After months of negotiation, the US and China have announced that they have come to an agreement on trade. The US will cut the current taxes on $120 billion of Chinese goods from 15% down to 7.5% and has decided to not move forward with adding tariffs to the rest of the $160 billion Chinese goods. This will take effect on December 15, 2019. A 25% tariff rate will continue to stay in place on approximately $250 billion worth of US goods. In return, China has agreed to increase its purchases of US goods and services along with around $40-50 billion in agriculture products.
It’s not uncommon in today’s retail market that large companies who have been around for years are forced to file for bankruptcy. With growing competition from online retailers, including Amazon, stores have continued to see a decrease in foot traffic and overall sales. Retail stores have accrued debt from overstocking and increasing rent prices. If large, well known retailers such as Forever 21, Barneys New York, and Payless can’t beat the online retail presence, what does the future hold for smaller retailers?
Even with the upcoming holiday season, retail sales are projected to decline. According to theUS Commerce Department, retail sales fell in September by 0.3%, the first time since February. Concerns that manufacturing-led weakness and trade tariff challenges are hitting the broader market could potentially have a negative affect on consumers spending habits. If consumers decide to keep their spending to a minimum, retailers should prepare for the potential continuation of declining sales.
President Trump announced that Turkey’s tariff rate for steel products under the Section 232 would be returning to 50% in response to a military invasion from Turkey into Syria. The steel tariffs on Turkish steel was previously increased to 50% in August 2018 and then reduced back to 20% in May 2019.
In addition to the increased steel tariffs, the president advised that the U.S. will cease trade talks with Turkey and will impose additional sanctions. In May, the U.S. terminated Turkey’s participation in the Generalized Systems of Preferences (GSP).
After meeting with Vice Premier Liu He of the People’s Republic of China, President Trump announced in a news release on October 11, 2019 that the duty increase from 25% to 30% on List 1, 2, and 3 products would be suspended. A final decision will be made later regarding the additional duties scheduled to go into effect December 15, 2019 for List 4B commodities.
Information regarding the phase one deal can be found in the White House news release here.
Following a World Trade Organization decision paving the way, the U.S. Trade Representative (“USTR”) has published a list of products form E.U. origin which will be subject to additional duty rates of 10% or 25% ad valorem, effective October 18, 2019.
We expect that a FEDERAL REGISTER notice will be published with the details including confirming the definition of the October 18 effective date; effective dates are commonly based on the date of entry.
As with other tariffs, close coordination with your carrier and EXPRESS representative is needed to avoid duties assessed to shipments arriving before the effective date. EXPRESS Trade Capital, Inc. is available to answer your questions, help assess impact to your business and discuss mitigation strategies. Reach out to us at firstname.lastname@example.org
ETC Managing Director Mark Bienstock was featured in California Apparel News in their discussion of how brands are investing in crucial digital tools and traditional methods to reach customers. Click here to read the full article!
One of the newest sustainability trends is making old
garments new again. Evrnu, a Seattle-based textile-technology startup, is making
old clothes and fabrics into new fibers that can be used for recyclable fashion.
Although their products are still being tested, Evrnu has
just launched a limited run of recyclable unisex sweatshirts for Adidas by
Stella McCartney, calling them “EVER-new.” The hoodies will not be available
for the public until 2020 but will be given to athletes to promote the new
sustainable line. “Right now, in the U.S., consumers dispose of about 80% of
their textiles directly into their garbage can. That’s the behavior we’re
really trying to tackle,” said Stacy Flynn, chief executive and co-founder of
Evrnu. Recycled textiles can be made into premium fibers which can be dyed and
woven into new fabrics made for all different types and styles of clothing. In
2016, Evrnu teamed up with Levi’s Jeans and launched a prototype of jeans made
only from repurposed cotton T-shirts.
Consumers are becoming more aware of certain industries’
toll on the environment, including the fashion industry. Although creating new
fibers still has some detrimental impact, the process uses a fraction of the
amount of energy and chemicals used to make polyester clothing. These recycled garments
may end up having a higher price-point, but as more people become aware of how
sustainability can help the environment, people may be willing to pay more.
ETC takes great pride in working with sustainable and eco-friendly companies. Contact us for all your factoring needs!
As the trade finance industry faces challenges related to
logistics and fraud, blockchain technology may help in creating transparency and
assurance of delivery while still providing confidentiality for trade parties. Blockchain
can support cross border trade transactions that otherwise would be difficult due
to costs and the documentation process.
90% of the world relies on trade finance and the
incorporation of blockchain would speed the delivery of funds and reduce the
usage of paper. The trade finance industry still operates in a very old-fashioned
manner, which entails manual inputting documents and physical letters of credit
to ensure that payments will be received. Blockchain may streamline such manualcomplexity by enabling companies to
securely and digitally confirm where products were originated, its transaction
details, and other requisite information. Indeed, through blockchain, payments
can be processed through a tokenized form depending upon the delivery or
receipt of goods. Focusing on just contracts, parties can create their own
rules that would ensure automatic payments and eliminate the possibility of
missed, or repeated shipments. Incorporating blockchain technology will create greater
trust for trade parties that may well result in an increase in global trade.