China’s commerce minister appealed to Washington for “joint efforts” to revive trade but gave no indication Wednesday when tariff war talks might resume or whether Beijing might offer concessions.
“Co-operation is the only correct choice,” Wang Wentao said at a news conference.
President Joe Biden has yet to announce a strategy for dealing with Beijing but is widely expected to renew pressure on trade and technology complaints that prompted his predecessor, Donald Trump, to raise taxes on Chinese imports.
Washington and Beijing have raised tariffs on billions of dollars of each other’s goods, disrupting global trade. They agreed last January to postpone further penalties but most taxes already imposed stayed in place.
Beijing agreed to narrow its trade surplus with the United States by purchasing more American soybeans and other exports. It fell short of the targets set due to the pandemic, and bought about 55% of the promised goods.
China’s foreign trade situation is “severe and complicated,” Wang said. He said Beijing is launching e-commerce and other initiatives to encourage sales. One focus will be markets in its “Belt and Road Initiative” to build ports, railways and other trade-related infrastructure.
A three-judge Court of International Trade panel will oversee all cases tackling the legality of lists 3 and 4 Section 301 China tariffs as they pertain to U.S. customs.
Judges Mark Barnett, Claire Kelly and Jennifer Choe-Groves—the three most senior active judges on the court—were assigned to hear one of the largest mass filings in the court’s history.
With their appointment, there is optimism that adjudication will now begin on this important issue. The order came more than 18 weeks since Akin Gump’s motion for the three-judge panel.
The challenge began in September 2020 when HMTX filed a lawsuit over lists 3 and 4A Section 301 tariffs on China. That suit was then followed by thousands of copycat suits. Jasco Products was later added as party to the HMTX lawsuit. HMTX and Jasco are listed as the representative parties for the whole of the Section 301 litigation and are represented by Akin Gump, which devised the legal theory for the case. “We are pleased to see that our case has been assigned to a three-judge panel, as we requested,” said Matthew Nicely, Akin Gump lead attorney for the HMTX case. “We look forward to working with the court and the other parties to establish a briefing schedule and a mechanism for addressing the large number of related cases that were filed following our HMTX/Jasco complaint.”
The court hasn’t said whether it will use the HMTX suit as a test case for the entire litigation. All the various lawsuits argue that the Office of the U.S. Trade Representative overstepped its Section 301 author ity by imposing the lists 3 and 4A tariffs as retaliatory duties against the Chinese and violated the Administrative Procedure Act by conducting tariff rulemakings that lacked transparency.
Shippers are beginning to make alternative routing arrangements in the event of a renewed strike at the port of Montreal, as industry groups are warning that a new round of industrial action would seriously hurt supply chains and the Canadian economy.
Stakeholders are worried that a strike at the port could come next month, when a truce between Maritime Employers Association and the Canadian Union of Public Employees, representing longshoremen, is due to expire.
On 16 February, the union informed its members that contract negotiations were suspended, and moved ahead with preparations for a vote on a 60-day strike mandate “as a preventative measure in case working conditions aren’t respected”.
The two sides have been at odds since the labour contract at the port expired at the end of 2018, and last summer the confrontation escalated into industrial action that paralyzed most of the port’s operations, causing severe disruption to supply chains that took two months to sort out.
The union mounted two four-day strikes, followed by an indefinite strike that lasted 12 days into late August when both sides agreed a truce.
On February 19, CIFFA addressed the Prime Minister of Canada in a letter expressing alarm concerning the deteriorating situation in labour relations at the Port of Montreal.
The Canadian International Freight Forwarders Association (CIFFA) warned it would pose a serious threat to Montreal, Quebec and the overall Canadian economy.
“We have still not fully recovered from the strike in the port last August, which according to Statistics Canada cost wholesalers C$600m (US$475m) in sales,” said CIFFA executive director Bruce Rodgers. “Another interruption will really stick a knife in the Canadian economy.”
None of the federal government’s recently announced new travel measures — which include COVID-19 testing upon arrival — apply to the largest group of people regularly entering Canada: Commercial truck drivers.
