Tariffs Catch-All

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I have a young friend that works for a large outfit in the Triangle that is in the LED business-very reliant on Chinese imports. She says some of her customers are talking about setting up logistics to have Chinese goods send to another country , then exported here.... etc
Crazy times
 

The proposed imposition of US port fees on Chinese-built and Chinese-operated ships could dramatically impact US chemical exports and result in China being the biggest beneficiary, panelists said.

The potential fees would result in the cost of a smaller vessel, currently paying a port fee of around $20,000, soaring to about $500,000, said Udo Lange, CEO of chemical tanker operator Stolt-Nielsen, in a panel session focused on supply chain issues on March 18. For larger ships, the current fee of around $40,000 would soar to between $1.5 million and $3.0 million, he said.

"If you pay these fees, they will lead to a 30% increase on certain chemicals in deep sea, and on the shorter routes [with] the smaller ships, it's around a 70% increase. So the outcome of that is, of course, that US exports are not competitive anymore and China, funnily enough, would be the winner of this," Lange said.

The US Trade Representative has proposed charging $1 million per instance for vessel operators from China to enter a US port. Fleets with Chinese-built vessels would be charged up to $1.5 million per entrance based on the percentage of such vessels in the fleet. The USTR said the rule would boost shipbuilding efforts in the US and reduce dependence on China's fast-growing commercial fleet. China owned over 19% of the world's commercial fleet as of January 2024, the USTR said.

Fellow WPC panelist Gina Fyffe, CEO of trader Integra Petrochemicals, said, "one of the big losers in this if the port tax comes in will be almost certainly the US, and that will happen quite quickly." Looking at the global chemical tanker and gas tanker fleet, Fyffe noted that a "large percentage of the gas fleet was built in China." As a result, tariffs imposed would result in "no ethane, no LPG, no ethylene. So who's that hurting?" she said.

Lange noted that the chemical industry is the second largest manufacturing industry in the US and that the port fees would impact 25% of US GDP overall. US chemical exports are valued at around $160 billion, he said.

The stainless steel tanker fleet of 850 vessels represents about 1% of the global fleet, which consists of about 20,000 ships in total, he said.

"The risk on the other side is massive," he said. "You affect 25% of GDP. And building chemical tankers is more complicated than containerships. So building an industry would probably take around a decade."
 

The proposed imposition of US port fees on Chinese-built and Chinese-operated ships could dramatically impact US chemical exports and result in China being the biggest beneficiary, panelists said.

The potential fees would result in the cost of a smaller vessel, currently paying a port fee of around $20,000, soaring to about $500,000, said Udo Lange, CEO of chemical tanker operator Stolt-Nielsen, in a panel session focused on supply chain issues on March 18. For larger ships, the current fee of around $40,000 would soar to between $1.5 million and $3.0 million, he said.

"If you pay these fees, they will lead to a 30% increase on certain chemicals in deep sea, and on the shorter routes [with] the smaller ships, it's around a 70% increase. So the outcome of that is, of course, that US exports are not competitive anymore and China, funnily enough, would be the winner of this," Lange said.

The US Trade Representative has proposed charging $1 million per instance for vessel operators from China to enter a US port. Fleets with Chinese-built vessels would be charged up to $1.5 million per entrance based on the percentage of such vessels in the fleet. The USTR said the rule would boost shipbuilding efforts in the US and reduce dependence on China's fast-growing commercial fleet. China owned over 19% of the world's commercial fleet as of January 2024, the USTR said.

Fellow WPC panelist Gina Fyffe, CEO of trader Integra Petrochemicals, said, "one of the big losers in this if the port tax comes in will be almost certainly the US, and that will happen quite quickly." Looking at the global chemical tanker and gas tanker fleet, Fyffe noted that a "large percentage of the gas fleet was built in China." As a result, tariffs imposed would result in "no ethane, no LPG, no ethylene. So who's that hurting?" she said.

Lange noted that the chemical industry is the second largest manufacturing industry in the US and that the port fees would impact 25% of US GDP overall. US chemical exports are valued at around $160 billion, he said.

The stainless steel tanker fleet of 850 vessels represents about 1% of the global fleet, which consists of about 20,000 ships in total, he said.

"The risk on the other side is massive," he said. "You affect 25% of GDP. And building chemical tankers is more complicated than containerships. So building an industry would probably take around a decade."

How's that port tax taste now WV?
 
Just looked it up -- you could have gotten 3.3 DM for a dollar in Feb 85. Was that when you were there? by summer it had fallen to 2.9-3.

