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Canada-European Union Trade Pacts Unaffected During U.K.’s Brexit Transition

A statement issued on January 31, 2020 by Global Affairs Canada noted the following: “During the Brexit transition period, all Canada-EU agreements will continue to apply to the U.K. This includes the Canada-EU Comprehensive Economic and Trade Agreement (CETA)—which means that trade between Canada and the U.K. will continue to benefit from duty-free access on 98% of products, and businesses should see no change in how they trade with the U.K. during this transition period.”

The Brexit transition period will last “at least until December 31, 2020,” according to the statement.

Source: Canada.ca

U.S. Trade Gap Expands In December

The Commerce Department reported that the U.S. trade gap expanded from $43.7 billion in November to $48.9 billion in December fueled by growing imports and lackluster exports. “The rebound in imports partly reflected the unwinding of disruptions in November to Canadian rail and pipeline shipments,” explained Paul Ashworth, Chief U.S. Economist at Capital Economics. Imports of industrial supplies and materials, along with crude oil and non-monetary gold, all experienced significant increases in December. Meanwhile, a reduction in exports of automobiles, parts and engines contributed to a meager 0.8 percent overall growth in U.S. exports.

Source: Nasdaq.com; BEA.gov

Trade Tensions With China Ease, But Europe Draws Attention

The recent signing of “phase one” of a trade deal between the U.S. and China was welcome news. Nonetheless, trade tensions between the U.S. and European Union continue.

For starters, a trade deal with the U.K. might not be a foregone conclusion, warn analysts. Sources have noted that Britain’s National Health Service (NHS) is a “national treasure” in the U.K., and the prospect of allowing foreign pharmaceutical companies more access to healthcare opportunities could be a sticking point.

In addition, the U.S. and U.K. could be at odds over food safety negotiations. For example, the EU has disallowed U.S. imports of hormone-treated beef and chicken washed in chlorinated water for years, and it’s debatable whether the U.K. would change its stance on this policy.

Indeed, although the U.K. was the fifth-largest export market for the U.S. in 2018, agricultural goods comprised a small fraction of overall trade.

Meanwhile, EU members are threatening, or already imposed, digital services taxes on some of the largest tech companies in the U.S.

The U.S. and France agreed recently to de-escalate tensions over France’s digital services tax (DST), which prompted the Trump administration to threaten 100 percent tariffs on imports of French Champagne and other goods.

Despite the temporary truce with France with respect to DST, the U.S. continues to issue tariffs against a list of European goods over the EU’s subsidies to Airbus.

Furthermore, the Trump administration continues to threaten the EU with auto tariffs.

“We continue to believe that despite a temporary truce, subsidies and the DST (digital services tax) will remain real issues—and useful rationales for tariffs,” noted Chris Krueger, managing director with Cowen Washington Research Group. “As tariffs halt on the edges of the Pacific, the Atlantic theater is set to escalate—with aviation, consumer goods, agriculture, Big Tech, and energy in the crosshairs.”

The status of the World Trade Organization (WTO) is yet another unknown, after the U.S. blocked the appointment of WTO judges recently.

U.S. Trade Representative Robert Lighthizer explained that the U.S. seeks to rectify an “unlevel playing field” within the WTO.

American trade officials cited China’s “dumping” of below market cost goods in the U.S. as an example of abuses by WTO member-nations.

Source: CNBC.com

Effective February 14, Retaliatory Tariffs On Certain Chinese Imports Drop From 15 to 7.5 Percent

As a result of “phase one” of the U.S.-China trade agreement signed on January 15, 2020, the Office of the U.S. Trade Representative issued a January 22 notice, which provided for certain retaliatory tariffs imposed by the U.S. against China to be reduced from 15 percent to 7.5 percent, effective February 14, 2020.

The affected products are listed in Annex A of the August 20, 2019, Federal Register notice (84 FR 43304), available here.

Source: FederalRegister.gov

House Democrats Unveil $760 Billion Infrastructure Bill

On January 29, 2020, U.S. House Democrats unveiled a $760 billion infrastructure bill that would fund spending on roads, bridges, brownfield sites, and other aspects of the nation’s transportation network over a five-year span.

The legislation is the latest attempt in Congress to find a means to fund infrastructure spending since the existing gas tax revenue has failed to meet the necessary funding requirements.

Lawmakers face a September 30, 2020 deadline to reauthorize transportation spending.

Source: Reuters.com

Farm Interests Seek More Funding For CBP Inspections

A group of agriculture industry stakeholders are urging the U.S. House of Representatives to pass legislation to fund additional U.S. Customs and Border Protection (CBP) personnel and resources aimed at preventing harmful pests and diseases from entering the U.S.

The “Protecting America’s Food & Agriculture Act of 2019” would give CBP authority to hire more agriculture specialists and technicians, and train 20 new canine teams.

In fiscal year 2018, CBP reported that its agriculture specialists intercepted 319 pests and quarantined 4,552 materials, including meat, plant, animal byproducts and soil, reported SupermarketPerimeter.com.

The proposed legislation comes at a time when CBP is experiencing a staffing shortage of these personnel.

