• ISCM Announces FTZ Administrator Training
  • Log in / Log out
international supply chain management companyinternational supply chain management companyinternational supply chain management companyinternational supply chain management company
  • HOME
  • SERVICES
    • Foreign-Trade Zones
    • Audit Preparation
    • Compliance Tech Implementation
  • ABOUT ISCM
  • CONTACT
  • NEWSLETTER
  • COMPLIANCE UNIVERSITY
0

$0.00

✕
FTZ’ine July 2022
June 30, 2022
FTZ’ine September 2022
September 1, 2022

FTZ’ine August 2022

The Race To Recess

The Senate goes on summer vacation beginning this coming Monday, August 8th, until Labor Day. They have been trying to get all their work done before then, and have actually had some surprising successes. No Toto, there is still no federal budget, but Congress did agree on an incentive plan to try and bring supply chains for critical materials such as semiconductor chips back to the United States. The Senate is also working to pass a separate spending plan to address climate change, health care, and inflation.

The U.S. economy shrank for the second consecutive quarter. That is the normal definition of a recession, but with the job market still so hot most economists are not ready to use that term yet.

The Uyghur Forced Labor Prevention Act (UFLPA) continues to be less comprehensive than originally advertised, but needs to remain on the radar of importers. Keep looking for your Xinjiang exposure.

Concern for a global food shortage eased when Russia and Ukraine reached a deal to export 20 million tons of grain trapped by the war. Those fears promptly rekindled when Russia bombarded the main Ukrainian port of Odessa within 24 hours of making the deal. One ship has made it through securely so far, with at least 16 more tensely waiting for clearance to safely load.

Down

Top Story: The Odd Bird Economy

U.S. Gross Domestic Product (GDP) fell 0.9% on an annualized basis in the second quarter of this year, contracting for the second quarter in a row and indicating the U.S. may be in a recession.

Economists had expected GDP to rise 0.3 percent in the second quarter after a drop in the first quarter. The traditional definition of a recession is two consecutive quarters of GDP contraction.

At the same time, though, the stock market is up 10% from its June low, job growth has averaged over 450,000 per month, and unemployment remains historically low. In fact, many employers continue to experience labor shortages (air travel anyone)? This second group of economic indicators pushed the Fed to raise interest rates another 0.75% in July to cool the economy. Rate increases stimulate strength in the U.S. dollar, which hurts exporters but helps importers.

The report on second-quarter GDP activity, which will be revised at least twice, was driven mostly by a decline in inventory levels. Overstocked businesses made lower investments in inventory as consumers pulled back on some types of purchases.

"The general takeaway is the economy is slowing, and that's what the [Federal Reserve] wants," said Ryan Sweet, who leads real-time economics at Moody's Analytics. "We're not in a recession."

The GDP drop was a big reversal from the 6.7% expansion the economy underwent in the second quarter of 2021. The United States is not the only economy having difficulty shaking off the effects of recession. China’s economy also contracted in the three months ending in June compared with the previous quarter after Shanghai and other cities shut down to fight coronavirus outbreaks.

The world’s second-largest economy shrank by 2.6%, down from the January-March period’s already weak 1.4%, officials said.

Virus controls shut down the world’s busiest port, Shanghai, in March, fueling concerns global trade and manufacturing might be disrupted. Millions of families were confined to their homes, depressing consumer spending.

Tech Tip: Good News for e214 Filers - ACE House Bill Release Delayed!

Last month, we told you about  CSMS #52209523 - Updated Draft FTZ CATAIR chapter which contained links to a draft CATAIR for updates to the e214 to include house bill release functionality.  At the time, while there was no date set for this new e214 functionality to be ready for testing. It was expected to go into production in August 2022, only 2 months after being published in draft form.

There were a lot of questions raised by the draft CATAIR about new concurrence functionality and many FTZ operators realized they needed to readdress interfaces with brokers and forwarders to capture the House Bill that was not previously included in these data exchanges.

On July 18, 2022, with no CSMS message announcing the update, CBP posted a new ACE Development and Deployment Schedule.  In this version, found here, the release date for all House Bill Release functionality is now listed as Winter 2022, instead of August 2022.

