Stephen Fodor
Feb 19, 20202 min
We recently have been in contact with a number of freight agents and suppliers in China to get the latest on the ongoing impact on the supply chain in China. While the situation has improved somewhat in the past week we can expect disruptions for at least the next 20-30 days and it may take a number of months until we see the situation restored to “normal.”
· There is a large backlog of orders at most suppliers and with less than 50% staffing at many factories this backlog is likely to persist for the foreseeable future. Importers are encouraged to be in close contact with their suppliers to find out their specific situation and to get a better feel for actual arrival dates for their orders. Remember many suppliers may try to paint a “rosy” picture and importers would be wise to push for realistic dates for the completion of their orders and not rely on “best case scenarios.”
· Many carriers are still cancelling sailings from China and other parts of Asia due to low demand. While rates have dropped somewhat most carriers want to try to hold the line on rates as they are already financially stressed even before the crisis began.
· The Chinese Government has put into place specific procedures for factories to restart operations and some factories are still struggling to meet those requirements. President Xi has made it quite clear that getting the factories up and running as quickly as possible is his priority.
TARIFF EXCLUSIONS EXPIRING SOON
A number of Section 301 (trade war) duty exclusions are scheduled to expire in late March. I spoke with the USTR office today and was advised that while they are considering extending or renewing some of those exclusions they anticipate the majority will not be extended or renewed. Importers who benefit from those exclusions today should be prepared to pay the 25% additional duty if their exclusion is not renewed.
This link will take you to the last combined list of exclusions and you can see the anticipated expiration date to the far right of the page alongside your specific HTS number. As always we are here to help answer any questions – info@tradelogicintl.com.