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  • 08 Aug 2018 by Global Chamber Charlotte

    Three companies operating in the Carolinas have recently announced current and potential layoffs directly attributable to the imposition of tariffs on steel and aluminum and additional rounds of tariffs on particular goods:

    • Element TV has laid off 126 workers assembling TVs in Fairfield County, South Carolina from imported components.  Eight employees remain in caretaker roles.
    • BMW, operating their largest assembly plant in the world in Spartanburg, SC, has announced that they will probably begin laying off some number of their 10,000 employees in the fall.  Some planned production of new models has already been shifted to Asian plants.
    • Volvo, opening a plant near Charleston, SC, has indicated that they may fall short in their employment goals (currently 4,000 by 2021).

    Nucor Corporation, headquartered in Charlotte, NC has announced the construction of a new galvanizing line at the company's sheet mill in Arkansas to support their growth into a wider set of end-market applications.  Planning is said to be underway for adding galvanizing lines to other mills.

    Given the reach of the steel and aluminum tariffs in American manufacturing, the Trump administration set up a process managed by the Department of Commerce (DoC) whereby manufacturers could seek exemptions for the tariffs for specific components (such as pipes, wire, screws).  Over 20,000 exemptions have already been filed, but DoC included provisions where steel and aluminum producers could object to specific claims.  Nucor, along with United States Steel and AK Steel Holding Company, have made 2,700 such objections.  All have been approved and the exemption rejected.  DoC has granted 20 aluminum exclusions over an objection.

     

     

  • 29 Jun 2018 by Mark Lohsen

    China, through its centrally directed economy, has a grand strategy to redirect its economy and its political ambitions to assume a global leadership position.  America’s retreat from the global stage is enabling this strategy and ceding whole industrial sectors it had once dominated.

     

    By the time of the publication of the 13th Five Year Plan in 2015, China had recognized its growth was slowing and its economy was maturing.  China could no longer remain the low cost producer in all sectors and, using Japan and South Korea as models, foresaw the need to move into higher value technologies.  It also had an energy problem.  Not only did they need to increase the output and efficiency of their power production and distribution systems, they needed to move away from coal as their primary source of power.  The 13th Five Year Plan firmly established low carbon technologies as a multi-dimensional solution to increasing energy production and reducing their carbon emissions. 

     

    China immediately moved to establish its role as an innovator in renewable energy technologies and coupled this with their existing manufacturing and exporting dominance to rapidly evolve.  Seeing this as leading their next phase of prosperity, China invested $103 B in 2017 and installed half of the world’s new wind power.

     

    Using renewable energy technologies as a centerpiece of their export plans, President Xi Jinping’s administration adopted “ecological civilization” as a complimentary program and established policies to restore decimated forests and reverse desertification.  This bundle of technology and expertise is then taken to the world in order to solidify China as a leader in critical global issues.

  • 25 Jul 2018 by Global Chamber Charlotte

     

    European Commission President Jean-Claude Juncker met with President Trump today to discuss trade and tariffs. The major announcement following the conclusion of the meeting is both parties will open negotiations to, as Trump put it, "work toward zero tariffs, zero non-tariff barriers and zero subsidies.”  This 0-0-0 approach, however, does not include automobiles, which is a significant concern for Germany. They also agreed to hold off on any further tariffs, unless either side terminates the negotiations.

     

    As an incentive to start negotiations, Juncker indicated the EU would begin importing more liquefied natural gas and soybeans from the U.S.  

     

    The leaders said the U.S. and EU would work together on other issues, including reforms to the World Trade Organization to cut down on unfair trade practices. 

  • 11 Jul 2018 by Global Chamber Charlotte

    On Tuesday, July 10th, the Trump Administration released a 195 page list of Chinese exports worth $200 B that may soon be facing a 10% tariff.  This move is in response to the $34 B in tariffs imposed by China as an "equal measure response" to American tariffs imposed on July 6th.  A more immediate, second round of tariffs, equaling $16 B, is being threatened by President Trump, with additional considerations of fourth round of $300 B.  That would bring the total to $550 B and exceeds the total value of Chinese goods imported last year ($506 B).

    To come up with $200 B of targeted imports, the list includes common items such as soy sauce and rice, as well as items that haven't been imported for decades (e.g., trout).

     

     

     

     

     

     

  • 07 Jun 2018 by Mark Lohsen

    Mexico, on Tuesday, June 5th, imposed a series of tariffs on American exports, in retaliation for the Trump administration’s steel and aluminum tariffs.  The targeted products include pork, apples, potatoes, bourbon as well as different types of cheese.

    The tariffs range between 15% and 25% can be expected to cut deeply into US exports to its southern neighbor.  While Mexico exports more goods and services to the US than it buys, it is also the second largest market for US exports, buying $277 billion worth of US goods and services last year, according to the Commerce Department.

    Mexico is the largest market for US pork exports, according to the National Pork Producers Council.  It says that 25% of US pork exports last year went to Mexico.  North Carolina was the second largest producer of pork in 2017.

    The Mexico announcement follows the European Union announcement of a similar series of retaliatory tariffs of 25% on roughly 200 American products, including orange juice, US denim, bourbon, motorcycles, peanut butter, motor boats and cigarettes.

  • 15 Jun 2018 by Global Chamber Charlotte

    China's government announced on Friday, June 15th, that it will immediately impose penalties of "equal strength" on U.S. products.