Source: SupermarketPerimeter.com

CBP’s 2020 Trade Symposium Set For March 10-11 In Anaheim, California

U.S. Customs and Border Protection’s (CBP) 2020 Trade Symposium will take place March 10-11 at the Anaheim Hilton in Anaheim, California. General sessions will include discussions on International Trade Organizations, Interagency Collaboration, and the United States-Mexico-Canada Agreement (USMCA).

This year’s program also includes sessions on the following topics:

  • Forced Labor session will address social compliance and enforcement goals.
  • E-Commerce session will provide a detailed status and outcomes regarding Entry Type 86, 321 Data Pilot, and the collaboration between CBP and Industry.
  • Collaboration & Process Modernization will deliver CTPAT Minimum Security Criteria implementation status and outreach and the future state of In-bond, and Export capabilities.
  • Technical & Operational Innovation will provide insight into the ongoing innovative efforts and accomplishments to include the Blockchain proof of concept, ACE and emerging technologies.
  • Center 1-on-1 Sessions will offer attendees the opportunity to meet with their Center of Excellence and Expertise leadership.
  • Binding Rulings Workshop will provide attendees an opportunity to learn more about acquiring a binding ruling and how to leverage the ruling to achieve compliance.
  • Partner Government Agency (PGA) Speed Chat will offer attendees one on one open discussions with multiple Partner Government Agencies.

Source: CBP.gov

Mexico Ranks As Top U.S. Trade Partner

Mexico edged out Canada and China to emerge as the leading U.S. trade partner in 2019, according to U.S. Census Bureau data.

Mexico’s trade with the U.S. totaled $614.5 billion last year, a 0.48 percent increase over 2018. Automotive goods along with computer monitors and TVs are among Mexico’s leading imports from the U.S.

Canada remained the second-biggest trade partner, while China fell from the number one spot to third place due to ongoing trade tensions with the U.S.

From 2018 to 2019, China’s trade with the U.S. plummeted by $100.95 billion to $346.62 billion, its lowest level since 2014.

The top ten U.S. trade partners (in $ billion) for 2019 include:

1. Mexico – $614.5
2. Canada – $612.12
3. China – $558.87
4. Japan – $218.29
5. Germany – $187.76
6. South Korea – $134.41
7. United Kingdom – $132.34
8. France – $95.22
9. India – $92.08
10. Taiwan – $85.48

Source: Forbes.com; Census.gov

Accenture Cybersecurity Report Explores Latest Threats

Accenture’s 2019 Cyber Threatscape Report finds that third-party partners and suppliers are increasingly targeted by criminal groups to access organizations’ otherwise secure systems, while shifts in the global balance of power are also contributing to new security risks.

According to Accenture, “[c]ybercriminals are testing organizations’ resilience by layering attacks, updating techniques and establishing new, intricate relationships to better disguise their identities.” The report notes that “[i]t is no longer enough to plan for attacks or understand what to expect. To help reduce business risks, organizations need to make a security pivot of their own.”

The report lists the following as five “factors” that are affecting the “cyberthreat landscape”:

  • Compromising geopolitics: New threats emerge from disinformation and technology evolution
  • Cybercriminals adapt, hustle, diversify and are looking more like states
  • Hybrid motives pose new dangers in ransomware defense and response
  • Improved ecosystem hygiene is pushing threats to the supply chain, turning friends into “frenemies”
  • Life after meltdown: Vulnerabilities in cloud infrastructure demand costly solutions

In addition, events such as elections in the U.S. and across Europe; bids by countries like Georgia, Ukraine, Sweden and Finland to join NATO; the European Union’s plans to add nations like Turkey, Montenegro and Serbia; and the 2020 Tokyo Summer Olympics are vulnerable to cybersecurity threats.

Source: SpendMatters.com; Accenture.com

Trade Shows/Conferences Location Date
JOC’s TPM Long Beach, CA Mar 1 – 4
MODEX Atlanta, GA Mar 9 -12
IWLA San Diego, CA Mar 15 – 17
ICPA (International Compliance Professionals Association) San Diego, CA Mar 15-18
Mid-America Truck Show (MATS) Louisville, KY Mar 26 – 28
SCOPE Supply Chain Conference Chicago, IL Apr 5 – 7
NAFTZ (National Association of Foreign-Trade Zones) Minneapolis, MN May 17-19
AAEI (American Association of Exporters and Importers) Ft. Lauderdale, FL Jun 15-17

 

2020 UPS® Tradenomics Webcast Series

All webcasts are complimentary

Register for the series here

March 12: Update on Brexit

Time: 11:00-11:45PM ET (Please note the AM start time)

UPS Europe Customs Affairs and UPS Customs Brokerage will provide an update on Brexit and what is planned ahead.

Register for the webinar here

April 15: Transitioning to USMCA

Time: 3:00-3:45PM ET

UPS Public Affairs and UPS Customs & Trade Compliance will provide an update on what should be expected to transition to USMCA.

Register for the webinar here

May 20: Annual U.S. Trade Policy Update

Time: 3:00-3:45PM ET

Welcome back to our second annual trade policy review that investigates government policies impacting trade. We will also evaluate tools and options available to a trader to take advantage of opportunities or alleviate possible negative impacts.

Register for the webinar here

Note: dates subject to change

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