — including those with Beijing — while promising end a “race to the bottom” on trade.

(Source: Reuters)

March 16, 2021

Canada Posts First Trade Surplus Since May 2019 As Exports Surge

January saw Canada post its first trade surplus since May 2019 as exports surged higher to start the year.

Statistics Canada is reporting that the surplus of $1.4 billion was the largest since July 2014, and compared with a revised deficit of nearly $2 billion in December. Economists on average had expected a deficit of $1.4 billion for January, according to financial data firm Refinitiv.

The trade report follows a flash estimate by Statistics Canada earlier this week that real gross domestic product rose 0.5% in January following growth of 0.1 per cent in December.

TD Bank economist Omar Abdelrahman said the strong international trade report joins a list of other indicators in suggesting a better-than-expected start to 2021 for the Canadian economy.

Total exports rose 8.1% in January to $51.2 billion, with increases in all product sections, while in real or volume terms exports increased 5.1%.

Exports of aircraft and other transportation equipment and parts rose 72.3% in January as Statistics Canada said a Canadian airline, which it did not identify, retired a large number of aircraft, resulting in their export to the United States.

Meanwhile exports of consumer goods increased 11.6% in January, helped by higher exports of gold bars to the United States, and exports of energy products rose 5.9%, helped by both higher prices and higher volumes of crude oil exports for the month.

On the other side of the equation, imports increased 0.9% in January to $49.8 billion, while in real or volume terms they gained 1%.

Imports of energy products rose 20%, while imports of electronic and electrical equipment and parts increased 2.9%.

The overall trade surplus for the month came as Canada’s trade surplus with the United States more than doubled to $6.2 billion in January, the largest surplus since September 2008. Exports to the United States rose 11.3%, while imports from the United States edged up 0.4% to $31.0 billion.

Meanwhile, Canada’s trade deficit with countries other than the United States increased to $4.8 billion in January compared with $4.5 billion in December.

(Source: Global News)