USA

New US tariff threat raises prospect of all-out trade war

US Trade Representative has begun to draw up a list of another $200bn worth of Chinese imports to hit with a 10% duty, while China says it will strike back with combined measures in quantity and quality.

US President Donald Trump has threatened to impose tariffs on another $200bn worth of Chinese goods, adding fuel to the fears about a looming full-scale trade war between the world’s two largest economies.

Mr Trump has requested the US Trade Representative to draw up a list of Chinese imports to hit with a 10% duty.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” the president said in a statement.

The move came after Beijing announced its 25% tariff on $50bn of US goods last Friday, responding in “equal scale” to Washington’s earlier hike in customer duty on Chinese products.

“This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376bn trade imbalance in goods. This is unacceptable,” Mr Trump added. “Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.”

Should the US unveil another list of Chinese products for extra tariffs, China would have no choice but to resolutely strike back with combined measures in both quantity and quality, a spokesperson of China’s Ministry of Commerce said on Tuesday.

“Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community.”

Mr Trump’s initial list includes 818 products worth $34bn in Chinese goods, with the remainder of the $50bn is still to be decided.

The latest back-and-forth measures have sparked concerns that US and China are proceeding into a full-frontal trade war.

The National Retail Federation, a US-based industry group, said in a statement: “This is just what we predicted — a tit-for-tat trade war has erupted and American families are caught in the middle.”

The International Monetary Fund said last week that US trade policies were likely to hurt its domestic economy and undermine the world’s trade system.

IMF director Christine Lagarde said a trade war would lead to “losers on both sides” and might have a “serious” impact.

First published on www.lloydslist.com
Cichen Shen | Wednesday, 20 June 2018

No sign yet of new tariff-related modal shift

High-value global supply chains ‘are well established and will be very difficult to disrupt’ in event of trade war, says FedEx president

There are no signs yet of any significant tariff-related modal shift or plans to alter supply chains as a result of the new US tariffs announced last Friday on imports of Chinese goods, the first of which are due to take effect on 6 July.

In an earnings conference call with analysts yesterday, transcribed by Seeking Alpha, senior executives at US global integrator FedEx were asked whether a trade war could interrupt global growth or whether world was trade too entrenched to allow for any disruption.

President and COO Dave Bronczek replied: “We believe global supply chains, especially those of high-value items, are well established and will be very difficult to disrupt. We are hopeful, of course, that amenable solutions to trade policy issues will be found.”

In terms of any threat to his own company’s business model, Bronczek said: “Our global assets are at such a large scale now that it’s relatively easy for us to reposition our networks, really all around the world, should any (new) trade patterns evolve.”

Asked whether US customers were seeking expedited imports of items from China that will fall under the new tariffs on 6 July, EVP and chief marketing and communications officer Raj Subramaniam responded: “We have not seen any changes from the customer behaviour directly related to these new tariffs.”

He said technology sales were among the key indicators that FedEx monitors and it is “very highly correlated to Asia-US exports”. But it was difficult to discern any clear underlying trend because of the background noise of variables such as cell phone product cycles.

As reported in Lloyd’s Loading List, despite an agreement last month to suspend planned punitive tariffs against one another after achieving “meaningful progress” towards a new trade framework, the Office of the United States Trade Representative (USTR) last Friday released a list of products imported from China that it said would be subject to additional tariffs of 25% as part of the US response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property”.

The list of products covers around 1,100 separate US tariff lines valued at approximately $50 billion in 2018 trade values. It generally focuses on products from industrial sectors that contribute to or benefit from the ‘Made in China 2025’ industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, USTR said.

USTR said list of products consists of two sets of US tariff lines: The first set contains 818 lines of the original 1,333 lines that were included on the proposed list published on April 6. These lines cover approximately $34 billion worth of imports from China.

USTR said it had determined to impose an additional duty of 25% on these 818 product lines after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on 6 July.

The second set contains 284 proposed tariff lines identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy. These 284 lines, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

And yesterday, US president Donald Trump threatened to impose tariffs on another $200bn worth of Chinese goods, adding fuel to the fears about a looming full-scale trade war between the world’s two largest economies. Trump has requested the US Trade Representative to draw up a list of Chinese imports to hit with a 10% duty.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” the president said.

The move came after Beijing announced its 25% tariff on $50bn of US goods last Friday, responding in “equal scale” to Washington’s earlier hike in customer duty on Chinese products.

