FTZ’ine August 2024
July 31, 2024
Deere In The Headlights
John Deere, the world’s largest seller of tractors and crop harvesters, has laid off over 1,000 workers so far this year as it shifts production to Mexico. That is sure to become a campaign issue as both Presidential candidates look to show support for union workers, and demonstrate understanding of the impact international trade issues have on American workers.
And there are other international trade impacts to talk about.
Prospects look dim for a new east/gulf coast contract at the moment. The current ILA Master Contract expires in just a few weeks, and importers are racing to get their peak season merchandise in under the wire. That has ports around the country setting TEU records for imports. Meanwhile, the Canadian government has stepped in to temporarily quell a strike by railworkers there, though a permanent agreement remains elusive.
Congress will be back from vacation in another week and will have to get straight to work on funding for the federal government. It seems doubtful that either side will risk a shutdown before Election Day, but don’t expect passage of a full-fledged budget either. November is getting close now, and your Nation’s Capital is in election fever.
Top Story: Mass Layoffs Put Trade In Election Spotlight
John Deere laid off another 300 production workers in the U.S. right before Labor Day, as it expands production capacity in Mexico.
Ninety-nine employees were let go from the plant in Dubuque, Iowa, and 211 employees were let go in nearby Davenport. That is on top of over 900 layoffs already implemented by the company this year.
The next round of layoffs are on Sept. 20th, when 300 Waterloo, Iowa families will lose their livelihoods.
Matthew Shiltz told KWQC in Davenport “This community, the Quad Cities, is heavily Deere-based with four plants in the area. So when they take these kinds of hits, it doesn’t just affect Deere, it affects a lot of people.”
Shiltz says he knows when the severance packages from Deere run out, there will be trouble ahead.
John Deere says its sales have recently dropped 20% and cuts were required across the company. In its third quarter though, Deere beat earnings expectations and reported net income of $1.7 billion, in addition to $10.166 billion in profits last year. That discrepancy, and a shift to production in Mexico, could draw notice from the candidates in a tight Presidential race.
Deere workers are to be offered Supplemental Unemployment Benefits (SUB) which will cover about 95% of their weekly net pay for up to 26 weeks, depending on their years of service. They are also being given profit-sharing options and health benefits.
John Deere was established nearly 25 years before the start of the Civil War, and is one of America's oldest companies. In June of 2022, it announced it is moving the manufacturing of skid steer loaders and compact track loaders from its Dubuque facility to a new factory it is building in Ramos, Mexico by the end of 2026.
In October of last year, John Deere announced its first wave of 225 layoffs at its Harvester Works plant in East Moline. Another 34 production employees were laid off in May at its Moline Cylinder Works factory, while in March, company officials announced that they would lay off 150 more workers at a plant in Ankeny, Iowa, where sprayers and cotton pickers are made.
About 500 employees have also been let go at its Waterloo plant in Iowa, per WQAD.
In an interview with Fox Business, retired Deere employee Chris Laursen said “The thing to remember is John Deere is not hurting for cash. They've been in the wake of record profits for years now. In fact, last year, in 2023, they experienced $10 billion in profit. They spent $7.2 billion in stock buybacks, paid $1.4 billion in shared dividends, and awarded $26.7 million to CEO John May.”
Tech Tip: A Shorter Trip To Your ACE Reports
ACE just got slightly easier to navigate for many users. Customs and Border Protection has added an ACE “Reports” button in the modernized ACE Portal for the following account types:
• Broker
• Carrier
• Exporter
• Filer
• Importer
• Protest Filer
• Surety
Don’t see FTZ Operator on the list? That’s because there aren’t any reports for FTZ Operators. But for the account types listed above (most folks will want to access ACE Reports through their “Importer” Account) you will now find a “Reports” button in the upper right-hand corner that will launch the reports tool without the need to launch Legacy ACE first. A small step. But in the right direction.
Questions related to the new ACE Reporting access in Modernized ACE? Contact us at info@iscm.co.
New China Tariffs Still Delayed As Import And Export Bans Expand
The United States Trade Representative (USTR) has again delayed the implementation of new tariffs on Chinese-made electric vehicles, batteries, semiconductors and solar cells.
Initially, the higher duties of 100% on EVs, 50% on semiconductors and solar cells, and 25% on lithium-ion batteries and key minerals, steel and aluminum, ship-to-shore cranes and syringes were due to take effect in August.
The delay does not mean there has been improvement in the trading relationship between the two countries. China recently derided U.S. action adding firms to the export control list, and vows action in return.
U.S. allies Canada and the E.U. are likewise drawing the ire of China as they impose tariffs similar to the ones the U.S. is preparing to implement.
The EU announced a provisional tariff increase on China-made EVs to 37.6% and lowered it to 36.3% a few weeks later. Canada said last week it would follow the U.S.’s footsteps announcing a 100% tariff on China-made EVs. But the U.S. may be reconsidering its implementation strategy.
"USTR continues to develop the final determination regarding proposed modifications of the actions in the Section 301 investigation of the People’s Republic of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation," an agency spokesperson said in a statement.
