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Market Update

Freight Market Update: December 4, 2019

Ocean and air freight rates and trends; customs and trade industry news for the week of December 4, 2019.


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Freight Market News

E-Commerce Skews Logistics Labor Stats The logistics job market may be larger than anyone knows, according to The Wall Street Journal. Low counts omit holiday and other temporary hires, plus emerging e-commerce warehouse roles that defy traditionally tracked categories.

US President Mulls Lengthy Wait on Trade War Just ahead of new tariffs on December 15, Reuters reports that President Trump has announced he may wait until after US elections in November 2020 to finalize a trade deal with China.

Meanwhile, this week, Flexport Chief Economist Dr. Phil Levy noted the following economic highlights:

  • Decreased World Trade Volume is reflected in a report showing a 1.3% fall in September from August.
  • US Economic Growth in Q3 was re-estimated at 2.1% vs. an initial estimate of 1.9%.
  • Positive October Data shows a rise in durable goods orders of 0.6% after a fall in September; core capital goods orders rose 1.2% after a September drop.
  • Chinese Manufacturing Grew in November, beating expectations and reversing six months of decline, according to a purchasing managers index.
  • New Commerce Department Regulations could block information and communications technology and services imports that are deemed a threat to US national security. If implemented, the new rules could mirror the restriction of foreign investment (known as CFIUS). The measure seems to be aimed at China.
  • South Korean Exports Fell sharply in November—14.3% year over year, due to the US-China trade war.

Customs and Trade Updates

France Section 301 Tariffs Proposed The USTR released a list that covered 63 subheadings, mainly including dairy, cheese, cosmetics, bags, and some higher-end ceramic (porcelain/fine china) goods. The new tariffs could be up to 100% of the value of the products. The proposed duties are a retaliation measure in response to France’s digital excise tax on companies like Facebook, Amazon, and Google. Comments on the proposed list are due by January 6th with a hearing scheduled to take place on January 7.

More Product Exclusions Granted for Section 301 List 3 Last week the USTR released a list of 32 specifically prepared product descriptions for exemption that were on the third Section 301 list. Just like the previous exclusions granted, these are retroactive to the implementation date of the September 24, 2018 list. The exclusions will be effective until August 7, 2020.

Section 232 Tariffs President Trump tweeted that he will bring back tariffs on steel and aluminum for imports that are coming from Brazil and Argentina. The tweet cited devaluation of their currency as justification for the duties. Flexport Chief Economist Phil Levy provided further analysis on Forbes. There has been no official Federal Register release at this time.

**For a roundup of tariff-related news, visit Tariff Insider

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