Will Waters | Wednesday, 20 June 2018

Shippers voice concerns over latest US-China tariffs

CBP will begin to collect duties from 6 July on 818 additional product lines covering $34bn worth of imports from PRC

Representatives of US retail importers have voiced their concerns about the impact of the latest US-China tariffs after the US last Friday said it would go ahead with new 25% taxes on $50 billion of Chinese imports.

Despite an agreement last month to suspend planned punitive tariffs against one another after achieving “meaningful progress” towards a new trade framework, the Office of the United States Trade Representative (USTR) last Friday released a list of products imported from China that it said would be “subject to additional tariffs as part of the US response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property”.

US Customs and Border Protection will begin to collect the additional duties on 6 July on 818 lines of the original 1,333 lines that were included on the proposed list published on 6 April. These lines cover approximately $34 billion worth of imports from China, USTR said.

US president Donald Trump reportedly also said the US would impose another $100bn of Chinese imports if Beijing “engages in retaliatory measures, such as imposing new tariffs on US goods, services, or agricultural products; raising non-tariff barriers or taking punitive actions against US exporters or US companies operating in China”.

As reported today in Lloyd’s Loading List, China has published its own list of threatened tariffs on $50bn in US goods, including soyabeans, aircraft and autos, threatening it would hit back if Washington followed up with further measures. And now Washington has completed a second list of possible tariffs on another $100bn in Chinese goods, in the expectation that China will respond to the initial US tariff list in kind, sources told Reuters.

The Guardian said China’s commerce ministry said China did not wish to have a trade war, “but the Chinese side has no choice but to strongly oppose this. We will immediately introduce tariff measures of the same scale and strength. All the results from the negotiations previously reached by the two parties will be invalid.”

It added: “It is deeply regrettable that in disregard of the consensus between the two sides, the US has demonstrated flip-flops and ignited a trade war.”

National Retail Federation (NRF) president and CEO Matthew Shay said tariffs are taxes on American consumers, noting: “These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices.

“Tax reform has encouraged US companies to expand and invest in their workforces and unleashed the strongest levels of consumer confidence in a generation. Unfortunately, these tariffs and the retaliation China has promised put all this economic progress at risk. Once again, we urge the administration to change course and develop a clear and comprehensive strategy to hold China accountable.”

A study commissioned by NRF and the Consumer Technology Association found that tariffs on $50 billion of Chinese imports, coupled with the impact of retaliation, would lead to four job losses for every job gained and reduce US gross domestic product by nearly $3 billion.

NRF testified before the Office of the US Trade Representative during a hearing last month to share the retail industry’s concerns over tariffs.

USTR explained on Friday that president Trump had stated on 29 May that USTR would announce by 15 June “the imposition of an additional duty of 25% on approximately $50 billion worth of Chinese imports containing industrially significant technologies, including those related to China’s ‘Made in China 2025’ industrial policy. Today’s action comes after an exhaustive Section 301 investigation in which USTR found that China’s acts, policies and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, and burden US commerce.”

The list of products issued last week covers around 1,100 separate US tariff lines valued at approximately $50 billion in 2018 trade values. It generally focuses on products from industrial sectors that contribute to or benefit from the ‘Made in China 2025’ industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, USTR said.

USTR said list of products consists of two sets of US tariff lines: The first set contains 818 lines of the original 1,333 lines that were included on the proposed list published on April 6. These lines cover approximately $34 billion worth of imports from China.

USTR said it had determined to impose an additional duty of 25% on these 818 product lines after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on 6 July.

The second set contains 284 proposed tariff lines identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy. These 284 lines, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

USTR said it “recognizes that some US companies may have an interest in importing items from China that are covered by the additional duties. Accordingly, USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action. USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks.”

Source: https://www.lloydsloadinglist.com

Will Waters | Monday, 18 June 2018

U.S. fruit industry concerned over Mexican tariffs

The U.S. apple and grape sectors have voiced concern over the Mexican Government’s recent announcement that it will impose retaliatory tariffs on the commodities.

On Thursday U.S. President Donald Trump announced duties of 25% and 10% would be imposed on steel and aluminum imports respectively from Mexico, Canada, and the EU, leading to an angry response and threats of reciprocal measures.

Mexico said it would hit the U.S. with tariffs on numerous food products including apples, grapes, and blueberries, but did not specify when they might come into effect or at what rate they would be.

Apples are by far the biggest export commodity to Mexico of the three fruits. USDA data shows apple exports to the market last year totaled around US$275 million.

Table grape exports last year were registered at US$94 million, while blueberry exports were far lower at US$840,000.