Whether to ease the tariffs is the administration's first major trade decision since Vice President Kamala Harris emerged as the Democratic Party's presidential nominee.
Dialing back the duties is likely to draw criticism from Republicans that Harris is taking a softer stance on China trade in a campaign where Donald Trump has vowed to hit Chinese imports with tariffs of up to 60%. But many industries and some members of Congress have raised concerns about higher prices.
EV battery makers, including Ford Motor Co, urged USTR to ease the proposed 25% duty on graphite used in battery anodes because they are currently still too dependent on Chinese supplies. Port operators said their costs for Chinese cranes under contract would rise, and there are no U.S. producers of the giant port cranes.
Burning Tanker Reminds Red Sea Supply Chain Woes Not Over
Late last month a Greek oil tanker was on fire and adrift after multiple attacks in the Red Sea.
The Sounion was on its way from Iraq to Athens when it was attacked by more than a dozen people in two small boats west of the Red Sea port of Hodeidah in Yemen.
The crew of 25 was rescued from a Greek-flagged oil tanker after it caught fire.
After a two-week lull, the attack reminded shippers that routes through the Suez Canal remain a problem without a near-term solution.
On Thursday, the European Union’s Red Sea naval mission said it responded to a request from the shipping company and the Sounion’s captain and dispatched a unit to provide protection to the crew of 23 Filipinos and two Russians.
The crew abandoned the vessel and were rescued by the EU mission, an official told the Reuters news agency. There were no reports of injuries.
Delta Tankers, the ship’s operator, confirmed the ship was adrift and had sustained minor damage.
The vessel was on its way from Iraq to a port near Athens where there are many refineries, the Greek port authority said.
Holiday Supply Chains Nervous On Labor Unrest
Canada's top two railroads, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) had locked out more than 9,000 unionized workers in August, triggering a nationwide rail stoppage.
Less than a day later, the Canadian government ordered CN and CPKC to enter into binding arbitration with the Teamsters Canada Rail Conference union. With rail workers begrudgingly ordered back on the job, trains resumed operations.
The International Longshoremen’s Association (ILA), which represents longshore workers on the U.S. East and Gulf Coasts and the Great Lakes submitted the required 60-day strike notice.
Public negotiations covering ILA have been stalled since June 10, bringing the union closer to a potential strike at the end of this month when the current contract expires.
In an election year the U.S. government is far less likely to step in in the event of an action by the ILA. This has led international traders to ship early and ship often to try and avoid any impact of labor strife on holiday sales. A strike would have massive economic impact—billions of dollars per day.
Negotiations broke down in June over union allegations that the port of Mobile, Alabama, as well as other unnamed ports, had automated some processing of trucks entering and leaving the docks—work traditionally done by ILA members.
While the ports of Los Angeles and Long Beach on the West Coast are the nation’s largest by container volume, the next five busiest are on the East Coast and covered by the ILA/USMX agreement: New York/New Jersey, Savannah, Houston, Virginia, and Charleston.
ILA workers make less than their West Coast counterparts, and have lower pension payouts than ILWU members, if they get them at all. Port workers in Houston and Philadelphia receive no pensions. NY/NJ workers receive around 55 percent of what ILWU members do, but still almost twice what Virginia ILA members are paid out. The ILWU has a single coast-wide pension. This disparity, coupled with the 32%/6-year wage increase just granted to the ILWU, may mean the ILA digs in for significant concessions.
FTZ Staff Activity
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-132-2024) in FTZ 176K on behalf of Anderson Brecon Inc. dba PCI, Rockford, IL on July 29, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-133-2024) in FTZ 281 on behalf of World of Diesel Parts, LLC, Miami, FL on July 29, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-134-2024) in FTZ 94 on behalf of Unimex Trade & Logistics, LLC, Laredo, TX on July 30, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-135-2024) in FTZ 50 on behalf of Traffic Tech Inc., Long Beach, CA on July 30, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-136-2024) in FTZ 77J on behalf of Neotek Corporation, Inc., Memphis, TN on July 30, 2024
- FTZ Board Staff processed a Traditional Site Framework Subzone Application (S-137-2024) in FTZ 154 on behalf of Willow Glen Terminal, LLC, St. Gabrielle, LA on July 30 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-138-2024) in FTZ 77K on behalf of CE North America, LLC, Memphis, TN on July 30, 2024
- FTZ Board Staff processed a processed a Termination (S-139-2024) in FTZ 39 on behalf of FedEx Trade Networks Transport & Brokerage Inc., Coppell, TX on July 31, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-140-2024) in FTZ 84 on behalf of ATS International, Inc., Channelview, TX on August 1, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-141-2024) in FTZ 89 on behalf of NV Nutra Inc., Las Vegas, NV on August 2, 2024
