FTZ’ine January 2023
January 3, 2023
FTZ’ine March 2023
March 1, 2023
Still Working The Brakes
The Federal Reserve is expected to raise interest rates again today, reflecting the continued strength of the U.S. economy. Inflation is down from its peak last year, but the Fed wants additional reductions in the pace of consumer price increases.
U.S. chickens have so far been unruffled by any federal action to pen in price increases. Have you purchased eggs recently? Border agents are reporting confiscation of eggs smuggled in to try and take advantage of $10/dozen pricing in the States.
With no west coast labor contract, New York is getting a jump start on the unloading of containers needed to be U.S. volume king in 2023. The Port of Los Angeles held on to the title for 2022, but needs an ILWU contract before carriers start to move freight back through ports on the west coast.
The U.S. agreed with Europe last month to provide advanced battle tanks to Ukraine, but not on where electric vehicles for the U.S. market should be built. Both sides in the dispute are charged up, but still talking.
The anniversary of the Good Friday Agreement that has brought 25 years of peace to Ireland is April 10th. President Biden has given the new UK government of Rishi Sunak until that date to come up with a way to move goods between Ireland and Northern Ireland without causing undue hardship or delay due to Brexit restrictions. An international trade issue with global political and economic ramifications. Stay tuned.
Top Story: IMF Raises Global Economic Outlook . . . Slightly
The International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva said inflation was trending down and the global economic outlook was trending up, though still not in a good place.
China’s reopening after COVID restrictions is expected to boost growth, making the global economic better than feared a couple of months ago — “but less bad doesn’t quite yet mean good,” she said.
Speaking at the World Economic Forum in Davos, Switzerland last month, she noted risks to growth, including China’s reopening driving higher oil and gas prices and the “horrible” war in Ukraine damaging global consumer and business confidence, especially in Europe.
The IMF is forecasting 2023 global growth of 2.7%, a rate that was still “not fabulous,” she added. But it sure beats a recession.
China’s estimated 4.4% growth rate will also help lift the pace of global growth. “Also what has changed in the positive is we have seen demonstrably the strength of labor markets translating into consumers spending and keeping the economy up,” she said.
But she noted that recent efforts by central banks around the world to raise interest rates do not yet seem to have had an effect on world labor markets. Yet.
“If they (interest rates) bite more severely, then we can see unemployment going up. And it is very different for a consumer to have a cost-of-living crisis and a job, than to have cost-of-living crisis and no job,” she said.
Tech Tip: Do I Need To Do Anything To Keep Filing With CBP?
CBP recently sent out a CSMS message about Interconnection Security Agreement (ISA) Renewals. There was a lot of technical jargon that left many FTZ Operators wondering if they needed to do anything to keep sending their admissions and/or entries to CBP.
Typically, individual zone operators are not directly connected to CBP. Many use specialized FTZ software that allows them to file through the FTZ software company’s connection to CBP, or through a separate broker. In those arrangements the broker or software vendor is responsible for maintaining the ISA with CBP.
In a handful of cases, the zone operator may have linked directly with CBP, either because they developed software in-house, or because they didn’t want to rely on another company for the final connection to Customs. If this is the case for your imports, then you do need to take action to renew the ISA, which is valid for three years and can take up to 6 months to renew.
If you have questions about ISAs or anything else having to do with sending data to CBP, please send them to us at Info@iscm.co.
EU Trade Negotiations Still Shocked by EV Tax Breaks
Speaking from the World Economic Forum in Davos, Switzerland, the EU Commissioner for Trade, Valdis Dombrovskis, said EV provisions in last year’s Inflation Reduction Act were “discriminating against EU companies.”
He was referring to the U.S. income tax incentives for the purchase of electric vehicles. To take full advantage of the tax incentives, the battery must be built in North America and critical minerals must be extracted or processed in the United States or in free trade agreement partners of the United States. Neither the EU or the UK has a free trade agreement with the U.S.
Dombrovskis said the EU and U.S. should be “building transatlantic value chains” for the green transition, “not breaking them apart.”
The EU is considering adjusting its state aid rules in response, but member states have concerns this could benefit some countries over others. Germany, Italy, and France produce more cars than other members of the E.U.
However, Commissioner Dombrovskis told CNBC that the EU was engaged in ongoing negotiations with U.S. officials. He noted he met with U.S. Trade Representative Katherine Tai in January where the pair pledged to increase engagement on key issues including electric vehicle subsidies.
“Our concerns are the discriminatory measures in [the] U.S. Inflation Reduction Act” he said in an interview at the World Economic Forum in Davos, Switzerland. The Act, passed by Congress last August, included $369 billion in spending on climate and energy policies.
“We have a dedicated EU-U.S. task force which continues its work. We have made some progress, some of our concerns are being addressed, but there are still concerns which need to be addressed.”
