As you may have heard on the media over the weekend, President Trump and Chinese President Xi reached an agreement at the G20 summit in Buenos Aires that resulted in the temporary suspension of the additional 15% duty on Chinese products imported into the US, that was set to go in effect on January 1st, 2019.
The “Section 301” ruling was released back in September, as part of the US’ continuing response to China’s abuse of intellectual property and forced transfer of American technology. This rule included the immediate assessment of an additional 10% duty on some 6000 items (List #3), including all food products that we import from China. According to this rule the 10% duty was to increase to 25% with respect to products entered into the US after January 1, 2019.
However, China has just agreed to start purchasing agricultural products from US farmers immediately and to also buy substantial amount of energy, industrial and other product from the US to reduce the trade imbalance between our countries. They have also agreed to begin negotiations “on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture”, according to the joint statement of the two countries. “Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If, at the end of this period of time the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%”, the announcement said.
Writing a blog can be a challenge! We want to keep our trade up to date on the products we import (from over 25 countries) and we want our information to be meaningful to you. Keep in mind that we are always looking ahead at least 3 months, as that is about the minimum lead time to receive a shipment. Our supply chain is greatly affected by worldwide holidays such at the Chinese New Year (this year beginning February 8), the Southeast Asian New Year (or Water Festival in early April), summer holidays/factory closures in Europe, and Ramadan (the month long celebration in the Islamic calendar).
Our objective is to have all of our products in stock at all of our 8 USA distribution centers, 52 weeks per year, while combating all of the above factors. We believe we accomplish this quite efficiently! Thanks for reading this blog and stay tuned for more market information in the coming weeks/months.
This bi-annual trade show is not only the largest food and beverage fair in the world; it’s also the sector’s most important fair for both the retail and Foodservice sector. This year almost 6,600 exhibitors from 100 countries occupied over 3 million square feet space in 11 exhibition halls, some of which have 3 levels. Over 155,000 trade visitors from 180 countries attended the show. Both exhibitors and show goers agree that this is the place to be for food manufacturers, exporters and importers alike. The mood was “cautiously optimistic”, somewhat better than in 2009, however, most attendants were still concerned about the worldwide economic situation.
Thailand has been facing the worst flooding in some 50 years. Heavy monsoon rains have been causing flooding in Thailand since July but they had been mostly affecting the northern areas of the country. Unfortunately during the past couple of weeks the floodwaters have reached Bangkok, the capital, which has over 8 million residents. Up to recently the Prime Minister and the Bangkok Mayor were optimistic that they would be able to divert the floodwaters from the center of the city but last week the painful announcement was made: they are no longer able to protect the city. Authorities fear that the Chao Phraya river that runs through the city, could burst its banks when water levels rise because of unusually high tides over the coming weekend. Residents have been advised to evacuate the threatened city as shortages are expected in the food supply and blackouts may occur. The government declared a five-day holiday, Thursday until Monday, in Bangkok and 20 provinces hit by flooding to help residents deal with this terrible situation.
Many agricultural factories that are south and east of Bangkok have been fine so far, however, there are serious disruptions in the supply chain. Trucks are not able to travel through flood-ridden areas, canneries are unable to get tins or packaging materials as some of these factories had to close down. Workers can’t get to offices and factories, roads are jammed with cars and trucks carrying fleeing residents. The main concern at the moment is that the pineapple plantations, located mostly in the south, will be entirely ruined if the floods reach them. Major shipping companies are directing clients away from certain Bangkok piers that are difficult to access, thus making export and import shipments more expensive. The Thai government is so concerned about the extent of damages on the country’s economy that they have already reduced the projected yearly growth figures.