Those questions related to concurrence still remain unanswered, but CBP has said an FAQ about House Bill Release is being created and will be published soon. In the meantime, if you are not receiving house bill information for your ocean receipts on your paperwork, you want to start preparing now to make sure you have it when this becomes mandatory. And if you have electronic interfaces to receive manifest information, double check that house bill of lading is included for all ocean shipments.

As you are preparing, if you have questions or comments on the idea of house bill release, please send them to our Sr. Vice President and Chair of the National Association of Foreign-Trade Zones, Melissa Irmen at Melissa.Irmen@iscm.co.

CBP
FTZ’ine August 2022

Congress Moves On Not One, But Two Major Spending Bills

Hot on the heels of passing the expansive $280 billion CHIPS and Science Act aimed at building up America’s technology edge, West Virginia Sen. Joe Manchin struck a deal on a major spending package with Senate Majority Leader Chuck Schumer to address health care and climate change.

The new 725-page bill, called the “Inflation Reduction Act of 2022,” would invest approximately $300 billion in deficit reduction and $369.75 billion in energy security and climate change programs over the next decade.

The package aims to curb U.S. carbon emissions by almost 40% by 2030.

The proposal would expand health care subsidies, allow Medicare to negotiate on prescription drugs, and be paid for by raising taxes on corporations and eliminating certain deductions.

The pandemic may play a role in getting the legislation passed this week. There is no proxy voting in the Senate, as there is in the House, and Senator Manchin and Senate Majority Whip Dick Durbin are currently isolating as they recover from COVID-19. Even one missing vote would doom passage of the bill.

Included are incentives for Americans to invest in clean energy, with tax incentives for home energy efficiency improvements. There are also tax credits for individuals who buy electric vehicles.

The bill would continue pandemic-era expansions to Affordable Care Act subsidies through 2025 and allow Medicare to negotiate with drug companies to lower drug costs, which has long been a Democratic goal. Under the bill, drug manufacturers would be penalized for raising prices faster than inflation.

The Inflation Reduction Act would be paid for by implementing a 15% corporate minimum tax as well as collecting more through IRS tax enforcement, Democrats said. The legislation includes billions of dollars for taxpayer services, enforcement and modernization of the agency.

The provision deals with the so-called "carried interest" loophole allowing hedge fund managers and private equity executives to pay lower tax rates on investments. Democrats want to ramp up the tax to bring in an additional $14 billion.

The House is already out for its annual month-long August recess, but could return if the Senate passes its legislation.

The Senate had already passed the $280 billion CHIPS and Science Act aimed at building up America’s manufacturing and technological edge to counter China by an overwhelming bipartisan vote.

The CHIPS and Science Act provides $52 billion in subsidies and additional tax credits to companies that manufacture chips in the United States. It also adds $200 billion for scientific research, especially into artificial intelligence, robotics, quantum computing and other technologies.

The subsidies for chip companies are expected to produce, in the short term, tens of thousands of jobs, with manufacturers pledging to build new factories or expand existing plants in Ohio, Texas, Arizona, Idaho and New York.

The bill calls for pouring $10 billion into the Department of Commerce to create 20 “regional technology hubs” across the country.

The legislation stipulates that chip manufacturers that take the federal funds and tax subsidies provided by the legislation cannot expand existing factories or build new ones in unfriendly countries. The Department of Commerce would claw back the funds provided by the bill if companies do not abide by those restrictions, senators said.

LA May Be The LAST To Strike

On July 26th the ILWU and PMA announced they had reached an agreement on the health care provisions of a new contract.

The International Longshore and Warehouse Union (ILWU), representing longshore workers, and ocean carriers represented by the Pacific Maritime Association (PMA) issued a joint statement, even though there are several more delicate issues to work out before a complete deal is done.

However, the sides in the closely-watched negotiation were able to report progress last month, whereas other areas of international trade are rife with labor disruption.

Some 40,000 railway workers in the United Kingdom staged a demonstrative walkout over pay, job security and working conditions as the country battles its worst cost of living crisis in decades.

The nationwide 24-hour strike brought the rail network to a virtual standstill, with only one in five trains running.

