Trump Tariffs, a Nonessential Declaration, and Spyware Suspicions.
Your weekly All-Ways round-up of Supply Chain news.
Tariffs Trumped
Logistics companies say they are shifting global trade in advance of a potential Donald Trump second term and which would come with a hike on Chinese import tariffs.
On Monday morning, Trump said he is ready to put pressure on the Chinese auto industry as part of an effort to escalate the trade war, potentially using Mexico as a gateway for car exports.
Trump said he’s considering tariffs of at least 60% on Chinese goods, in addition to a blanket 10% tariff on all U.S. imports if elected to a second term. Currently, tariffs on U.S. imports range between 10% and 25%.
According to Niki Frank, CEO OF DHL Asia, supply chains are likely to shift away from China should such a tariff be imposed.
U.S.-bound Chinese trade is already utilizing Mexico ports in order to avoid tariffs implemented under both Trump and Biden, following 15% of Chinese goods arriving into Mexico in 2023.
Essential Rejection
Maritime employers of the Port of Montreal lost a bid last week to designate container services as “essential” and bar workers from striking.
The request, filed by the Maritime Employers Association (MEA) in October of last year, was made in an attempt to end union negotiations for a new contract that have dragged on unsuccessfully for several months.
The MEA was in talks with unions representing 1200 dockworkers when it filed the request and maintains that their “priority remains the conclusion of a negotiated collective agreement.”
As a result of the rejected “essential” designation, dockworkers will be able to strike with 72 hours notice, which may make negotiations difficult if a mutually acceptable agreement is not reached soon.
The port has experienced strikes in previous negotiations, during contract negotiations in 2020 and over a 2-hour work day extension in 2021.
Crane Control
Chairman of the House Committee on Homeland Security, Rep. Mark Green, R-Tenn., sent a strongly worded letter to Chinese manufacturer Zhenhua Heavy Industries Co. (ZPMC) on february 29, following the discovery of cellular modems in cranes manufactured for U.S. ports by ZPMC.
These modems would enable spying or remote control of the cranes, which could result in sabotage – with about 80% of all cranes in the U.S. manufactured by ZPMC, the potential for sabotage is beyond significant.
The presence of spyware was even more concerning given the location of the factory, which is next door to the Jiangnan Shipyard, where China builds warships.
The letter comes as a result of a congressional investigation by the Committee on Homeland Security as well as the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (CCP), which began in June of 2023.
ZPMC responded to the letter stating that the modems did not pose a threat to any ports, which was corroborated by the Association of American Port Authorities (AAPA), which stated that “there have been no known security breaches as the result of any cranes at U.S. ports.”