Carson International is pleased to partner with Miller Thomson LLP for another instalment in our webinar series addressing Canada/U.S. cross-border trade developments and updates.
President Joe Biden’s administration in 2021 will likely take a different approach to global trade than the current administration. We look into the crystal ball to discuss the following global trade issues:
Stability in Canada-US Trade Relations;
Can the softwood lumber issue be resolved;
The new administration’s approach to Canadian oil & gas industry;
Improving global trade and markets; and
Whether the U.S. will join Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
Panelists:
Dave Pentland, Carson International Dan Kiselbach, Miller Thomson LLP
Webinar Details:
A Look At Canada/U.S. Relations Under A New U.S. Administration Tuesday, January 26, 2021 Time: 11:00 a.m. – 12:00 p.m. PST
Webinar connection details will be provided by Miller Thomson before the webinar.
Canada Border Services Agency has released its first round of 2021 Trade Compliance Verifications. Businesses that import goods listed as an audit priority could be subjected to a CBSA trade compliance audit, which could result in potential financial penalties if the verification uncovers instances of non-compliance.
Origin
Bedding and drapery (Round 2)
Harmonized System Number(s): Various goods of Headings 63.01, 63.02 and 63.03. USA origin.
Valuation
Apparel (Round 3)
Harmonized System Number(s): Chapters 61 and 62
Footwear (Round 2)
Harmonized System Number(s): Chapter 64
Tariff
Spent fowl (Round 2) Harmonized System Number(s): Headings 02.07, 16.01 and 16.02
LED lamps Harmonized System Number(s): Heading 85.39
Furniture for non-domestic purposes (Round 3) Harmonized System Number(s): Headings 94.01 and 94.03
Batteries (Round 4) Harmonized System Number(s): Heading 85.06
Footwear ($30 or more per pair) (Round 4) Harmonized System Number(s): Heading 64.03
Articles of apparel and clothing accessories (Round 3) Harmonized System Number(s): Heading 39.26
Parts of lamps (Round 4) Harmonized System Number(s): Heading 94.05
Pasta (Round 3) Harmonized System Number(s): Heading 19.02
Cell phone cases (Round 2) Harmonized System Number(s): Headings 39.26, 42.02 and 85.17
Pickled vegetables (Round 4) Harmonized System Number(s): Heading 20.01
Gloves (Round 2) Harmonized System Number(s): Headings 39.26 and 42.03
Safety headgear (Round 4) Harmonized System Number(s): SubHeading 6506.10
Bags (Round 2) Harmonized System Number(s): Heading 42.02
Import permit numbers (Round 2) Harmonized System Number(s): Chapters 2 and 4
Other mountings and fittings, suitable for furniture (Round 2) Harmonized System Number(s): Heading 83.02
Air heaters and hot air distributors (Round 2) Harmonized System Number(s): Heading 73.22
Flashlights and miners’ safety lamps (Round 2) Harmonized System Number(s): Heading 85.13
Stone table and counter tops (Round 2) Harmonized System Number(s): Heading 94.03
Disposable and protective gloves (Round 4) Harmonized System Number(s): Subheadings 3926.20 and 4015.19
Parts of machines and mechanical appliances Harmonized System Number(s): Heading 84.79
Other chemical products Harmonized System Number(s): Heading 38.24
Clients who import these goods are advised to reach out to their Carson representative, or get in touch using the button below if they have any questions or concerns.
The Canada Border Services Agency is launching investigations to determine whether certain upholstered domestic seating from China and Vietnam is being sold at unfair prices in Canada.
The investigations are the result of a complaint filed by Palliser Furniture Ltd. (Winnipeg, MB) and supported by Elran Furniture Ltd. (Pointe-Clair, QC), Jaymar Furniture Corp. (Terrebonne, QC), EQ3 Ltd. (Winnipeg, MB) and Fornirama Inc. (Montréal, QC).
The complainant alleges that as a result of an increase of the volume of the dumped and subsidized imports from these countries, it has suffered material injury in the form of lost market share, lost sales, price undercutting, price depression, declining financial performance and reduced capacity utilization.