Of the 10 million entries into Canada since March 21, 2020, close to half — 4.6 million — were made by commercial truck drivers crossing by land, according to the CBSA.
Because truck drivers deliver essential goods across the border during the pandemic, the government has exempted them from quarantine and all COVID-19 test requirements. Ottawa says it’s exploring tests for truckers at the border but has not yet presented concrete plans.
Even though truck drivers are exempt from quarantine, they must follow other protective measures such as wearing masks, social distancing and answering health questions at the border.
Many Canadian truck drivers feel unsafe and want more protections, as highly contagious COVID-19 variants spread rapidly in the U.S.
Public Safety Minister Bill Blair said the government is also exploring the introduction of COVID-19 tests for essential workers crossing the border.
Teamsters Canada — which represents more than 15,000 long-haul truck drivers — is recommending that the government test truckers at truck stops and rest areas. It also wants truck drivers given top priority for COVID-19 vaccinations.
Recently, shipping containers have become hard to come by. Business who need them to transport goods across the globe are paying an all-time high for them. Normally, this is a good problem, a sign of a searing economy that needs to create a bit more capacity to grow. Shortages in the context of a COVID-constrained economy are harder to grasp.
What is going on, and how are Canadian exporters affected?
Economic conditions were tight just as COVID-19 hit. Unemployment rates were at cyclical lows, income growth was strong, and it looked as though we were finally experiencing the kind of robust conditions that had eluded us since the global financial and economic crisis of 2008. And with all the economic heat, there was no container crisis. Oh, lease rates did rise, but nothing like what we’re seeing now.
The pandemic saw lease rates plunge close to cyclical lows, but the move was momentary: rates were on the rise almost immediately, and they haven’t stopped. The HARPEX index of contained shipping costs is now more than double the pre-pandemic average rate, and every size-class of container ship is affected. In a world still worried about the true state of final demand, upstream price increases like this are a worry of a different kind, as they’re eating into already-thin margins.
The timing of recovery sheds light on the problem. China was the first to be hit with the pandemic and is arguably the most successful in conquering it. China’s merchandise exports were pummelled in February 2020 and recovered fully in the following two months. Everybody else saw their exports suffer in March and April, and it wasn’t until June that levels were nearly back to the pre-pandemic marker. China’s jumpstart pushed full containers to ports everywhere, but the lack of return business stranded empties all over the place.
Nigeria’s Ngozi Okonjo-Iweala was appointed Monday to head the World Trade Organization, becoming the first woman and first African to take on the role, amid disagreement over how the body decides cases involving billions in sales and thousands of jobs.
Okonjo-Iweala, 66, was named director-general of the World Trade Organization, which deals with the rules of trade between nations, by representatives of the 164 member countries.
She said in a statement that her first priority would be quickly addressing the economic and health consequences of the COVID-19 pandemic and to “implement the policy responses we need to get the global economy going again.”
The appointment came after U.S. President Joe Biden endorsed her candidacy, which had been blocked by former president Donald Trump.
Biden’s move was a step toward his aim of supporting more cooperative approaches to international problems after Trump’s “America first” approach that launched multiple trade disputes.
But unblocking the appointment is only the start in dealing with trade disputes launched by Trump and in resolving concerns the United States has about the WTO that date to the Obama administration. The U.S. had blocked the appointment of new judges to the WTO’s appellate body, essentially freezing its ability to resolve extended and complex trade disputes.
Okonjo-Iweala is the first African official and the first woman to hold the job.
She has been Nigeria’s finance minister and, briefly, foreign minister, and has had a 25-year career at the World Bank as an advocate for economic growth and development in poorer countries. She rose to the No. 2 position of managing director, where she oversaw $81 billion US in development financing in Africa, South Asia, Europe and Central Asia.
Blueberry growers in British Columbia are eager to learn the outcome of a U.S. International Trade Commission decision this week on the question of whether American blueberry producers have been harmed by imports from countries like Canada.
Since September, the threat of tariffs or quotas on the majority of the province’s blueberry exports has loomed. On Thursday, the USITC will vote to either proceed with determining what those will be, or determine there has not been harm from imported blueberries and the issue will go away.
