Section 301 tariffs are under legal scrutiny this week. On Tuesday, the World Trade Organization (WTO) ruled that the U.S. broke global trade regulations with the tariffs levied on Chinese goods, asserting “that the United States had not met its burden of demonstrating that the measures are provisionally justified.” While the ruling exacerbates an already-tense relationship between the United States and the WTO, the organization has little power to take any action against the tariffs.
The tariffs are also facing domestic challengers, as a group of U.S. importers has filed a complaint with the Court of International Trade. The lawsuit, which seeks refunds on all Section 301 tariffs paid on lists 3 and 4A, claims that the USTR failed to determine legal basis for the trade action, exceeded legal time limits, and failed to provide adequate time for comments, among other complaints. Importers of products impacted by List 3 or 4A are being urged to also file independent claims by Friday, September 18, 2020.
The office of the U.S. Trade Representative (USTR) announced that it would be dropping the 10% tariffs on Canadian Aluminum imports. Experts warn, however, that tariffs may still be retroactively imposed based on a system of quotas set on import levels.
As demand for Personal Protective Equipment (PPE) levels out, the Food and Drug Administration (FDA) is still struggling to regulate imports. Recent reports of seizures of hundreds of thousands of counterfeit N-95 masks and hazardous sanitization products make it clear that the market for PPE is still largely unpredictable and difficult to regulate.
As trans-Pacific rates hit record highs, Chinese authorities are stepping in. After many carriers enjoyed one of the most profitable second quarters in a decade, the Chinese ministry of transportation and communications is now pushing carriers to add capacity and holding down spot rates.
Forwarders are fighting to secure air capacity for the rest of the year as many anticipate a strained peak season. Many predictions show an ecommerce-heavy fourth quarter, which has many bracing for capacity crunches and potential rate hikes as we approach the holiday season.
Backups at Southern ports aren’t easing as hurricanes and tropical storm season continues to batter Gulf states. This week, major hubs like the Port of New Orleans closed as Hurricane Sally made its way through the area.
China’s container traffic has become a promising indicator of recovery for global supply chains, as container traffic for the first two weeks of September rose 9% over last year.
Trucking capacity grows more and more constrained across the country as cargo that has been slowed suddenly swings into peak season. The current market remains highly unpredictable, with truckers in control over capacity and rates.
HOS emergency rules have been extended through the end of 2020, although demands for essential goods and PPE appear to have leveled out.