USTR Announces Certain Products Exempt from List 4 Tariffs;
Others to Face Delayed Tariff
 
USTR has issued a notice stating that the additional 10 percent tariff on List 4 imports from China will not be imposed on certain products. Products have been removed from the tariff list based on health, safety, national security and other factors.
Additionally, the tariff will be delayed until December 15^th for products on List 4B. Those products are in the following tariff groups: cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.
For products on list 4A, the tariff will go into effect September 1. USTR also intends to conduct an exclusion process for products subject to the tariff.
 

• USTR List 4A (Effective September 1, 2019)

• USTR List 4B (Effective December 15, 2019)

Extreme Storms Will Affect Vessels To/From Shanghai/Ningbo/Qingdao
 
In early August 2019, dual storms marched across the Western Pacific Ocean. The Visible Infrared Imaging Radiometer Suite (VIIRS) on the Suomi NPP satellite acquired this natural-color image of Typhoon Lekima (left) and Tropical Storm Krosa (right) at about 04:30 Universal Time (1:30 p.m. Japan Standard Time) on August 7, 2019.

Around the time that the image was acquired, Typhoon Lekima had rapidly intensified into a category 2 storm with maximum sustained winds of 90 knots (100 miles/160 kilometers per hour). A few hours later the storm intensified into a category 3 storm and was expected to continue to strengthen as it tracked northwest toward Japan’s southern Ryukyu Islands, Taiwan, and eastern China.

Tropical Storm Krosa, the weaker of the two storms, had maximum sustained winds of 60 knots (70 miles/110 kilometers per hour) around the time of this image. This storm was tracking in a more northerly direction as it slowly strengthened.

NASA Earth Observatory image by Joshua Stevens, using VIIRS data from NASA EOSDIS/LANCE and GIBS/Worldview, and the Suomi National Polar-orbiting Partnership. Text by Kathryn Hansen.

US – China Trade Updates – No Additional Tariffs (for now)
 
 
Trump Revives China Talks With Tariffs Truce, Break for Huawei
Excerpted from finance.yahoo.com
 
The U.S. and China declared a truce in their trade war on Saturday, as Donald Trump said he would hold off imposing an additional $300 billion in tariffs and the world’s two largest economies agreed to resume negotiations.
 
After a high-stakes meeting with Chinese President Xi Jinping, Trump told reporters on Saturday that he also would delay restrictions against Huawei Technologies Co., letting U.S. companies resume sales to China’s largest telecommunications equipment maker. Trump later tweeted that his meeting with Xi was “far better than expected.”
 
Trump outlined the deal at the end of the Group of 20 summit in Osaka, Japan, before heading to Seoul. The White House released no details about the arrangement worked out by the two leaders. The president’s comments may remove an immediate threat from a trade war looming over the global economy even as a lasting peace remains elusive.
 
After Trump and Xi met at the G-20, the two governments plan to restart trade talks that broke down last month. As part of the arrangement, the president said Xi promised to buy “tremendous” amounts of U.S. agricultural products, but Chinese official media reports said only that Trump hopes China will import more American goods as part of the truce.
 
The existing U.S. tariffs on Chinese products will remain unchanged, Trump tweeted on Sunday from Seoul, his next stop for meetings with South Korean President Moon Jae-In.
 
The decision to ease up on tariffs comes less than two weeks after he formally began his 2020 re-election bid, focusing on a strong U.S. economy and his tough stance with the rest of the world. At his June 18 campaign event in Florida, Trump said tough U.S. measures were adding billions to the Treasury and prompting companies to leave China to avoid the fees.
 
 
 
Winners and losers in Trump’s big China trade announcement
Excerpted from washingtonpost.com, by Heather Long
 
President Trump cooled off his trade war with China this weekend, announcing he would hold off imposing more tariffs. Many businesses are cheering the move, which happened Saturday morning in Japan (Friday night in the United States) on the sidelines of the Group of 20 meeting of world leaders..
 
Trump and Chinese President Xi Jinping agreed to keep talking, reviving hopes of a deal soon.
 
