Over the last several weeks, the ocean carrier alliances have announced a number of changes to their Asia to U.S.A. ocean services. Changes such as removing entire service strings, implementing void sailing programs, and combining service strings (which effectively removes one or more service loops), are now being implemented. These changes suggest that the carriers are seeking solutions to deal with rising bunker costs, ongoing supply overcapacity in the Asia to U.S.A. trade, concerns over the U.S.A. / China trade tensions, and the ultimate effect on future demand in the market.
News / Supply Chain Alerts
On Tuesday, July 10, 2018, the United States Trade Representative (USTR) released the proposed list of Chinese products that could be subject to an additional 10 percent tariff, a proposed modification to the earlier actions taken in the U.S. Section 301 investigation of the acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation.
On Friday, July 6, 2018, the effective date of the new U.S. Section 301 tariffs, the United States Trade Representative (USTR) published the procedure on how companies can request exclusion from the tariffs on specific products from China.
Ocean carriers worldwide have announced Emergency Bunker Surcharges (EBS), citing significant increases in bunker prices since the beginning of the year. Bunker refers to the fuel that powers the vessels and represents a significant portion of the carriers’ cost. To offset their increased bunker costs, carriers will apply the following surcharges to all cargo shipping to and from North America, effective July 1, 2018:
|LCL||20′ DV||40′ DV / HC||45′ DV|
|$3 USD W/M||$60 USD||$120 USD||$120 USD|
MIQ Logistics will continue to monitor the market to mitigate the surcharges and ensure our customers receive the most competitive rates and consistent quality service.
For further information, please contact your local MIQ Logistics representative.
The Office of the United States Trade Representative (USTR) today released a list of products imported from China that will be subject to additional tariffs as part of the U.S. response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property.
The list of products issued today covers 1,102 separate U.S. tariff lines valued at approximately $50 billion in 2018 trade values. This list was compiled based on extensive interagency analysis and a thorough examination of comments and testimony from interested parties. 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. The list does not include goods commonly purchased by American consumers such as cellular telephones or televisions.
The International Longshoremen’s Association (ILA) has reached a tentative agreement on a six-year Master Contract with the United States Maritime Alliance (USMX). The current USMX-ILA Contract expires on September 30, 2018. The tentative agreement will remove much uncertainty and ensure labor accord through the year 2024 for the U.S. East Coast and Gulf Coast.
On Tuesday, May 29, it was announced that the administration would proceed with its Section 301 of the Trade Act of 1974 proposal to impose a 25% tariff on selected Chinese goods. This is approximately 10 days after declaring that the tariffs would be placed on hold. To clarify this rapidly changing situation regarding tariffs, below is an outline of important points and a timeline of pertinent events.
The General Administration of Customs of the People’s Republic of China (GACC) has issued Announcement No.56  to adjust the manifest rules of import and export in the country, effective June 1, 2018. MIQ Logistics will adhere to the new requirements and transmit all required electronic data to China Customs prior to arrival or departure of air and sea shipments. To avoid delays, the following key points require your attention in your future shipping documentation:
- Manifest submissions must be made 24 hours prior to loading. This includes all import and export shipments moving by air or sea to / from / via China mainland ports.
- The manifest must accurately and completely reflect all goods under the bills of lading and waybills.
- The cargo description must be complete, accurate, and cover all the goods.
- Full contact details of the Shipper and Consignee (or the Notify Party if Consignee is “To Order”) are mandatory, including the Enterprise Codes. For example, for China — USCI (Unified Social Credit Identifier), OC (Organization Code); U.K. – Company Number, VAT (Value Added Tax) Identification Number; USA — CIK (Central Index Key), EIN (Employer Identification Number).
Starting Friday June 1, 2018, the 25% tariff on steel and 10% tariff on aluminum will go into effect for the European Union, Canada, and Mexico. The tariffs were originally announced in March (Steel and Aluminum Tariff List) but provided a temporary exemption to several U.S. allies while negotiations of export limits to the U.S. were discussed. According to U.S. Commerce Secretary Wilbur Ross, export limits were negotiated with South Korea, Argentina, Australia, and Brazil. However, Ross said negotiations didn’t go as far as he wanted them to with Canada, Mexico, and European diplomats and talks will continue.
New Tariffs Suspended While China Trade Negotiations Continue
During an appearance on Fox News Sunday on May 20, Treasury Secretary Steven Mnuchin said that around $150 billion worth of proposed tariffs on Chinese goods pursuant to Section 301 of the Trade Act of 1974 are on hold as the two countries continue trade negotiations to reduce their deficit.
“We’re putting the trade war on hold, so right now we have agreed to put the tariffs on hold while we try to execute the framework. … We have an agreement with China that they’re going to substantially agree to it.”