You're right that the pound was at 1.32 in summer of 84. You couldn't have bought for 1.03, because it bottomed out at 1.07, but that's pretty damn good for a 40 year old memory. But again, that low was in Feb 85 (obviously when the dollar was at its strongest).

In Feb 85, francs were 10 to a buck, but by summer it had fallen to 8.5.
I was buying currency in Spring ‘85.
 
So… Trump is basically putting a feeler out for bribes for tariff exemptions here, right? Is there another way to interpret that comment?
Yes there is another way to interpret that.

Biden Crime Family!!!!!111111111111
 

China Explores Limiting Its Own Exports to Mollify Trump​

Chinese officials weigh Japan’s 1980s strategy—restraining exports while charging more—for products such as electric vehicles or batteries​


GIFT LINK 🎁—> https://www.wsj.com/economy/trade/c...b7?st=yFHJj2&reflink=mobilewebshare_permalink

“… Now, faced with an even greater economic assaultfrom the second Trump presidency at a time of sluggish growth at home, Beijing may take a page from Tokyo’s playbook—on one specific issue it sees as in its own interest.

Like Japan decades ago, China is considering trying to blunt greater U.S. tariffs and other trade barriers by offering to curb the quantity of certain goods exported to the U.S., according to advisers to the Chinese government.

Tokyo’s adoption of so-called voluntary export restraints, or VERs, to limit its auto shipments to the U.S. in the 1980s helped prevent Washington from imposing higher import duties. …”
 
To be clear, a Voluntary Export Restraint is just a tariff where the home country keeps all the revenue. If China VERs its EV industry, it will lead to higher prices in the US. It's just that the higher prices will remain in the producer's pocket, because they are limiting themselves to inframarginal sales; the US will get nothing.

I had forgotten about VERs, but they are close cousins to Export Duties. I have said (and it appears to have been borne out) that Trump was going to lose his fucking mind when he found about Export Duties. If he understood VERs, he would lose his mind about them too . . .. but he will probably interpret the VER as a sign of obedience (they aren't), and soon he will be insisting other countries adopt VERs. Which, again, have all the downsides of tariffs and none of the upsides.
 

White House Narrows April 2 Tariffs​

Tariffs on industrial sectors like cars and microchips are no longer expected to be announced on that date, though major trading partners will still be hit with so-called reciprocal tariffs​



“… President Trump has declared his April 2 deadline to be “Liberation Day” for the U.S., when he will put in place so-called reciprocal tariffs that seek to equalize U.S. tariffs with the duties charged by trading partners, as well as tariffs on sectors like automobiles, pharmaceuticals and semiconductors he repeatedly said would be enacted on that day.

Those sector-specific tariffs, however, are now not likely to be announced on April 2, said an administration official, who said the White House is still planning to unveil the reciprocal tariff action on that day, though planning remains fluid. The shift was earlier reported by Bloomberg.

The fate of the sectoral tariffs, as well as tariffs on Canada and Mexico that Trump said were justified by fentanyl trafficking, remains uncertain. The White House didn’t respond to requests for comment on if or when any of those tariffs are still planned to go into effect.


The focus of the reciprocal action now looks to be more targeted than originally thought, according to people with knowledge of the planning, though it will still hit countries that account for most of the U.S.’s imports.

The administration is now focusing on applying tariffs to about 15% of nations with persistent trade imbalances with the U.S.—a so-called “dirty 15,” as Treasury Secretary Scott Bessent put it last week. Those nations, which Bessent said account for most of the U.S.’s foreign trade, will be especially hard-hit with higher tariffs, said people with knowledge of the matter, though other nations could be given more modest tariffs as well.

Targeted nations are expected to be close to those laid out by the U.S. trade representative in a Federal Register notice last month, which directed commenters to focus on nations with trade imbalances with the U.S., such as the G-20 nations and Australia, Brazil, Canada, China, the European Union, India, Japan, South Korea, Mexico, Russia, Vietnam and more, said a person with knowledge of the plans. …”
 
I have a young friend that works for a large outfit in the Triangle that is in the LED business-very reliant on Chinese imports. She says some of her customers are talking about setting up logistics to have Chinese goods send to another country , then exported here.... etc
Crazy times
They can do this under the de minimis provision assuming they ship less than a value $800 at a time from the secondary warehouse, but considering the current state of tariffs with Mexico and Canada - you'd have to go out of your way to find an amenable situation. They should consider re-sourcing their product to other countries outside China at this point. There has been a lot of chatter about eliminating de minimis. And if Trump eventually starts issuing tariffs on developing nations (other than China) - then I don't know where some of these low cost items will be produced.
 
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