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USTR Approves Small Number Of Extensions of Section 301 Product Exclusions

The U.S. Trade Representative approved extensions of product exclusions from List 1 and List 2 Section 301 tariffs for only 37 product descriptions.  These exclusions were originally set to expire on October 2, 2020.

Specifically, the USTR granted extensions until December 31, 2020, for 9 of 96 products on List 1, and 28 of 113 products on List 2.

The remaining products on Lists 1 and 2 that originally had approved product exemptions are now subject to 25 percent tariffs, effective October 2, 2020.

Source: Federal Register (List 1); Federal Register (List 2)

UK, EU Step Up Efforts To Seal Trade Deal Before Brexit Transition Ends

The UK and European Union have stepped up efforts to negotiate a free trade agreement in the coming weeks in order to ratify a deal by December 31, 2020, which marks the end of the Brexit transition period.

If both sides fail to reach a free trade agreement by the year-end deadline, an estimated one trillion euros worth of trade would default to World Trade Organization rules, which means previously duty-free trade would be subject to quotas and tariffs.

Despite the significant hurdles facing negotiators, German Chancellor Angela Merkel said she was “optimistic” that a deal between the UK and European Union could be reached.

Source: Reuters.com; BBC.com

ISM Report Reveals Slowdown In US Manufacturing

The Institute for Supply Management’s (ISM) latest PMI Manufacturing Index revealed a slowdown in America’s manufacturing sector in September, with the index falling from 56 percent in August to 55.4 percent.

Economists had forecast a 56.3 reading for September.

New orders and production both fell in September, while factory employment numbers continued their downward trend that started in July 2019.

On a positive note, Timothy R. Fiore, chair of the ISM, stated that “[w]hile certain industry sectors are experiencing difficulties that will continue in the near term, the manufacturing community as a whole has learned to conduct business effectively and deal with the variables imposed by the COVID-19 pandemic.”

Source: TheHill.com

China Praises WTO Ruling Over Tariff Dispute With US

The World Trade Organization (WTO) ruled on September 15, 2020 that U.S. tariffs on more than $200 billion worth of Chinese goods violated global trade rules because  the U.S. did not adequately justify its use of the public morals exception provided for under WTO law and the tariffs were not applied consistently.

For its part, China called the ruling “objective and fair,” while the U.S. Trade Representative Robert Lighthizer was critical of the decision.

If the U.S. opts to appeal the ruling, the appeal would essentially exist in limbo, because a previous move by the U.S. to block the appointment of judges to the WTO appeals body has rendered it non-functional.

Source: Reuters.com

Survey Shows US Firms Remain Bullish On China

A survey from the American Chamber of Commerce in Shanghai of more than 200 U.S. companies with operations in China showed that less than 4 percent are reshoring production back to the U.S., despite calls from the Trump administration for firms to “decouple” from China.

More than 70 percent of the firms polled have no plans to relocate any manufacturing out of China.

“American companies still see China’s consumer market as a great opportunity,” said Ker Gibbs, president of the Chamber.

Indeed, geopolitical tensions between the U.S. and China are the number one concern for American companies, according to the survey, and eclipse longstanding issues such as slower economic growth in China, domestic competition and IP protection.

Meanwhile, China’s exports in August were nearly 10 percent higher compared to the same period last year, while the country’s total share of global exports grew to over 17 percent in recent months, compared to less than 14 percent in 2019.

Source: FT.com

US Trade Gap Climbs Higher In August

The U.S. trade deficit in goods and services grew 5.9 percent in August to $67.1 billion as American consumers helped drive imports higher while U.S. exports remained weak.

From January to August this year, the U.S. trade deficit rose 5.7 percent compared to the same period last year, and now stands at $421.8 billion—the highest level in 14 years.

Source: CNBC.com

US Agriculture Interests Urge Congress To Remain In WTO

A group representing 62 of the top agriculture stakeholders in the U.S. called on Congress to remain in the World Trade Organization (WTO) and seek reforms to broaden American farmers’ access to foreign markets.

John Bode, president and CEO of the Corn Refiners Association, stated that, “As long as exports are important to U.S. agriculture, WTO membership will be essential. This is critical to the one-fifth of the U.S. economy that is agriculture related.”

The American Farm Bureau’s President Zippy Duvall noted, “We may not always appreciate WTO delays or decisions, but it is critical for the U.S. to remain engaged with the WTO in a leadership role. Exports are fundamental to the success of U.S. agriculture and the WTO helps create a level playing field for trade.”

AG Daily reports that, under the WTO, U.S. agriculture producers and exporters receive most-favored nation (MFN) treatment in 163 countries, comprising over 80 percent of the global economy.

Source: AGDaily.com

Canada Shelves Free Trade Talks With China

Canada announced it is discontinuing free trade negotiations with China, according to Foreign Affairs Minister Francoise-Philippe Champagne.

“I don’t see the conditions being present now for these discussions to continue at this time,” he said.

Critics are worried that Prime Minister Justin Trudeau has given up too much to China in return for trade concessions.

Meanwhile, the Canadian government is prioritizing efforts to bring Michael Kovrig, a former Canadian diplomat, and Michael Spavor, an entrepreneur, back home from China.

In June, China charged the two Canadians with espionage.  They have been in Chinese custody since December 2018.

Source: Reuters.com; TheGlobeandMail.com

FDA To Host Virtual Meetings On Proposed Rule For High Risk Foods

The U.S. Food and Drug Administration (FDA) is holding three meetings in November and December to provide information and address comments from the trade community over a proposed rule that would mandate additional traceability records for certain high risk foods, according to a notice published on October 2, 2020.

Advanced registration is required for the meetings, which are scheduled for November 6, November 8, and December 2, 2020.  The FDA is accepting comments on the proposed rule until January 21, 2021.

Source: FederalRegister.gov

CBP Expansion Project Underway At Pharr, Texas Border Crossing

U.S. Customs and Border Protection (CBP) launched a $40 million expansion project at the Pharr Port of Entry in Texas that will improve processing of agriculture shipments at the Pharr-Reynosa International Bridge, which facilitates 70 percent of the produce coming to the U.S. from Mexico.

The expansion includes the addition of 24 secondary inspection bays, 13 of which will include cold storage capabilities.

A new 10,000 square foot CBP agriculture inspection and training facility will also be built.

The project is slated for completion in spring 2022.

Source: Freightwaves.com

Trade Shows/ Conferences

Trade Shows/Conferences Location Date
 (Virtual) International Foodservice Distributors Association’s Distribution Solutions Conference https://www.ifdaonline.org/events/distribution-solutions-conference Oct 27 – 29
 (Virtual) Home Delivery World https://www.terrapinn.com/conference/home-delivery-world/index.stm Oct 27 – 30
 (Virtual) Gartner Supply Chain Symposium | Xpo https://www.gartner.com/en/conferences/na/supply-chain-us Nov 3 – 5
 (Virtual) NextGen Supply Chain Conference https://www.nextgensupplychainconference.com Nov 10 – 12
 (Virtual) TIA’s 3PLXTEND https://www.tianet.org/meetings/3plxtend/?gclid=CjwKCAjwq_D7BRADEiwAVMDdHs4hmg0LeHUWuzZi9-uVAuR4OSXyaw0JHkhaN3SdqoHtgzlhABw8-xoCpS4QAvD_BwE Nov 17 – 19

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