Ireland’s Finance Minister Michael McGrath told CNBC the EU wanted to avoid a “subsidies race” with the U.S., and that any changes to state aid rules must not benefit countries with the “means and resources” to provide greater support to companies than others.
Section 301 Lawsuit Wins In Court. No, Not That Lawsuit.
The World Trade Organization (WTO) has ruled against the United States for the U.S. implementation of the Section 301 tariffs on goods originating from China. The WTO ruled the United States is violating international trade rules by labelling imports from Hong Kong as those from China.
That court ruling isn’t going to save anyone any money.
Perhaps sensing that defeat was likely, CBP noted in August 2020 at cbp.gov that “At this time, the additional duties imposed by the Section 301 remedy only apply to articles that are products of the People’s Republic of China (ISO Country Code CN). Imported goods that are legitimately the product of Hong Kong (HK) or Macau (MO) are not subject to the additional Section 301 duties.”
This avoided what might have been a mad rush to try and recover duty payments after the current ruling.
Until 2020, the US had treated Hong Kong, which is semi-autonomous and a separate WTO member, in the same manner as before it transitioned to Chinese control in July 1997.
In response to Beijing’s sweeping crackdown on Hong Kong in 2020, then President Trump made a decision that goods made in the city could no longer be stamped “Made in Hong Kong” but rather, “Made in China”
A three-person WTO panel found that the US violated an obligation towards Hong Kong by giving it less favorable treatment than other WTO members in terms of marks of origin on its products.
Peace Accord Anniversary Looms Large For U.K.
There was a whirlwind of trade negotiations in Ireland last month, and the pace is likely to get frenetic in the coming months.
That is because President Biden has given the UK until April 10th to revise the Brexit Northern Ireland Protocols in a way that protects the economic prosperity, and the peace between, Northern Ireland and the Republic of Ireland.
That is not an easy task. The temporary protocol effectively drew a border along the Irish Sea – separating both nations from the U.K, instead of from each other.
That has put a crimp in shipments between Northern Ireland and the U.K., which U.K. traders want removed.
The renewed diplomatic activity is fueling speculation that President Biden may visit Northern Ireland if a deal can be reached by April 10th, the 25th anniversary of the Good Friday Agreement that ended three decades of bloodshed.
The U.S. helped broker that original deal.
Former Senator George Mitchell, President Bill Clinton’s special envoy to Northern Ireland, guided the historic peace agreement over the finish line in 1998.
President Biden himself has strong Irish roots and has made clear the UK’s handling of Northern Ireland is stalling prospects of a trade deal the U.K. needs badly.
Late last year, President Biden appointed his own special envoy to Northern Ireland, Joe Kennedy III, to help the economy and build “on the long-standing US commitment to supporting peace.”
Holding Off Late NY Charge, LA Keeps 2022 Container Volume Trophy
Port of Los Angeles Executive Director Gene Seroka announced LA container volume in 2022 reached the second highest in the Port’s 115-year history.
That was enough to claim top honors as the nation’s largest container terminal in 2022. It marked the 23rd consecutive year the Port of Los Angeles has been ranked as the country’s busiest container port.
As the number of containers passing through west coast ports declined late in the year, the Port of New York and New Jersey rose to the top rank as the busiest in the nation in the fourth quarter. New York handled a staggering 19 percent more cargo in October 2022 than it did in pre-pandemic October 2019.
Solidifying its status as the second busiest port in America, New York container volumes rose 7.3 percent from 2021.
The Port of Long Beach surpassed container handling totals from the previous year and set new records, but still fell to third on the list of U.S. ports by container volume.
During the first 10 months of 2022, the Port of Long Beach saw an increase of 1.5 per cent in TEU volume compared to the same period in 2021, but as labor concerns increased, October 2022 brought a 16.6 percent decrease versus October 2021.
The Port of Savannah recorded its greatest annual handling volume, cementing its place as the 4th largest container port in the United States.
Rounding out the top 5 U.S. container ports, the Port of Houston surpassed last year’s Number 5 entry, SEA/TAC, or the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma.