- FTZ Board Staff processed a processed a Termination (S-142-2024) in FTZ 75 on behalf of Prologis Park Riverside, Phoenix, AZ on August 6, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-143-2024) in FTZ 79E on behalf of Givaudan Flavors Corporation, Auburndale, FL on August 9, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-144-2024) in FTZ 49 on behalf of Expeditors International of Washington, Inc., Edison, NJ on August 13, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-145-2024) in FTZ 147 on behalf of VF Outdoor, LLC, Jonestown, PA on August 14, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-146-2024) in FTZ 50 on behalf of Atlas Lens Co., Glendale, CA on August 14, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-147-2024) in FTZ 281 on behalf of Sari Express Forwarders Inc., Miami, FL on August 14, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-148-2024) in FTZ 144D on behalf of JB Harris Transport, LLC, Darien, GA on August 15, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-149-2024) in FTZ 281 on behalf of Southern Glazer’s Wine and Spirits, LLC, Miami, FL on August 16, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-150-2024) in FTZ 57C on behalf of DNP Imagingcomm America Corporation, Concord, NC on August 19, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-151-2024) in FTZ 38T on behalf of Rudolph Logistics North America, Inc., Greer, SC on August 20, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-152-2024) in FTZ 125H on behalf of Grand Design RV, LLC, Elkhart, IN on August 20, 2024
- FTZ Board Staff processed a Traditional Site Framework Subzone Application (S-153-2024) in FTZ 80 on behalf of Senior Operations LLC, New Braunfels, TX in August 20, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-154-2024) in FTZ 281 on behalf of Massy Motors and Machines Miami DIstributions Inc., Miami, FL on August 22, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-155-2024) in FTZ 21 on behalf of A&R Bulk-Pak SC, LLC, Moncks Corner, SC on August 22, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-156-2024) in FTZ 138J on behalf of Optum Specialty Distribution, LLC, Etna, OH on August 23, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-157-2024) in FTZ 84AJ on behalf of voestalpine High Performance Metals, LLC, Houston, TX on August 26, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-158-2024) in FTZ 49 on behalf of Mainfreight, Inc., Elizabeth, NJ on August 26, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-159-2024) in FTZ 1382 on behalf of Optum Specialty Distribution, LLC, Etna, OH on August 26, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-160-2024) in FTZ 20I on behalf of Givens Inc., Chesapeake, VA on August 28, 2024
Foreign-Trade Zone Board Activity
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- Willow Glen Terminal LLC submitted an application to operate its Saint Gabriel, Louisiana facilities as a Subzone of Foreign-Trade Zone 154. MORE
- Twin Disc, Inc. received authorization of production activity for power transmission products within Foreign-Trade Zone 297A in Lufkin, Texas. MORE
- Tallaboa PR, LLC submitted an application to operate its Peñuelas, Puerto Rico facilities as a Subzone of Foreign-Trade Zone 163. MORE
- Jubilant HollisterStier, LLC received authorization of production activity for pharmaceuticals within Foreign-Trade Zone 224A in Spokane, Washington. MORE
- Boehringer Ingelheim Animal Health Puerto Rico LLC submitted a notification of proposed production activity for animal health products within Foreign-Trade Zone 61AC in Barceloneta, Puerto Rico. MORE
- Phillips 66 Company submitted an application for production authority for renewable fuels and by-products within Foreign-Trade Zone 3E in Rodeo, California. MORE
- Curia New York, Inc. submitted a notification of proposed production activity for pharmaceutical APIs within Foreign-Trade Zone 121A in Rensselaer, New York. MORE
- voestalpine High Performance Metals LLC d/b/a voestalpine Specialty Metals submitted a notification of proposed production activity for specialty metal products within Foreign-Trade Zone 84AJ in Houston, Texas. MORE
- Boss Laser, LLC submitted an application to operate its Sanford, Florida facilities as a Subzone of Foreign-Trade Zone 250. MORE
- Toyota Material Handling, Inc. submitted a notification of proposed production activity for forklift trucks, work trucks and automated guided vehicles within Foreign-Trade Zone 72 in Columbus, Indiana. MORE
- Consolidated Diesel Company received approval to expand Subzone 214A to include a new site (#5) in Whitakers, North Carolina. MORE
- Senior Operations LLC submitted an application to operate its New Braunfels, Texas facilities as a Subzone of Foreign-Trade Zone 80. MORE
- Broadband, Inc. received authorization of production activity for fiber optic conduit within Foreign-Trade Zone 90C in East Syracuse, New York. MORE
- Patheon API Inc. received authorization of production activity for pharmaceutical products within Foreign-Trade Zone 21J in Florence, South Carolina. MORE
Deere In The Headlights:
John Deere, the world’s largest seller of tractors and crop harvesters, has laid off over 1,000 workers so far this year as it shifts production to Mexico. That is sure to become a campaign issue as both Presidential candidates look to show support for union workers, and demonstrate understanding of the impact international trade issues have on American workers.
And there are other international trade impacts to talk about.
Prospects look dim for a new east/gulf coast contract at the moment. The current ILA Master Contract expires in just a few weeks, and importers are racing to get their peak season merchandise in under the wire. That has ports around the country setting TEU records for imports. Meanwhile, the Canadian government has stepped in to temporarily quell a strike by railworkers there, though a permanent agreement remains elusive.
Congress will be back from vacation in another week and will have to get straight to work on funding for the federal government. It seems doubtful that either side will risk a shutdown before Election Day, but don’t expect passage of a full-fledged budget either. November is getting close now, and your Nation’s Capital is in election fever.