Many expected a restart in trade talks, which collapsed two months ago, leading Trump to increase tariffs on the Chinese and pursue sanctions on the Chinese tech behemoth Huawei. But China got almost all of what it wanted from this meeting: Trump agreed to hold off on more tariffs, and he made some concessions regarding Huawei. In exchange, Trump said, Xi agreed to buy more U.S. farm products.
 
It’s too soon to tell whether the fragile truce will hold
 
 
G20 summit: Trump and Xi agree to restart US-China trade talks
Excerpted from bbc.com
 
The US and China have agreed to resume trade talks, easing a long row that has contributed to a global economic slowdown.
 
US President Donald Trump and China’s President Xi Jinping reached agreement at the G20 summit in Japan.
 
Mr Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession.
 
Mr Trump had threatened additional trade sanctions on China.
 
However, after the meeting on the sidelines of the main G20 summit in Osaka, he confirmed that the US would not be adding tariffs on $300bn (£236bn) worth of Chinese imports.
 

A Challenge to Shippers Who Would Never Dream of Controlling the Insurance
 
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protecting your investments by insuring your goods provides peace of mind.

Buying CIF: Who’s really responsible if your product is lost or damaged in transit? According to internationally accepted trade terms, referred to as Incoterms, suppliers selling “CIF” (Cost, Insurance, Freight) are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to EXW, FOB, FCA, CFR or similar terms in order to control the selection, and thereby the quality, of insurance coverage.

How much is that insurance really costing you? Foreign suppliers and their forwarding agents often tack on placement fees to the insurance costs. Those added fees often inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.

Is the coverage your supplier purchased for you adequate? Importers relying on their suppliers to arrange insurance run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask your supplier for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions

What’s the financial health of your supplier’s insurance company? Recent financial and catastrophic events have exposed the vulnerability of insurance companies to sudden economic devastation. Importers are encouraged to make certain their suppliers use insurers with a favorable financial rating supplied by a respected financial rating service. A.M. Best, Standard & Poor’s and Moody’s are among some of the world’s most respected. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).

How will your claim be handled? If insurance is arranged overseas, will you be forced to  deal with an inexperienced, sub-contracted independent adjuster unfamiliar with the assessment of transportation related losses? Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.

Every Shipper Needs Cargo Insurance

Global trading involves risk; however, broad insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance! Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you are depending on the carrier to cover losses, their responsibility is limited by law as follows:

Ocean Carriers           $500 per shipping unit
A shipping unit may be defined as one ocean container.
Air Carriers                  $9.07 per pound
Truckers                      $.50 per pound

The insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative at 617-345-0050 for your free quote.
 
Are you familiar with GENERAL AVERAGE?
2019, year to date, there are a number of notable fire cases, with many resulting in General Average!

• Sincerity Ace – January 2019
• Maersk Honam – March 2018
• Maersk Kensington – March 2018
• Barcelona Ferry Excellent – October 2018
• Hyundai Auto Banner – May 2018
• MOL Prestige – February 2018
• Caribbean Fantasy – June 2018

Yantian Express
Year built 2002, 100,003 dwt

Date of loss: 1/3/19

Part loaded with 4,000 teu
(capacity 7,551 teu.)

198 total loss, 462 damaged required survey

LOF salvage – security 32.5%

GA – security estimate 28%

APL Vancouver
Year built 2013, 115,060 dwt

Date of loss: 1/31/19

Part loaded with
(capacity  9,200 teu.)

947 containers affected

LOF salvage – security 15-20%

GA – security

ER KOBE
Year built 2001, 68,196 dwt

Date of loss: 2/24/19

GA declaration on
March 12, 2019

NO SEPARATE
SALVAGE CLAIM

GA – security estimate 10%

General Average – The Concept
  

• Formulated by the Ancient Greeks to deal with situations where cargo has been jettisoned.

• Basic principle – that which has been sacrificed for the benefit of all shall be made good by the contribution of all.

• Applies to maritime claims only.

• Is declared by the captain when there is imminent danger to the vessel, voyage or crew.

• You are contractually obligated, via the Bill of Lading, for unknown and undetermined costs.

  
How does it work?
  

• Value of the voyage is determined (vessel value plus value of all cargo on the vessel.)

• Participation is determined by the percentage that the value of your cargo bears to the overall value of the voyage.