The CBSA and the Canadian International Trade Tribunal each play a role in the investigations. The CITT will begin a preliminary inquiry to determine whether the imports are harming the Canadian producers and will issue a decision by February 19, 2021. Concurrently, the CBSA will investigate whether the imports are being sold in Canada at unfair and/or subsidized prices, and will make preliminary decisions by March 22, 2021.
Currently, there are 125 special import measures in force, covering a wide variety of industrial and consumer products, from steel products to refined sugar. These measures have directly helped to protect the Canadian economy and jobs.
The United States is holding off on imposing tariffs on French cosmetics, handbags and other imports in retaliation for a digital services tax Washington says will harm U.S. tech firms, while it investigates similar taxes elsewhere.
The U.S. Trade Representative’s office said the 25% tariffs on imports of the French goods, which are valued at around $1.3 billion annually and were due to go into effect on Wednesday, would be suspended indefinitely.
Washington had announced the tariffs in July after a U.S. investigation showed a French digital services tax (DST) unfairly singled out U.S. companies such as Google, Facebook, Apple, and Amazon.
France and other countries view digital service taxes as a way to raise revenue from the local operations of big tech companies which they say profit enormously from local markets while making only limited contributions to public coffers.
USTR said suspending the action against France would allow Washington to pursue a coordinated response in 10 investigations into similar taxes in India, Italy, Britain and other countries. It gave no timeframe for further action.
European leaders and industry groups welcomed the news, saying it would allow more time for talks on a global taxation solution to bear fruit.
As Asia-Europe container spot rates continue to skyrocket, shippers and freight forwarders are accusing carriers of breaching short- and long-term contracts to “charge whatever they want”.
In a joint letter to the Competition Directorate of the European Commission (EC), the European Freight Forwarders Association (CLECAT) and European Shippers’ Council (ESC) have protested about the “damage” the carriers’ behaviour is “causing to trade growth at a time of economic recession”.
According to the letter, the complaints relate to “violation of existing contracts, the establishment of unreasonable conditions concerning the acceptance of bookings and unilaterally setting rates far in excess of those agreed in contracts”.
The associations said they would meet with the EC “early in the new year” and “encouraged” it to “take actions similar to those of competent authorities in other parts of the world”.
Chinese regulators are said to be renewing their carrier investigations and, in the U.S., the Federal Maritime Commission has written to liner lobby group the World Shipping Council expressing its concerns that U.S. export cargo is being refused in favour of carriers repositioning containers directly back to Asia to cater for bookings offering considerably higher revenue.
CLECAT and ESC allege that carriers are increasing rates “whenever they see fit, notwithstanding the specific rates and charges agreed”.
They warn that the “adverse consequences of carriers’ practices” are being felt equally by small and big businesses alike in Europe including retail, fashion, automotive, cosmetics and IT businesses, while some with limited financial reserves could be forced to close.
Meanwhile, the North Europe component of the Shanghai Containerized Freight Index (SCFI) closed the year 266% up at $4,286 per teu, some three times higher than 2020 annual contract rates.
It’s not only in Europe that shippers are feeling the pinch – soaring freight rates are a major problem for shippers around the world struggling to maintain supply chains, the SCFI recording massive spikes in spot rates on a weekly basis across transpacific, African, South American, Australasian and intra-Asia trade.
Spot rates from Asia to Santos are currently around 270% higher than a year ago and, for the myriad network of intra-Asia services, rates are an extraordinary 440% higher than this time last year.
U.S. Customs and Border Protection has notified customs brokers and the trade community that most imports of aluminum products will require an aluminum import license for each entry starting January 25, 2021.
The new licensing system, which is available on the Commerce Department website, will open for pre-registration on January 4. Customs brokers, importers, and other license applicants will need to register for an account to create a license.
The list of aluminum products subject to the new licensing requirement is available here. The aluminum import license number obtained from Commerce for each shipment, as well as the License Type Code 28, must be reported on the corresponding entry summary or electronic equivalent in ACE.
CBP recommended the Trade “to plan accordingly and obtain any licenses needed for entry in advance from the Commerce website.”
The new aluminum license system will use the same platform as the steel licensing system (SIMA), so users with an existing steel license account do not need to create new accounts.