Here in the U.S., a convoy of truckers blocked roads serving the Port of Oakland.

The independent dray owners and operators were demonstrating in opposition to Assembly Bill 5, a law passed in 2019 that requires gig workers in several industries to be classified as employees with benefits, including minimum wage and overtime pay.

Then President Biden had to block a freight railroad strike for at least 60 days by naming a board of arbitrators to intervene in a contract dispute between labor and Class 1 railroads.

That move will keep 115,000 rail workers on the job while the arbitrators develop a set of contract recommendations for both sides to consider. A new round of negotiations is expected after those recommendations are issued.

Federal Maritime Commission (FMC) Commissioner Louis E. Sola wrote to President Biden that he was “shocked” that the new Hugh K. Leatherman terminal in Charleston, opened in March 2021, is being underutilized due to a labor dispute, and asked President Biden to intervene between the South Carolina Ports Authority and the International Longshoreman’s Association (ILA).

Dock workers at Germany’s North Sea ports went on strike in the latest of several walkouts that have added pressures on shipping as their union demands a hefty pay rise to counter high inflation in Europe.

The July strike paralyzed cargo handling at Hamburg, Bremerhaven and Wilhelmshaven, and followed a 24-hour walkout in June and a previous one-shift warning strike. Summer sure is getting hot.

Crane 2
FTZ’ine August 2022

Pelosi Visit Plans Inflame Raw U.S. – China Relations

House Speaker Nancy Pelosi will soon leave for a trip to Asia, but has not confirmed if her travel plans include a stop in Taiwan.

President Biden said last week that U.S. military officials believe such a visit is “not a good idea” at the moment. China has been quite vocal that it would interpret such a trip by the Speaker as “provocative.” The President’s comments came a day after the Chinese Foreign Ministry said it would take “resolute and strong measures” should Pelosi proceed with plans to visit Taiwan.

“Well, I think that the military thinks it’s not a good idea right now,” Biden said in response to a question about the trip. “But I don’t know what the status of it is.”

Speaker Pelosi was originally scheduled to visit Taiwan in April but had to postpone after she tested positive for COVID-19. She would be the highest-ranking American lawmaker to visit the close U.S. ally since Newt Gingrich, a Republican, traveled there 25 years ago when he was House speaker.

Chinese Foreign Ministry spokesperson Zhao Lijiang said such a visit would “severely undermine China’s sovereignty and territorial integrity, gravely impact the foundation of China-U.S. relations and send a seriously wrong signal to Taiwan independence forces.”

Fatal Port Accident Could Taint Negotiations

A 59-year-old longshoreman was killed last month at the Port Newark Container Terminal after the large straddle carrier vehicle he was driving overturned, a Port Authority of New York & New Jersey spokeswoman said.

The union is investigating the incident according to the International Longshoremen’s Association’s (ILA) Facebook page.

The fatal safety accident could color the already difficult discussions the ILA is having with the South Carolina Ports Authority over hiring practices at the new Leatherman Terminal in Charleston.

Initial reports indicate Uriel Matamoras was operating a straddle carrier (a vehicle that moves containers underneath by 'straddling' them) and was moving a 40-foot container to the yard’s MT stack. Video footage revealed the eight-wheeled vehicle was relatively stable until turning sharply to the right, causing the vehicle to topple over.