Todd Fryhover of the Washington Apple Commission said on Thursday that the industry was in a “wait and see” mode as there was no official word on what rate the duty would be.

He added that Mexico is Washington’s leading export market, with a value of US$215 million last season.

“Any duty, just like the ‘potential’ India duty, will be impactful – but how impactful will be determined once we have more details,” he said, referring to India’s recent threat to impose an additional 30% duty on U.S. apples.

Alexander Ott of the California Apple Commission said: “We are concerned about the tariffs from Mexico. It is always concerning that countries tie commodities to other industries as leverage.”

“Mexico is the second largest export market for California apples and a significant market for other apple-producing states. The effects of U.S. Apples not being able to ship to Mexico due to high tariffs not only prevents agricultural to provide a healthy and nutritious product to consumers but may have an impact on other markets due to those apples not being able to ship into the existing markets.

“We hope there will be a quick resolution to the trade situation.”

As for table grapes, John Pandol of California-based Pandol Brothers explained the state has recent experience with retaliatory duties on the issue of Mexican trucks operating in the U.S.

He said that a 45% duty caused California grape exports to the market to drop from 4.5 million to 1.5 million boxes several years ago.

“The multiple impacts of price pressure from Mexico and a larger percentage of the crop being channeled into the remaining markets spells a challenging season,” he said.

“Many of us who think President Trump has done many positive things in many areas are confused on his foreign trade posture. In one meeting a grower stated, “we’ll fall on the sword on the China deal but leave NAFTA [the North American Free Trade Agreement] alone.”

“It is clear that those in our industry who dismissed fear of reprisals were mistaken. I’m watching a lifetime of market access work being thrown under the bus.”

Canada also announced it would impose a 10% tariff on U.S. cucumbers. Last year the U.S. exported US$13.7 million of the vegetable north of the border, according to USDA data.

The EU and Canada later announced a list of U.S products on which they would increase taxes, both including orange juice on their lists.

Florida Citrus Mutual spokesperson Andrew Meadows on Monday said that the “vast majority” of the state’s orange juice production is consumed domestically.

“Although I don’t know of a specific grower or processor who will be directly affected by the tariffs, Florida’s production has gone down drastically in the past decade due to hurricanes and disease so we have very little exports of Florida juice,” he said.

www.freshfruitportal.com

Produce in firing line as US sparks trade war

The EU, Canada and Mexico consider retaliatory measures in response to US tariffs on steel and aluminium imports
The US has announced the imposition of tariffs on steel and aluminum imports from the EU, Canada and Mexico, prompting fears of a protracted and damaging trade war.

Almost immediately after president Donald Trump’s announcement, the Mexican government issued a statement announcing that it would impose equivalent measures on various US imports including apples, table grapes and cranberries.

The measures would remain in effect until the US government eliminated the import tariffs, the Ministry for the Economy said.

The latest trade data available from ITC suggests that, of the three products, the US apple export trade would stand to lose the most from a Mexican tariff hike.

Mexico is by far the largest importer of US apples, with sales worth US$276.5m last year, compared with US$174.3m in Canada and US$97.4m in India.

Mark Powers, president of the Yakima, Washington-based Northwest Horticultural Council, said the move was expected to cause substantial damage to the industry.

Mexico is the third major market to impose tariffs on Washington apples as a result of US trade policy on steel and aluminium this year.

Last week, India announced plans to put a 30 per cent retaliatory tariff on US apples – on top of the 50 per cent tariff that they are already subjected to, while in China US fruit imports have faced a 15 per cent hike in tariffs since 2 April.

Sales of US fresh apples to Mexico may have declined slightly in recent years, but last year they were 21 per cent up on the previous campaign.

Meanwhile, fresh cranberry exporters in the US have seen the value of their business in Mexico increase considerably over the past few years, albeit from a low starting point. According to ITC, Mexican import sales rose by 30 per cent to just under US$1.27m between 2013 and 2017.

As for table grapes, the value of US sales to Mexico fell by 2 per cent to US$97.2m during 2013-2017, although ITC noted a 26 per cent increase in 2017 compared with the previous campaign.

WTO case opened

The EU, meanwhile, has confirmed it is opening a case at the World Trade Organisation in response to the new US duties, with EU trade commissioner Cecilia Malmström expected to announce retaliatory "proportionate" tariffs on US exports including cranberries "in accordance with WTO rules".

