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Trump Announces Tariffs on $1.3B of French Imports, More than 200,000 Seafarers Remain Stranded, and CMA CGM Cuts Tampa Route

By July 16, 2020 No Comments

Customs

Trade relations between the U.S. and France have soured this week with the Trump administration announcing 25% tariffs on $1.3B of French goods. The U.S. Trade Representative recommended tariffs after determining that a new French digital services tax discriminated against American companies. Set to go into effect on January 6, 2021, the tariffs will target makeup, soap, handbags, and other popular French imports. 

President Trump has also indicated he is “not interested” in negotiating a Phase Two trade deal with China. He suggested that the decision not to move forward is in part because China should be “held accountable” for the role he believes the country played in the COVID-19 pandemic. Adding to the turmoil, the USMCA has been in effect for just over two weeks now, and Navegate experts have heard of significant confusion from trade lawyers due to unaddressed inconsistencies between this deal and NAFTA. If your team needs help making sense of it all, reach out to the Navegate team.

Ocean 

As port congestion increases, spot rates are expected to go up for tankers. On-the-water crude oil volumes remain high as vessels fight their way through congestion and floating storage that has yet to be unloaded.

Carriers are preparing to make permanent capacity cuts if demand remains at current lows. While they’ve used blanked sailings to mitigate lower demand, permanent cuts could keep costs up and increase predictability in sailing schedules.  

The International Maritime Organization (IMO) is still pleading with nations around the world to help more than 200,000 seafarers who are stuck on their vessels. Because of travel restrictions meant to slow the spread of COVID-19, the seafarers have been stranded on their ships, working months beyond their contracts while their relief teams are stuck in their home countries. So far, the U.S. and 12 other countries have recognized them as essential personnel, enabling them to travel, but the IMO is asking many more to follow suit. 

Trucking 

Domestic trucking capacity continues to tighten this week as an overall uptick in demand is colliding with increased pressure to expedite test kits, medical supplies, and masks as a result of surges in COVID-19 cases and preparations to reopen schools. 

Ports 

As U.S. supply chains shift production out of Chinaports in the U.S. Southeast and along the Gulf Coast are expecting a boost. As a combined result of U.S.-China trade pressures and the start of USMCA, some American companies are expected to shorten supply lines and work toward reshoring parts of their production. 

CMA CGM Group announced that it will no longer operate a direct route between Asia and Port Tampa Bay. Shippers aren’t likely to feel much of an impact, however, as fellow OCEAN alliance member Cosco Shipping will pick up the route instead. 

The Port of Long Beach posted an 11.1% year-over-year decline for the month of June, citing blanked sailings and decreased demand due to the COVID-19 pandemic.