Easing of China Tariffs?
As Section 301 tariffs on imports from China are set to expire later this year, a Biden administration official is advocating to scale back on what’s taxed.
Deputy National Security Adviser Daleep Singh is suggesting that the US limit the tariffs to goods connected to foundational technologies, national security, or critical supply chains.
“For product categories that are not implicated by those objectives, there’s really not much of a case for those tariffs being in place,” Singh stated. “Why do we have tariffs on bicycles or apparel or underwear? There are a whole host of goods – think of Lists 3 or 4A – where it’s not obvious to me at least what strategic purpose they’re serving.”
Currently, tariffs are automatically eliminated after four years unless an affected domestic industry requests their extension, and the deadlines for List 1 and List 2 goods are set to expire this summer. Across the board, it seems like there is growing support to ease some of the tariffs.
With the current political and economical situation in both countries, it would be beneficial for both China and the USA to ease their tariffs.
Source: Sandler, Travis & Rosenberg, P.A
Draining the Pump
As the world rushes to find alternative replacements to Russian supplies, US oil exports at an all time historically high rate.
The exports are outweighing imports at an unprecedented rate. It’s draining inventories and is also causing the already hiked up gas prices to spike even more.
With the summer months coming, the export is expected to remain strong. But nicer weather also means more people will be hitting the road for vacations and the demand for fuel will rise.
It’s becoming increasingly clear just how difficult it will be to replace Russian fuel. Gas prices are expected to keep climbing with no end in sight which is directly contributing to inflation.
Source: AJOT
Closed Opening
666 companies were given the go ahead to restart production in Shanghai. This is after submitting a course of action to stop the spread of Covid.
The automobile, semiconductor and energy sectors are the main factories restarting operations. The central Chinese government is assisting in helping key industries open back up in an attempt to stabilize its supply chain.
Being Sent in Loops
This closed-loop system isn’t the end all solution.
Tesla, for example, will require workers to sleep on-site. However, it’s been proven difficult to get workers to the factories.
If you have workers but no parts, you’re kind of stuck. And you guessed it, after this never ending lockdown, there was a disruption to the supply of parts.
Never Ending Ending?
Chinese authorities are aiming to ease the lockdown measures this week if there are no new outbreaks within the quarantine and isolation systems. However, other cities are now reporting outbreaks.
So while the US is dropping its mask mandate, China is increasing its measures. This never ending lockdown seems to have no end in sight which is not good news for the supply chain.
Hopefully, the reopening of the factories will help get things back on track.
Source: Air Cargo News