In the QAD Precision News Round-Up: 19 November, 2021, Japan and
US to discuss steel and aluminum tariffs; WTO reports slower growth;
EU proposes deforestation law; DHL Express invests in Asia Pacific;
strong retail sales expected; plus five benefits of FTZs and more.
JAPAN AND US TO BEGIN TALKS ON US STEEL, ALUMINUM TARIFFS
On Monday, Japan’s industry ministry announced that Japan and the US
are to begin talks to address additional US tariffs on Japanese steel
and aluminum imports. The Tokyo meeting was between Japan's Industry
Minister Koichi Hagiuda and US Commerce Secretary Gina Raimondo.
Despite this, neither side announced any concrete procedures, nor have
they agreed on a date to start the negotiations.
Earlier in November, Japan asked the US to remove the “Section 232”
tariffs introduced by President Donald Trump’s administration in 2018.
Additionally the US and European Union negotiated an agreement on the
controversial tariffs. The agreement maintains Section 232 tariffs of
25 percent on steel and 10 percent aluminum, while allowing restricted
volumes of EU-produced metals into the US duty-free. For more
information, please see Reuters.
WTO REPORT SHOWS SLOW GROWTH
Newly released data from the World Trade Organization (WTO) shows
supply chain issues are hindering international commerce. The WTO’s
quarterly trade publication indicates slower than expected growth.
This quarter’s index is 99.5, which represents a growth below the
baseline trend. In contrast, August’s report marked the highest growth
pace on record. This October, the WTO forecast 10.8 percent growth in
global merchandise trade for this year, as well as a 4.7 percent rise
in 2022. This is up from its previous forecast 8 percent in March.
Automotive products saw the sharpest fall — from 106.6 to 85.9.
Furthermore, the shortage of semiconductors not only affected
automotive products but electronics as well which fell to 99.6.
Container shipping declined from 110.8 to 100.3 and raw materials
dropped from 104.7 to 100. Conversely, air freight remained above
trend at 106.1. For more details, please click here.
UK BAKER GREGGS HAS VEGAN SAUSAGE ROLL SHORTAGE
The popular UK bakery chain Greggs has announced it is experiencing
supply chain disruptions. Greggs’ vegan sausage rolls, launched in
2019 are unavailable in many locations. Greggs experienced a chicken
shortage earlier this year and previously assured customers its
sausage roll was safe from shortages. Supply chain disruptions are due
to a shortage of truck drivers and factory workers. For more
information, please click here.
STRONG OCTOBER RETAIL SALES EXPECTED
This week, economists polled by Dow Jones forecast that the final
October retail figures will show 1.5 percent growth, compared to the
0.7 percent gain a month earlier. The predicted increase is from peak
season shopping and an increase in gasoline prices. Excluding autos,
sales will grow 1 percent. Barclays chief US economist Michael Gapen
said a strong figure will be an important indicator that the economy
is recovering. Mr. Gapen expects a 1.2 percent gain and predicts the
economy to expand by 5 percent in the fourth quarter. For more
information, please see CNBC.
EU PROPOSES DEFORESTATION LEGISLATION
On Wednesday, the EU executive outlined a proposed law that will
require companies to prove their products are not linked to
deforestation. Some of the products affected include: beef, palm oil,
cocoa, wood, soy, and coffee. However, the proposal does not include
rubber. Environmental activists have claimed that rubber is
responsible for 5m hectares of deforestation in recent years.
This is the first time the EU will regulate products linked to
deforestation. The proposed legislation will require companies to
ensure they are not selling a product that has contributed to
deforestation or forest degradation. To ensure compliance, the EU
proposes monitoring land in countries of origin via satellites and
geolocation tracking. The proposed legislation will not only affect
companies but the bloc’s 450 million consumers as well. For more
information, please see The Guardian.
E-COMMERCE PROMPTS DHL EXPRESS TO INVEST IN ASIA PACIFIC
DHL Express has announced that it is investing approximately €750
million in its ground infrastructure and air network in Asia Pacific
to respond to rising demand in the region. To handle growing
intra-Asia demand and demand between Asia Pacific and the US, the
company has extended its airfreight capacity.
Due to the coronavirus pandemic and related restrictions, e-commerce
growth has accelerated, with Asia Pacific leading the demand. Last
year, online sales comprised half of the retail sales in Asia Pacific.
Furthermore, e-commerce in the region is forecast to grow by 10
percent to 61 percent in 2025. For more information, please click here.
UPS OPENS NEW COLD STORAGE FACILITY
UPS Healthcare is opening a new cold chain and packaging center in
Louisville, Kentucky. This is the company’s first US-based facility to
offer reusable cold-chain packaging. UPS’s temperature-controlled
facilities manage biologics, like the COVID-19 vaccine at its required
temperature. Cold chain is projected to grow 48 percent between 2018
and 2024 for 2 to 8 degrees Celsius storage according to the Biopharma
Cold Chain Sourcebook. For more details, please visit UPS.
QAD Precision News
ELIMINATING AND REDUCING DUTIES WITH FTZS
There are several significant advantages to using a Foreign-Trade
Zone. Perhaps the most compelling reason, for most companies, is the
ability to eliminate or reduce duties. FTZs offer relief from inverted
tariffs, as well as duty deferral, duty elimination, duty exemption on
re-exports and duty-free zone-to-zone transfers. In this QAD Precision
Report, we discuss these five key benefits of FTZs. You can read the
full report here.