Effective January 13, 2021, the CBP has issued a Withhold Release Order (WRO) that all U.S. ports of entry, U.S. Customs and Border Protection (CBP) will detain cotton products and tomato products produced in China’s Xinjian Uygur Autonomous Region. The WRO will detain the following products from China’s Xinjian Uygur: Apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes.
The CBP will begin detaining shipments that “exploit forced labor laws at any point in their supply chain, including the production or harvesting of the raw material”. The agency identified the following forced labor indicators through the course of its investigation: debt bondage, restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive living and working conditions.
COVID-19 has disrupted nearly every part of our lives. Yes, the public health consequences are tragic. But along with this, small and large businesses alike are feeling significant economic pain. Companies in the consumer goods industry are encounteringsignificant supply chain challenges and quickly shifting consumer spending habits. The retail and the apparelapparel industry in particular are facing their own share of supply chain challenges. The list goes on and on.
During times of such economic upheaval and uncertainty, normalcy disappears, once reliable customersstart canceling orders and ask for extended payment terms. Stores suddenly closeand it’s unclear whether they will ever open again. Shipping delays become more common and trading partners less flexible.
In this climate, all businesses need to reduce their risk to survive this economic storm. One way to do this is to leverage financial instruments like letters of credit (LCs), which can help achieve the highest risk-adjusted returns.
How Letters of Credit Can Benefit Your Business
Letters of credit offer businesses substantial advantages that are amplified by the uncertainty caused by COVID-19.
Supply chain risks and cancelled orders are a greater risk in this global pandemic, so letters of credit can give you more confidence that you’ll actually get paid.
Most prominently, letters of credit minimize risk for both buyers and sellers. Buyers are that their goods are shipped and documentation is in order before submitting payment. Sellers get the confidence they need to ship goods to their buyers.
Letters of credit are also helpful because they free up capital for both buyers and sellers. By using an LC, buyers do not need to leave deposits to start production. Instead, the LC is opened for the transaction’s full value, letting buyers more efficiently allocate their capital. Suppliers can then borrow against their letter of credit, which can provide them with more liquidity before the transaction closes. It is a win-win for both buyers and suppliers.
Buyers and sellers may be transacting with new parties or others they may not fully trust, letters of credit can include provisions that must be satisfied before the transaction is completed. This can include everything from inspection of the delivered goods to specific delivery times. These provisions can ensure that your goods arrive in the precise manner that you expect – if they don’t, you have the option to reject the goods without payment or to seek a discount for the suppliers errors-
Helping Business Go Forward
It’s unclear when the COVID-19 crisis will end. In the meantime, business has become inherently riskier. There’s a greater chance that your suppliers and customers won’t pay for your goods and services. Because of this, letters of credit can help you continue business as usual while minimizing risk and preserving cash flow. For these reasons, we encourage you to leverage LCs when possible throughout this global pandemic.
AtExpress Trade Capital, we are happy to help you leverage all the thebenefits of letters of credit. anks require you to jump through several hoops (like collateral requirements or a prior credit relationship with the bank) to obtain a letter of credit. At Express Trade Capital, we have removed these restrictions by allowing clients to use our already existing LC facilities with out banks, thereby allowing you to quickly obtain LCs for your specific business needs without onboarding to a bank.
To learn more about how we can help you, don’t hesitate to click here.
In response to the difficulties facing American businesses due to the COVID-19 pandemic and associated control measures, Customs and Border Protection is contemplating granting relief to importers. In consideration of requests from the National Customs Brokers and Forwarders Association Customs Committee, chaired by GEODIS’ SVP of Trade Services and Government Relations Mary Jo Muoio, along with other industry group requests, CBP is looking at ways to provide flexibility to and extensions for a wide variety of deadlines importers face with customs obligations.
Specifically, CBP is considering granting a ninety-day extension of duty payments. At this time CBP is working to understand authorities and mechanisms which may allow this and specifics are not available. In the meantime, CBP is reviewing extraordinary requests on a case-by-case basis. As of today, lacking specific individual permissions, duty and related obligations remain in place. We expect more information in the near future and will alert our clients as soon as known. If you would like to seek temporary duty-payment relief from CBP, please contact us immediately. Initially, this relief would be for importers having duty payments due in the next week; if broader CBP issued extensions are not granted, we will pursue additional case-by-case requests.
If you have questions about your duty payments, bond obligations or challenges meeting other CBP commitments, contact your account representative at Express Trade Capital, Inc.
China officials have extended the Spring Festival Holiday until after February 2. The length of the extensions may vary depending on the location. Shanghai has extended until February 10, while others until February 14 or longer. As factories re-open, labor continues to be minimal as public transportation in certain cities or provinces are still under restriction and quarantine. These can last up to an additional 14 days or longer. Trucking equipment and services as well are still impacted due to the lack of labor as well as road restrictions preventing normal pickup and delivery services.
Flights: Over 60 airlines have announced cancellation from flights to/from
Flights: Freighter flights are slowly returning as demand continues to
increase. As of now, 60% of freighter flights are still not operating.
Airfreight Pricing: Due do the current supply & demand, transit is continued to be limited under a Force Majeure environment based on first come basis.
airports that are impacted are PVG & CGO with limited amount of staff. WUH
is closed until further notice and those operating under normal conditions
include, BJS, SZX, HKG, LAX, ORD, JFK, AMS, & FRA.
All Seaports are operating under normal conditions, excluding Wuhan & Yichang a Hunan province. Ocean demand has dropped by more than half and is not expected to pick up again until after February 20.
Please contact our logistics office with any further questions email@example.com.
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!