Federica Mogherini, the EU high representative on foreign policy, told journalists: "The European Union will today proceed with the WTO dispute settlement case adding those additional duties on a number of imports from the United States. The European Union measures will be reasonable, proportionate and in full compliance with WTO rules and obligations.”

The decision by the White House was dubbed “patently absurd” by the UK’s international trade secretary, Liam Fox, who suggested the UK would be prepared for “tit-for-tat” moves. “We absolutely do not rule out counter measures,” he asserted.

When the initial threat of tariffs was raised by the US back in March, the EU pledged to retaliate with tariffs on American imports such as orange juice, cranberries and bourbon.

“Logically, these unilateral measures on steel and aluminium will lead to multiple counter reactions around the world, and for sure they will be challenged within the WTO,” said Philippe Binard, general delegate of European fresh produce association Freshfel Europe.

“The EU has already published a list of potential retaliatory measures that will be effective from 18 June, including on orange juice, cranberry juice and sweet corn. Elsewhere in the world, retaliatory measures may include increased taxes on US fresh fruit and vegetables.”

The question, according to Binard, is whether or not the US will remove its measures on steel and aluminium in order to avoid triggering such a response.

Additional reporting by Mike Knowles and Maura Maxwell

Source: http://www.fruitnet.com/asiafruit

Author: Tom Joyce

California stone fruit: less but more optimally-sized fruit predicted

Thanks to some seasonal effects including freezes and rain, there are varied reports about how the California stone fruit crop looks this season.

“The overall prospects for stone fruit this year are of a good crop for most of the season,” says Ken Barbic Senior with The Fresh Connection based in Lafayette, Ca. “But the overall crop is also diminished because of a freeze we had. And some commodities such as plums had a little less fruit set due to cool or wet weather during pollination time.”

Commodity breakdown
Plums: “In general, they’ll be light,” says Barbic Sr. “They were also a bit light last year.” Despite the lessened supply, sizing of the fruit looks good. “We’re expecting demand to exceed supply,” adds Barbic Sr., which could mean higher prices and less price fluctuation. There are also a few new varieties of plums which should take the season all the way into December. The estimated start for plums this season is the last part of May, with good volume by mid June.

Nectarines: “Nectarines are also going to be a bit shorter than normal,” says Barbic Sr. “But toward the end of May, they should get back to regular levels.” The first of the crop, the Honey May Nectarines, began last week.

Peaches: Peaches began this week. “We should have plenty of peaches and nectarines once we get through the first few weeks of the season,” says Barbic Sr. He also adds that the Southern U.S. and other states have more normal crops this year compared to last year, which could make for a more competitive domestic peach market this season.

Apricots: “There are a few varieties of apricots with very little crop on them and others that have a more normal crop,” says Barbic Sr. “Overall the crop is light but there’s still plenty of fruit available.” In terms of timing, apricots got the latest start to the season by starting some five to seven days late compared to last year.

Cherries: Cherries also began harvesting last Friday, although the volume is starting small. The timing is similar to last year’s seasonal start.

Good sizing
Barbic Sr. adds that while the overall crop sizing may be down, it may make for better fruit. “Usually less on the tree means a better-sized fruit so the quality should be good and the sizing in the range customers are looking for, whether it’s for an export or domestic market,” says Barbic Sr. Less on the tree may also mean less pressure on labor. “Less labor may be needed to thin out the trees in order to get that optimum sizing,” adds Barbic Sr.

Meanwhile, what remains concerning for California growers is transportation. “This includes the availability and allocation of the truck supply and transporting via trucks from the West Coast to the East Coast,” notes Barbic Sr. (Late last year, the Federal Motor Carrier Safety Administration ruled that trucks need to carry electronic logging devices or ELDs, a ruling which many growers say has had several financial repercussions.) “In many cases, it costs a lot more to bring a box of peaches from the West Coast to New York or Boston than it does to send a box of peaches to a place like Taiwan.”

For more information:
Ken Barbic Sr.
The Fresh Connection
Tel: +1 (925) 299-9939
ken@thefreshconnection.com
www.thefreshconnection.com


Publication date: 4/26/2018
Author: Astrid van den Broek
Copyright: www.freshplaza.com

Exporters in India expecting to send more mangoes to the USA

India is looking at a 40% increase in mango exports to the US during the current season. The export of the fruit is likely to start from the second half of April. In order to meet all standards, it is mandatory to irradiate mangoes before exporting then to countries such as the US and Australia.

