Logistics News and Updates

News

French General Strike

Following announcement of pension reform plans, works in France initiated a nationwide labor strike on December 5, 2019. The largest labor action in years, the strike has shutdown a wide array of services, including France’s air, rail, and motor transport networks. While some French unions are only calling for a one-day action, others are calling for indefinite action.

What can US importers/exporters do?

Mercury can assist with routing of shipments into and out of France via other EU countries in order to lessen any transit delays. We otherwise recommend factoring in potentially lengthy transit delays for goods importing into or exporting out of France. You should coordinate with your partners in France to determine how any labor strike is affecting them locally and then proceed from there.

Mercury has a staff of highly experienced logistics/supply chain professionals and utilizes a global network of logistics agents. We are prepared to assist you with all your logistics and supply chain needs. Please Contact Us if you have any questions. Thank you.

 

US trade Dispute with China

Updates:

On October 1st, 2019, the Office of the US Trade Representative began the process of raising the additional tariff imposed on the first 3 groups of product import classifications from 25% to 30%. At the same time, it announced that the additional tariff imposed on the 4th group announced in September 2019 would increase from 10% to 15%.

Additional information:

USTR Statement on Section 301 Tariff Action Regarding China

Section 301 Trade Remedies to be Assessed on Certain Products from China

Pursuant to Section 301 of the Trade Act of 1974, as part of a continuing trade dispute with China, the United States last year levied higher customs duties on certain imports from China containing what it referred to as “industrially significant technologies”.

What happened?

In June 2018, the US announced an additional 25% duty levied on an initial list of product import classifications. This was followed in August 2018 by an announcement of an additional 25% duty on a 2nd list of product import classifications. Lastly, in September 2018 an additional 10% duty was levied on a 3rd group of product import classifications with the stated intent to raise it to 25% at a future date, finally raising it to 25% on this 3rd group of products in May 2019. The levies on these three groups of products are assessed only on those products made in China, not on those products made elsewhere and exporting from China. The current list of the affected product classifications can be found here.

What can US importers do?

The number of product classifications affected by the Section 301 tariffs, the tariff costs involved, and the rules governing their application means that US importers should seek professional legal and accountancy advise when conducting regular import trade operations from China. The risks to the logistics flows (material, information, and cash) are too great not to consider. The Office of the US Trade Representative maintains a website here with useful information regarding the new tariffs and the process to seek exclusions from the additional tariffs on specific goods.

Mercury has a staff of highly experienced logistics/supply chain professionals and utilizes a global network of logistics agents, including China. We are prepared to assist you with all your logistics and supply chain needs. Please Contact Us if you have any questions. Thank you.

 

US trade dispute with the EU

Following a favorable decision by the World Trade Organization, the US is set to impose additional tariffs on $7.5 billion dollars’ worth of goods made in the EU, principally airframes made by EU aircraft manufacturer Airbus, but also including certain clothing as well as foodstuffs such as such as coffees, olives, cheeses, liqueurs and cordials.

What happened?

The US filed for arbitration with the World Trade Organization alleging that the EU was unfairly subsiding the aircraft manufacturer Airbus, thus placing US aircraft manufacturers such as Boeing at a competitive disadvantage because the US government doesn’t subsidize them. The US alleged that Airbus was able to use the EU subsidies to underbid Boeing for key contracts. In its grievance, the US sought a declaration that the EU subsidies were an illegal contravention of WTO agreements, as well as permission to impose retaliatory tariffs on certain EU goods. On October 2nd, 2019, the WTO issued an arbitration ruling agreeing that the EU subsidies to Airbus were a violation of WTO agreements, placing the US aerospace industries at a disadvantage, and awarding the US . The US plans to present a schedule of additional tariffs on a list of EU goods for approval at a meeting of the WTO on October 14th, 2019.

What can US importers do?

US importers can see a list of the goods that the US plans to add tariffs to here.

Mercury has a staff of highly experienced logistics/supply chain professionals and utilizes a global network of logistics agents, including China. We are prepared to assist you with all your logistics and supply chain needs. Please Contact Us if you have any questions. Thank you.

 

Brexit Update

In addition to our previous recommendations, during this extension Mercury recommends some additional actions based on a letter that the UK customs agency, HM Revenue and Customs (HMRC), sent to companies that have UK VAT registrations.

What a “no deal” or “hard” BREXIT means
  • Shipments to or from Britain would fall under Britain’s own import/export regulatory regime and not the EU’s, potentially creating lengthy customs delays for shipments to/from Britain.
  • Shipments to/from Britain with origin/destination in the EU would need to undergo full customs entry procedures and would no longer be permitted to freely circulate in between (that is to move between Britain and the EU without undergoing customs entry).
    • Would add to the time needed to deliver the shipments since they will need to clear customs at either end.
    • Customs/taxes would need to be paid on entry to either Britain or the EU.
  • Shipments to/from the remainder of the EU may no longer be permitted under EORI numbers issued in Great Britain (numbers starting with “GB”).

Recommendations
  • You can create/increase the safety stock of goods that you may need in either Britain or a country in the EU – we can arrange storage with agents in either case.
  • You can register for a non-resident EORI number in one of the other remaining EU countries to have when shipping to/from any EU country – this registration is required by the EU. We can point you in the direction of an EU country’s customs/EORI website for further information.
  • You can investigate setting up entities in either Britain or an EU country as needed.
  • Start planning now for a hard BREXIT.
  • If you have a UK entity with only a VAT registration, then have it register for an EORI number - EORI Registration Page Info. Post-BREXIT, your UK VAT registration number alone may not suffice for continued UK import/export operations. Note that while the UK will extend the use of EORI numbers issued by HMRC, the EU may alter its acceptance of UK-issued EORI numbers; see recommendation above regarding non-resident EORI numbers issued by EU countries. **
  • If you import from the EU into the UK, then register for Transitional Simplified Procedures (TSP). You’ll need a UK-issued EORI number. **
  • If you export from the UK to the EU, then you should examine the customs information for the destination in the EU and also check the Prepare for EU Exit page. **
  • If you have a UK entity, you should discuss the VAT ramifications with your UK tax agent as there will be some things you’ll want to address/decide post-BREXIT regarding VAT filing. **
  • As the situation develops between now and the deadline, things will change quickly so please sign up for emails regarding BREXIT from the HMRC email update page and select “EU Exit” as one of the subscription options. **
** - HMRC letter to VAT Registrants, March 2019

Mercury has a staff of highly experienced logistics/supply chain professionals and utilizes a global network of logistics agents, including the UK and EU. We are prepared to assist you with all your logistics and supply chain needs during the BREXIT transition. Please Contact Us as soon as possible if you have any questions. Thank you.

NOTE: Mercury is not a customs broker, law or accounting firm, and we do not offer legal or accountancy advice. Any information provided here is for informational purposes only and not a substitute for professional legal and/or accountancy advice.