Announced earlier this summer, new 25% U.S. tariffs on $1.3 billion worth of French handbags, cosmetics and soaps will take effect this Wednesday, which could prompt the EU to strike back on an equivalent amount of U.S. goods.
United States Trade Representative, Robert Lighthizer, announced the tariffs in July in retaliation for France’s digital services tax, which the Trump administration believes is unfairly aimed at U.S. internet giants like Google, Amazon, Facebook and Apple. But he suspended the tariffs for 180 days to allow time for a negotiated settlement in talks among 137 nations that are being facilitated by the Organization for Economic Cooperation and Development.
Since then, the OECD talks have failed to reach an agreement and France has begun collecting its digital services tax, which USTR estimates will cost U.S. internet companies at least $450 million for their 2020 activities and $500 million for 2021.
The United States believes France struck the first blow in the dispute by imposing the tax. Still, the EU has vowed to strike back if USTR imposes its retaliation this week.
That raises the possibility the U.S. could retaliate against any EU retaliation. It will be the job of President-elect Joe Biden’s administration to resolve the issue, whatever happens in the final 16 days of President Donald Trump’s administration.
American companies will have to pay higher taxes on some of the products they import from China, as tariff exclusions expired at midnight on December 31, 2020.
The U.S. Governmet placed tariffs on more than $360 billion of Chinese goods beginning in 2018, prompting thousands of companies to ask the administration for temporary waivers excluding them from the levies. Companies that met certain requirements were given a pass on paying the taxes, which range from 7.5 to 25%.
The bulk of the exclusions, which could amount to billions in revenue for businesses based in the United States, were set to automatically expire at midnight December 31, 2020. After that, many companies will have to again pay a tax to the government to import a variety of goods from China, including textiles, industrial components, and other assorted products.
Some exclusions have been extend until March 31 for a small category of medical care products, including hand sanitizer, masks and medical devices, to help with the battle against the coronavirus pandemic.
Effective January 1, 2021, the following duty relief programs and temporary measures expired:
According to the Freightos Baltic Daily Index, Asia-West Coast rates rose to an all-time high of $4,189 per FEU this week, up 8% last week.
Rates are now triple what they were one year ago.
Rates also just jumped on the Asia-East Coast route. Spot rates were $5,397 per FEU this Monday, up 9% from last Friday. Rates in this trade lane are now double what they were one year ago.
According to Judah Levine, research lead at the Freightos Group, “Still-surging demand for ocean freight and the resulting global equipment shortage pushed rates up across most of the major ex-Asia lanes this week, after what seemed like a slowing in upward pressure last week.
“Most surprisingly, rates on both trans-Pacific lanes climbed significantly for the first time since mid-September, perhaps signaling that carriers’ tacit agreement with Chinese regulators not to increase prices on these lanes may be coming to an end,” Levine speculated.
It is anticipated that rates will continue to climb into January. After adding surcharges in mid-December, a number of carriers are scheduled to implement general rate increases starting Friday.
The U.K.’s House of Commons voted resoundingly today to approve a trade deal with the European Union, paving the way for an orderly break with the bloc that will finally complete the U.K.’s years-long Brexit journey.
With just a day to spare, lawmakers voted 521-73 in favour of the agreement sealed between the U.K. government and the EU last week.
It will become British law once it passes through the un-elected House of Lords later in the day and gets formal royal assent from Queen Elizabeth.
The U.K. left the EU almost a year ago, but remained within the bloc’s economic embrace during a transition period that ends at midnight Brussels time —- 11 p.m. in London — on Thursday.
The European Parliament also must sign off on the agreement, but is not expected to do so for several weeks.
Just after the EU’s top officials formally signed the hard-won agreement in Brussels, Johnson urged legislators in Britain’s House of Commons to back a deal that he said heralded “a new relationship between Britain and the EU as sovereign equals.”
The agreement, hammered out after more than nine months of tense negotiations and sealed on Christmas Eve, will ensure Britain and the 27-nation EU can continue to trade in goods without tariffs or quotas. That should help protect the 660 billion pounds ($1.15 trillion Cdn) in annual trade between the two sides, and the hundreds of thousands of jobs that rely on it.