The irradiation processes take place at three locations - Nashik-based Lasalgaon irradiation centre of Bhabha Atomic Research Centre, Vashi Irradiation centre of Maharashtra State Agriculture Marketing Board in Mumbai and the Bengaluru irradiation centre.

Almost 90% irradiation of mangoes for exports to the US and Australia take place at the Lasalgaon and Mumbai irradiation plants. Last year, the country had exported 1,165 tonnes of mangoes irradiated at the Lasalgaon and Mumbai centres.

"This year, we are expecting close to 40% rise in export of mangoes to both the countries. This means that we are expecting mango export of 1,500 tonnes to those two overseas countries this season," a source told timesofindia.indiatimes.com.

"We are expecting a quarantine inspector from the US by mid-April for inspection during the export season. Mango export to the US will begin around two-three days after this person starts inspection work here," an official from the Lasalgaon facility said.



Publication date: 3/27/2018

Source: www.freshplaza.com

Australian import industry squeezed

Government changes to pre-clearance inspections are having harsh effects on Australian importers.

The Overseas Pre-clearance Inspection (OPI) scheme, offered through Australia’s Department of Agriculture and Water Resources (DAWR) since 2001, is about to disappear.

The government department made a decision to eliminate the program in 2016 meaning importers will have to inspect and clear fruit for arrival onshore in Australia.

Previously, Australia appointed inspectors who travel to selected ports overseas to pre-clear produce as it meets phytosanitary approvals. Now, the number of inspectors is being reduced and moved back home.

A spokesperson from the DAWR told Asiafruit that the program is being phased out because on-arrival inspection provides greater opportunities for the DAWR to drive compliance and better allocate resources according to biosecurity risk.

Industry representatives are not convinced.

A member of the Australian Horticultural Exporters and Importers Association (AHEIA) told Asiafruit that wait times for onshore clearance are sitting at around 7 or 8 days, adding an extra week to their pre-order schedule.

“The retailers don’t want to hear ‘I’m sorry but we can’t get an inspection for your program,’” they said.

Industry sources told Asiafruit that Australia’s import sector is not only concerned about their business and relationships, but the flow-on effect for export deals.

“We know that in the past several of our neighbours have used non-phytosanitary issues to restrict fruit imports,” said Neil Barker, CEO at BGP International. “When they see how effective the DAWR protectionist policy has been I have no doubt they will consider adopting the policy. If an Australian grape shipment to Jakarta airport regularly spent seven days in the cargo terminal waiting for an inspection my guess is that the trade would stop.”

Dominic Jenkin, CEO of the AHEIA explained that when inspectors are placed overseas they’re able to approve produce more efficiently as multiple orders might be stationed in a single location at a major port; last year the programme operated across 75,000 tonnes of fresh fruit imports from New Zealand and the US.

The program was offered to a handful of countries, which has dwindled over the years. Currently availability is only for the USA and New Zealand on selected fruit and veg.

The DAWR said that the removal of OPI does not impact on the number of inspectors available to the department.

However, in Australia, inspectors are having to travel much longer distances between warehouses to inspect and approve. Because of the delays, importers are also having to absorb the cost and losses from shortened shelf life and storage fees to hold sealed containers while they wait for a scheduled inspector.

To curb the problem, the DAWR decided to implement a Compliance-Based Inspection (CBI) scheme last year, which was piloted during the New Zealand avocado season.

The CBI scheme means that if a product reaches a certain number of approved inspections (for avocados it’s five in a row), they will then move to a reduced inspection rate (again for avocados, inspections will reduce to one in four shipments).

“The new scheme was intended to reward importers who could achieve a good compliance history with decreased inspection rates and faster entry. To date, no importers have achieved these reduced inspection rates,” New Zealand Avocados told Asiafruit in a statement.

“An overriding reason is the difficulty of accurately identifying often globally distributed organisms (and their eggs), down to a taxonomic level to confirm they are not of quarantine concern,” they said.

The same issue appeared in 2016 when lemons and limes from the US were subject to the trial and saw backlogs of up to ten days.

While experiencing setbacks in gaining approval, a lot of the annoyance over changes stems from the where funding of the inspection program comes from.

“The frustrating thing is that it’s industry funded. So, most of the time the limitation is cost for government processes, but this is definitely not a case of that. The industry has never said ‘we’re not willing to pay for this,’” said the anonymous AHEIA member.

The DAWR sad it’s working closely with industry and trading partners to optimise compliance and minimise any disruption, while facilitating safe trade.

Source: http://www.fruitnet.com/asiafruit

Author: Camellia Aebischer