Blog/News

If you Import from China

By; Carli Valinoti, Express Trade Capital 

After meeting with President Xi over the weekend, President Trump announced decisions regarding the bilateral trade dispute. The President announced that while current tariffs will remain in place, he will not move forward with additional tariffs as negotiations continue. Therefore, there are no immediate plans to implement Tranche or List 4 trade-remedy tariffs.

The United States Trade Representative recently concluded seven days of hearings on the proposed List 4. The testimony and comments solicited from the public as part of the List 4 review may influence the products to be included and tariff rate if and when any additional trade-remedy actions are taken. But for now, any action on List 4 is on hold.

If you import from China, Express Trade Capital is here to assist with trade strategies to minimize the impact, apply for exemptions, and process refund claims where exemptions have been granted. Click here to contact Express Trade Capital for expertise and support. We are here to help.


IF YOU IMPORT FROM MEXICO

By; Carli Valinoti, Express Trade Capital 

Late Friday night the President announced successful negotiations with Mexico.  With a signed agreement addressing illegal immigration, the President has suspended indefinitely the planned tariffs against Mexico. 

The 5% tariff on goods from Mexico will not go into effect on June 10, 2019.  


Issues Importing from India

Carli Valinoti, Express Trade Capital 

On May 31, 2019, President Trump issued a proclamation announcing the termination of India as a beneficiary developing country. The decision comes as a result of the fact that, according to the President, India has not assured the United States that it will provide equitable and reasonable access to its markets as well as refrain from engaging in unreasonable export practices. 

Among other things, this means that US imports from India entered for consumption or withdrawn from warehouse for consumption, will no longer be eligible for preferential duty treatment under the Generalized System of Preferences as of June 5.

Contact Us to learn how ETC can help you manage your supply chain and any unforeseen costs.


Possible Rising Tariffs at the Mexican Border

Carli Valinoti, Express Trade Capital

President Trump has announced plans to impose 5 percent tariffs on all goods imported from Mexico, rising to as high as 25 percent until – according to the White House – the Mexican government stems the flow of migrants. While most specifics are not yet known – conceptually, tariffs will become effective June 10 and gradually increase by 5 percent each month until they reach 25 percent in October.

What we still don’t know:

  • If the action is to be administered by the date of export
  • If all exports from Mexico to the US are covered including non-Mexican origin goods exported from Mexico and the US goods returned
  • Whether NAFTA benefits for duty and merchandise processing fee will be allowed
  • Whether these tariffs are eligible for drawback, among others

Contact us today to learn about ETC’s trade protection financing options.


Turkey Trade Designation Update

Sadie Keljikian, Express Trade Capital

The President issued Proclamation 9887 on May 16th, entitled To Modify the List of Beneficiary Developing Countries Under the Trade Act of 1974. The proclamation indicates the termination of Turkey’s status as a beneficiary developing country, effective May 17th, 2019. The decision comes as a result of Turkey surpassing minimum economic criteria for the designation.

For US importers, this has a few implications. First, all goods brought in from Turkey are no longer eligible for preferential duties under the Generalized System of Preferences, or GSP. Crystalline silicon photovoltaic (CSVP) cells from Turkey are now subject to safeguards outlined in Proclamation 9693. Additionally, large residential washers coming from Turkey will be subject to stipulations indicated in Proclamation 9694.

Subscribe to our newsletter today to make sure you don’t miss any updates that may affect your business.

Contact us to learn how ETC can help you manage your supply chain and any unforeseen costs.


Trade War with China Rages On

Sadie Keljikian, Express Trade Capital

Per last week’s announcement, the White House has raised existing tariffs on $200B worth of Chinese imports from 10% to 25% and is now threatening new tariffs of up to 25% on an additional $300B worth of Chinese imports as part of its ongoing trade war with China. The latest list targets a wide variety of goods, including apparel, accessories, food and beverage products, and livestock.   

President Trump seems optimistic about reaching an agreement with Chinese President Xi Jinping and downplays the conflict as a “little squabble…because we’ve been treated very unfairly for many, many decades.” The proposed changes will likely take effect in late June or July unless a trade agreement can be reached before then. Importers should begin preparing to either pay the newly raised tariffs or acquire their goods elsewhere.   

Talk to our team today to learn how ETC can help you plan for the increased costs your business will incur due to the new tariffs and how to protect your business during these uncertain times.   