FTZ Staff Activity
- FTZ Board Staff processed a Minor Boundary Modification (S-1-2023) in Foreign-Trade Zone 22 on behalf of Tele-Fonika Cable Americas Corporation, in Bolingbrook, IL on January 3, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-2-2023) in Foreign-Trade Zone 32 on behalf of BHA Jewelry, LLC, in Miami, FL on January 3, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-3-2023) in Foreign-Trade Zone 5D on behalf of Cradlecrest Usa, Inc., in Kent, WA on January 4, 2023
- FTZ Board Staff processed a Termination (S-4-2023) in Foreign-Trade Zone 241 on behalf of BHA Jewelry LLC, in Miramar, FL on January 4, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-5-2023) in Foreign-Trade Zone 22X on behalf of UPS Supply Chain Solutions, in Bensenville, IL on January 5, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-6-2023) in Foreign-Trade Zone 116E on behalf of Golden Pass LNG Terminal LLC, in Baytown, TX on January 5, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-7-2023) in Foreign-Trade Zone 241 on behalf of Unitec Marine, Inc., in Ft. Lauderdale, FL on January 6, 2023
- FTZ Board Staff processed a Termination (S-8-2023) in Foreign-Trade Zone 32 on behalf of IVI Logistics, LLC, in Doral, FL on January 6, 2023
- FTZ Board Staff processed a Termination (S-9-2023) in Foreign-Trade Zone 32 on behalf of Foreign Parts Distributors, Inc, in Miami, FL on January 6, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-10-2023) in Foreign-Trade Zone 15K on behalf of Moly-Cop USA, LLC, Kansas City, MO on January 9, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-11-2023) in Foreign-Trade Zone 57 on behalf of DLG International, Inc., in Shelby, NC on January 9, 2023
- FTZ Board Staff processed a Subzone (S-12-2023) in Foreign-Trade Zone 18F on behalf of Lam Research Corporation, in Stockton, CA on January 17, 2023
- FTZ Board Staff processed a Termination (S-13-2023) in Foreign-Trade Zone 114E on behalf of Rockwell Automation, Inc., in Champaign, IL on January 18, 2023
- FTZ Board Staff processed a Termination (S-15-2023) in Foreign-Trade Zone 138 on behalf of Designer Brands Inc., in Columbus, OH on January 18, 2023
FTZ Board Activity
- The Port of Houston Authority submitted an application for expansion of the FTZ 84 service area under the Alternative Site Framework in Houston, Texas. MORE
- Corvus Energy USA, Ltd. submitted a notification of proposed production activity for lithium-ion battery energy storage systems within FTZ 129 in Bellingham, Washington. MORE
- Albion Laboratories, Inc. submitted a notification of proposed production activity for mineral amino acid chelates within FTZ 30 in Ogden, Utah. MORE
- Nissan North America, Inc. submitted an application for the expansion of Subzone 78A in Smyrna, Tennessee. MORE
- OFS Fitel, LLC received authorization of production activity, subject to a 5-year limitation, for optical fiber products within FTZ 26 in Carrollton, Georgia. MORE
- Jo-Ann Stores, LLC received approval for subzone status for its facility within FTZ 207E in Opelika, Alabama. MORE
- The City of Socorro submitted an application for a new Foreign-Trade Zone under the Alternative Site Framework in Socorro, Texas. MORE
- The Louisville & Jefferson County Riverport Authority submitted an application for the expansion of the service area under the Alternative Site Framework of FTZ 29 in Louisville, Kentucky. MORE
- Great Plains Manufacturing, Inc. received authorization of production activity for agricultural and construction equipment within Subzone 161E in Abilene, Assaria, Ellsworth, Enterprise, Kipp, Lucas, Salina, and Tipton, Kansas. MORE
- Albion Laboratories, Inc. submitted a notification of proposed production activity for pharmaceuticals within FTZ 76 in Danbury, Connecticut. MORE
- Lam Research Corporation submitted an application for the expansion of Subzone 18F in Stockton, California. MORE
- Wyeth Pharmaceuticals, LLC received authorization of production activity for shingles and flu vaccines within FTZ 27 in Andover, Massachusetts. MORE
- Ajinomoto Bio-Pharma Services received authorization of production activity for pharmaceutical products within FTZ 153 in San Diego, California. MORE
- Volkswagen Group of America-Chattanooga Operations, LLC received authorization of production activity for additional components of passenger motor vehicles within FTZ 134 in Chattanooga, Tennessee. MORE
- The Plaquemines Port, Harbor & Terminal District has established Foreign-Trade Zone 300 under the alternative site framework in Plaquemines Parish, Louisiana. MORE
Still Working The Brakes –
The Federal Reserve is expected to raise interest rates again today, reflecting the continued strength of the U.S. economy. Inflation is down from its peak last year, but the Fed wants additional reductions in the pace of consumer price increases.
U.S. chickens have so far been unruffled by any federal action to pen in price increases. Have you purchased eggs recently? Border agents are reporting confiscation of eggs smuggled in to try and take advantage of $10/dozen pricing in the States.
With no west coast labor contract, New York is getting a jump start on the unloading of containers needed to be U.S. volume king in 2023. The Port of Los Angeles held on to the title for 2022, but needs an ILWU contract before carriers start to move freight back through ports on the west coast.
The U.S. agreed with Europe last month to provide advanced battle tanks to Ukraine, but not on where electric vehicles for the U.S. market should be built. Both sides in the dispute are charged up, but still talking. The anniversary of the Good Friday Agreement that has brought 25 years of peace to Ireland is April 10th. President Biden has given the new UK government of Rishi Sunak until that date to come up with a way to move goods between Ireland and Northern Ireland without causing undue hardship or delay due to Brexit restrictions. An international trade issue with global political and economic ramifications. Stay tuned.