Crane
Port 2

FTZ Staff Activity

  • FTZ Board Staff processed a Termination (S-98-2022) in FTZ 28G on behalf of Talbots Import LLC, in Lakeville, MA, on June 15, 2022
  • FTZ Board Staff docketed a request (S-99-2022) to establish a subzone in FTZ 21 on behalf of DMA Sales, LLC, in Marion County, SC
  • FTZ Board Staff processed a Minor Boundary Modification (S-100-2022) in FTZ 39 on behalf of Exel, dba DHL Supply Chain, Inc., in Lewisville, TX, on June 22, 2022
  • FTZ Board Staff docketed a request (S-101-2022) to establish a subzone in FTZ 68 on behalf of Expeditors International of Washington, Inc., in El Paso, TX
  • FTZ Board Staff Monitored (S-102-2022) the production scope of FTZ 45F on behalf of Epson Portland, Inc., in Hillsboro, OR
  • FTZ Board Staff processed a Minor Boundary Notification (S-103-2022) in FTZ 64 on behalf of USA Big Mountain Paper, Inc., in Jacksonville, FL on June 27, 2022
  • FTZ Board Staff processed a Termination (S-104-2022) in FTZ 176C on behalf of Chrysler, LLC, in Belvidere, IL on June 27, 2022
  • FTZ Board Staff processed a Minor Boundary Notification (S-105-2022) in FTZ 119G on behalf of SICK Product & Competence Center Americas, LLC, in Bloomington, MN on June 29, 2022
  • FTZ Board Staff processed a Minor Boundary Notification (S-106-2022) in FTZ 119 on behalf of Archer-Daniels-Midland Company, in St. Paul, MN on June 29, 2022
  • FTZ Board Staff processed a Termination (S-107-2022) in FTZ 122L on behalf of Flint Hills Resources, L.P., in Corpus Christi, TX on June 30, 2022
  • FTZ Board Staff processed a Minor Boundary Modification (S-108-2022) in FTZ 72 on behalf of Mercury Marine, in Brownsburg, IN on July 5, 2022
  • FTZ Board Staff processed a Minor Boundary Modification (S-109-2022) in FTZ 281 on behalf of GFX, Inc., in Miami, FL on July 6, 2022
  • FTZ Board Staff processed a Minor Boundary Modification (S-110-2022) in FTZ 89 on behalf of Las Vegas FTZ, LLC, in Las Vegas, NV on July 6, 2022

FTZ Board Activity

  • Dantzler Trade, Inc. received approval for subzone status as Subzone 7S for its facility within FTZ 7 in Toa Baja, Puerto Rico. MORE
  • The City of Mesa submitted an application for the reorganization of FTZ 221 under the Alternative Site Framework in Mesa, Arizona. MORE
  • Pfizer, Inc. received authorization of production activity for lipid active pharmaceutical ingredients within FTZ 43 in Kalamazoo, Michigan. MORE
  • Sunlit Arizona LLC received authorization of production activity for specialty chemicals for microchip production within FTZ 75 in Phoenix, Arizona. MORE
  • Almod Diamonds Ltd., Inc. submitted a notification of proposed production activity for jewelry, precious and semi-precious stones, and pearls within FTZ 241 in Miramar, Florida. MORE
  • Maxter Healthcare Inc. submitted a notification of proposed production activity for medical examination disposable gloves within FTZ 149H in Brazoria County, Texas. MORE
  • Expeditors International of Washington, Inc. submitted an application for the expansion of Subzone 68A within FTZ 68 in El Paso, Texas. MORE
  • The City of Tampa received approval for the expansion of FTZ 79 under alternative site framework in Tampa, Florida. MORE
Port 1

The Race To Recess –

The Senate goes on summer vacation beginning this coming Monday, August 8th, until Labor Day. They have been trying to get all their work done before then, and have actually had some surprising successes. No Toto, there is still no federal budget, but Congress did agree on an incentive plan to try and bring supply chains for critical materials such as semiconductor chips back to the United States. The Senate is also working to pass a separate spending plan to address climate change, health care, and inflation.

The U.S. economy shrank for the second consecutive quarter. That is the normal definition of a recession, but with the job market still so hot most economists are not ready to use that term yet.

The Uyghur Forced Labor Prevention Act (UFLPA) continues to be less comprehensive than originally advertised, but needs to remain on the radar of importers. Keep looking for your Xinjiang exposure.

Concern for a global food shortage eased when Russia and Ukraine reached a deal to export 20 million tons of grain trapped by the war. Those fears promptly rekindled when Russia bombarded the main Ukrainian port of Odessa within 24 hours of making the deal. One ship has made it through securely so far, with at least 16 more tensely waiting for clearance to safely load.


Share

WASHINGTON DC

©2023 ISCM Incorporated. All Rights Reserved.
    0

    $0.00

    • Log in / Log out
    ✕

    Login

    Lost your password?

    Create an account?