The National Farmers Union claims that between 2015 and 2019, growers’ operating returns fell by 32.4%. The statement names Canada, along with Mexico, Peru, Chile and Argentina as countries responsible for the increased imports to the U.S.
But according to Anju Gill, the executive director for the B.C. Blueberry Council, that surge isn’t coming from British Columbia, which grows about 95% of Canada’s highbush blueberries. There’s a wild blueberry industry based in Eastern Canada.
Gill added that B.C. and the U.S. share a very close relationship when it comes to blueberries, with an even and reciprocal amount of berries crossing the border in both directions most years.
The USITC process is what’s known as a Section 201 Global Safeguard investigation. Unlike World Trade Organization disputes, it’s undertaken by an agency within the U.S. government and it doesn’t look into conditions like subsidies that make international trade unfair — just whether a U.S. industry is suffering as a result of imports
Due to the extreme cold from the Prairie operating region (Alberta, Saskatchewan, Manitoba) to Northern Ontario, North Dakota and Minnesota, Canadian Pacific has enacted its winter operating plan and train-length restrictions.
Customers may expect near-term delays of up to 48 hours. CP is encouraging customers to plan ahead and account for extended timelines, as the cold weather is expected to continue throughout this week.
U.S. containerized imports are expected to set new monthly records from now into the summer as the country’s economy continues to recover from the pandemic, according to retail experts.
The National Retail Federation project record volumes for each of the first six months of the year, January through June, while the first half of 2021 as a whole is forecast at 11.5m teu, up 22.1% from the same period in 2020.
The import numbers reflect retailers’ expectations for consumer demand to the point that many factories in Asia that normally close for Chinese New Year this month are choosing to remain open to keep up with demand.
Record holiday season and numbers for 2020 demonstrate consumer optimism, with a surge in purchasing that has been sustaining for months, so that retailers are importing merchandise faster than ever.
February is historically the slowest month of the year for imports, both because of the lull between the holiday season and spring and because factories in Asia close for the Chinese New Year holiday.
But this February is forecast at 1.91m teu, up 26.3% year on year, with 25-30 container ships waiting to berth at the ports of Los Angeles and Long Beach and with many Asian factories remaining open during the holiday to meet demand.
March is forecast at 1.93m teu, up an “unprecedented” 41% from March 2020, while April is forecast at 1.82m teu, up 13.3% year on year; May at 1.9m teu, up 23.8%, and June also at 1.9m teu, up 18.2%.
Retail sales during the November-December holiday season in 2020 hit a record $789.4bn, up 8.3% from 2019, and preliminary figures show retail sales for all of 2020 were up 6.8% year-over-year.
Montreal’s airport authority, ADM Aeroports de Montreal, is increasing fees in an attempt to stay financially afloat during the pandemic.
ADM Aeroports de Montreal is the airport authority for the Greater Montreal area responsible for the management, operation and development of YUL Montreal-Trudeau International Airport, and YMX International Aerocity of Mirabel.
Effective April 1, 2021, the airport is increasing landing fees for all-cargo flights. An airport improvement fee (AIF) equivalent fee of $10 per seat will also be charged for all non-terminal flights and general aviation at YUL, effective on the same date.
ADM has introduced an increase in airport improvement fees (AIF) charged to departing passengers from YUL, similar to other Canadian airport authorities. The AIF, used exclusively to fund infrastructure projects essential to maintaining safe operations at YUL, was increased from $30 to $35 on February 1.
“Although a major budget rationalization exercise has reduced ADM’s operating expenses and capital budget for the coming years to a strict minimum, it is clear that stronger measures were needed to provide us with the flexibility to continue operating our airport sites. ADM is at a crossroads, although we still believe in the resilience of our industry. While these rate increases will help us, they are far from sufficient. When the time comes, we will have to train the hundreds of employees we had to let go at the beginning of the crisis to ensure adequate service when the recovery comes.”
– Philippe Rainville, President and CEO of ADM Aéroports de Montréal.
For 2020, the not-for-profit ADM estimates it will have a shortfall of $300 million. It says new restrictions, the emergence of variants of Covid-19, and the extended border closure will continue to put significant pressure on its financial performance in 2021.