• The loss amount is determined, and participation percentage is applied to the loss amount to determine security deposit.

• Shipper or their cargo insurer pay twice – first for the initial contribution, then for a bond covering future adjustments to that estimate.

 
Hidden Costs

• The great unknown (is my cargo OK?); delays – finding a port, unloading & sorting; has my shipment missed deadlines?

• LCL Freight – has everyone in my container paid? Freight is not released until all payments received.

  
Difficulties of preventing and extinguishing fires on the open sea, include:
 
 

• Ships are larger with more varied cargo.

• Crew are ill equipped to deal with these fires.

• Fire-fighting tugs are often days or weeks away.

• Prevention is difficult, with rising problems with mis-declared cargo.

• IMDG Code is evolving to impose stricter rules on dangerous goods (DG.)

 
Problems Facing the Industry

• Stricter rules on DG will lead to higher costs and more incentive on the part of shippers to avoid proper declarations

• Ship owners and shipbuilders need to improve fire-fighting capabilities with CO² systems being shown to be inadequate – cost benefit analysis – are potential losses greater than the prevention costs?

• National Cargo Bureau in NY found in 2017 that of 1,721 stowage plans inspected, 20% showed errors with DG

General Average will never go away, so how do we make that less painful?
 
 

• Awareness across all business units that losses & delays are part of any supply chain. Mission-critical shipments need more risk analysis to determine transport mode.

• Understanding of what to do when General Average occurs. This is best led by your cargo insurance provider meeting with your ‘team,’ not just the risk manager or CFO.

When was the last time your insurance provider did this for you?

Do they know how to handle a GA claim?

• Have a contingency plan or at least an understanding of how the event will unfold.

U.S., Mexico Reach Deal to Avoid Tariffs
By Rebecca Ballhaus, Josh Zumbrun and Robbie Whelan, updated June 8, 2019 11:13 a.m. ET, excerpted from WSJ.com
President Trump says Mexico has agreed to take ‘strong measures’ to slow migration over border. President Trump dropped his threat of tariffs on billions of dollars of Mexican imports after negotiators reached a deal on measures to stem the flow of migrants pouring into the U.S. from Mexico, averting a potentially devastating trade fight for both countries.
 
 
Trump: U.S., Mexico Reach Deal To Avoid New Tariffs
June 7, 20198:48 PM ET, excerpted from NPR.org, updated Saturday at 10:30 a.m. ET
 
A day after U.S. and Mexico officials announced an agreement to avert tariffs — set to begin on Monday — affecting billions of dollars in imports from Mexico, President Trump took a victory lap on Twitter.
 
I would like to thank the President of Mexico, Andres Manuel Lopez Obrador, and his foreign minister, Marcelo Ebrard, together with all of the many representatives of both the United States and Mexico, for working so long and hard to get our agreement on immigration completed!
 
— Donald J. Trump (@realDonaldTrump) June 8, 2019
Under a joint agreement released by State Department officials, Mexico will assist the United States in curbing migration across the border by deploying its national guard troops through the country, especially its southern border.

 

BCMEA – ILWU-Canada Tentative Agreement Reached

Turkey Eliminated from Generalized System of Preferences (GSP)
 
The Federal Register has published the official notification that the designation of Turkey as a beneficiary developing country is terminated, effective May 17, 2019.
Please see the link, below, and the attached PDF for the full language.
 
The BOC Blast 314 5-21-2019 Turkey Terminated from Generalized System of Preferences – GSP Federal Register PDF
 
https://www.federalregister.gov/documents/2019/05/21/2019-10761/to-modify-the-list-of-beneficiary-developing-countries-under-the-trade-act-of-1974
 

List 4 Proposed Tariffs Published
 
On May 13, 2019 the USTR proposed a 25% tariff on a fourth listing of products. This listing, estimated at $300 billion in trade value, will cover almost all remaining import products from China including textiles, shoes, and many of the “other” classifications that had not been included previously.
 
The due date for written comments is June 17th, with public hearings scheduled for the same day. There is no proposed effective date for the new tariffs in the publication.
 
Please go to the following link for full Office of the US Trade Rep posting:
https://ustr.gov/sites/default/files/enforcement/301Investigations/May_2019_Proposed_Modification.pdf