Managing Director Mark Bienstock Talks Trade War with California Apparel News

Business owners who rely on China’s abundant manufacturing facilities and low production costs may be in for a massive challenge. The ongoing trade war the US government has waged with China may not end by March, meaning more potential tariffs that could disrupt the global economy.

ETC’s own Mark Bienstock and other industry experts spoke to California Apparel News this week about strategies to protect yourself and your business from the effects of this ongoing international conflict.

Click here for details on our trade protection financing service.

Contact us for more information.


Changes to GSP Eligibility

Results of a GSP review have just been published as Presidential Proclamation 9813. This announcement lists changes to select products and countries. The GSP status of these identified articles is effective for goods entering on/after November 1, 2018.

If you would like more information or analysis as to how this impacts your company, please contact our logistics department at logistics@expresstradecapital.com.


Back-to-Back Letters of Credit

Sam Permutt, Express Trade Capital

A back-to-back letter of credit (LC) is a common, but often overlooked, form of trade financing.

In a typical back-to-back LC scenario, an intermediary trading company receives an inbound LC from the buyer’s (applicant’s) bank and, using that first LC as collateral, issues a second, outbound LC in favor of the supplier (beneficiary).

Back-to-Back Letter of Credit graphic

Back-to-back LCs are surprisingly simple to coordinate, as both LCs are nearly identical. The only differences between the two LCs in a back-to-back LC model are the credit amount vs. the unit price and the expiry date/period for presentation/latest shipment dates. The unit price is how much the product will cost the final customer, whereas the credit amount accounts for the wholesale costs. The timing of the two LCs must be staggered to allow time for each party to process and transport the shipment.

The additional layer of security that back-to-back LCs provide comes not only from the presence of two separate, albeit nearly identical LCs, but also from the fact that both LCs are available at the intermediary’s bank. This centralized method of monitoring reduces risk and secures all parties involved in the multi-tiered transaction at hand.

Back-to-back LCs therefore help build trust between buyers and sellers of goods around the world, reduce credit risk, and speed up cash flow. They’re beneficial to the intermediary trading company insofar as the company does not need to disclose to its supplier the details of the ultimate buyer of the goods or even the price at which they were sold.


Click to learn more about our letters of credit.

Contact us or subscribe to our newsletter for more information!


Trade War Begins

Sadie Keljikian, Express Trade Capital

President Trump’s promised trade war has begun and it doesn’t look like there will be any winners.

Earlier this year, Trump imposed a series of new import tariffs on goods made outside the US, particularly those made in China. The move has been controversial, largely because each affected country’s respective economy relies heavily on exports. As many economists predicted, however, China, India, the EU and Russia have all fired back.

The president signed the so-called “Trump Tariffs” in March in an attempt to combat “unfair trade practices“ in China and other manufacturing hubs. The newly established tariffs targeted $34 billion in Chinese-produced goods, as well as numerous steel and aluminum goods manufactured abroad.

Shortly after news of the proclamations broke, the EU pledged to place new tariffs on American-made goods in retaliation. Soon after, China announced plans to impose a 25% tariff on US exports, including motor vehicles, soy beans and lobster, which also total at $34 billion in value. Russia followed suit last week and began introducing its own tariffs on US goods, including mining and road building equipment as well as oil/gas industry products. India joined in last week as well, notifying the World Trade Organization that it would raise tariffs on 30 US products including almonds, seafood and chocolate.

Experts continue to debate the precise effects that the trade war will have, but many agree that US traders will struggle to maintain financial stability and accessibility to everyday consumer goods. Although the US is economically stronger than any of the other involved countries, we lack the infrastructure and workforce to supplement the manufacturing resources on which we’ve become dependent in recent decades.

The trade war also drew controversy within the White House and among the Republican party. Several party leaders including House speaker Paul Ryan and former White House economic advisor Gary D. Cohn lobbied against the trade plan. Cohn even resigned shortly after the plan was set in motion, though it is unclear whether he left specifically due to the trade war.

As of now, it is still unclear what the lasting effects of this trade war will be, but sources warn that US consumers and exporters will suffer the most. It may seem counterintuitive, but a combination of the price increases on goods that we continue to import to meet demand and the devastating effect that retaliatory tariffs will likely have on US farmers and manufacturers will probably have a far more detrimental effect than most activity in the ongoing struggle.

Needless to say, it’s difficult to predict precise outcomes this early in the process, but given the buying and manufacturing powers at hand, the international trade industry may change dramatically.


Click to learn about our trade protection financing options.

Contact us for more information.