    The Commerce Ministry said it also was scrapping deals to buy more American farm goods and other exports as part of the May efforts to defuse disputes over its trade surplus and its aggressive technology policy.  Much of this targeted impact intended to affect President Trump's rural supporters.

    The Ministry announcement stated "The Chinese side doesn't want to fight a trade war, but facing the shortsightedness of the U.S. side, China has to fight back strongly.”  It continued with: "We will immediately introduce tax measures of equal scale and equal strength, and all economic and trade achievements reached by the two sides will be invalidated."

    Beijing had also announced plans to cut import duties on autos and some consumer goods.  As part of this initiative, they had announced plans to ease limits on foreign ownership in auto manufacturing, insurance and some other industries.

  • 19 Jun 2018 by Global Chamber Charlotte

    At the core of the current tariff dispute is China’s theft of intellectual property.  American companies that want to do business in China are typically forced into joint ventures with Chinese state owned companies.  In building up their business, Chinese partners are given access to proprietary information.  data. They then use that data for their own benefit, often in other state run business with similar products.  This is a significant and complex problem.  Tariffs will not solve this problem and will cause immediate harm to US businesses, especially agriculture. 

    China is America’s second-largest agricultural export market.  American producers rely heavily on exports to China to sustain their operations.  The targets of China’s tariffs also extend to key US manufacturing sectors, including cars, light trucks and light aircraft, and so directly affect large producers such as the Big 3 car manufacturers and Boeing.

    Treasury Secretary Steven Mnuchin has stated there is a possibility that the U.S. might return to negotiations with China by means of a bilateral investment treaty (BIT).  The U.S. has BITs with 42 other countries, and negotiations with China had started with the Obama administration. Resuming BIT negotiations is an effective, but longer term, solution.  The US could, among other things, demand strong language requiring China to abide by the WTO’s Trade-Related Aspects of Intellectual Property Rights Agreement within a BIT in lieu of recently discussed considerations to re-enter the Trans Pacific Partnership.

  • 05 Jun 2018 by Global Chamber

    Trade Update on China

    China enjoyed a record $375 B trade surplus with the United States last year.  Bilateral US China trade negotiations had been progressing with preliminary concessions to reduce the imbalance. 

    On Sunday, June 3rd, though, China threatened to scape deals aimed at settling the dispute with Washington if President Trump’s tariff hike on $50 B of Chinese technology goods goes ahead.

    China had issued a pledge on May 19th to buy more American farm goods, natural gas, and other energy supplies.  But President Xi Jinping’s government sees China’s growing strength in technology as a path to restoring the country’s political and cultural greatness (RCPCG hats anyone?) after more than two centuries of foreign interference in China’s affairs.

    Left unaddressed in the talks are key American concerns, including increased access to Chinese markets and improved protection of intellectual property, particularly patents and trademarks.

     

    Mexico Initiates WTO Challenge

    On June 4th, Mexico initiated a challenge to the US tariffs on steel and aluminum at the World Trade Organization.  They contend that President Trump’s actions are illegal under international trade rules.

    President Trump imposed steel and aluminum tariffs under Section 232 of the Trade Expansion Act of 1962 (19 USC 1862), specifically to address “threats to national security.”  Mexico argues that these provisions violate the WTO’s agreement on safeguard procedures and violate the General Agreement on Tariffs and Trade of 1994.

    Mexico has also vowed reciprocal retaliation against a range of US products.  Canada, also affected by these tariffs, has pointed out that the U.S. actually exports more steel to Canada than Canada sends to the U.S. and Canadian responses will decrease American jobs.

  • 01 May 2018 by Global Chamber Charlotte

    TRADE UPDATE

    Late last night, President Trump decided to hold off on imposing most of the administration’s tariffs on imported steel and aluminum, at least until June 1.

    Tariffs were scheduled to take effect at 12:01 a.m. Tuesday, April 30th.  Major trading partners to be affected by these tariffs included Canada, the largest U.S. supplier of steel and aluminum, as well as Mexico, Argentina, Australia, Brazil and the EU.  China may well have been the intended target, but our imports of their steel and aluminum have been diminishing for years.

    The administration has reached an agreement (in principle) with Australia, Argentina and Brazil, but talks continue with Canada and Mexico as part of the NAFTA negotiations.  Discussions are also continuing with EU countries.

    President Trump used his authority to protect “domestic industries critical to national security” as the rationale to impose tariffs of 25 percent on imported steel and 10 percent on imported aluminum.  In recent weeks, Trump has moved to using tariffs — or the threat thereof — as a bargaining chip in broader trade negotiations.  A U.S. delegation is on its way to Beijing for trade talks later this week.

     

  • 27 Apr 2018 by Mark Lohsen

    German Chancellor Angela Merkel’s one-day visit to Washington on Friday, April 27th, includes meetings at the White House and a joint press conference, but is principally focused on business.  There will be no state visit trappings that were afforded French President  Macron earlier this week.

    Chancellor Merkel will be pushing for a permanent exemption for European producers from the tariffs President Trump announced last month.  (The current European exemption from Trump’s steel and aluminum tariffs expires on Tuesday, May 1.)  A bilateral U.S.-German free-trade pact, as proposed by President Trump and rebuffed by Chancellor Merkel, can be expected to be a meeting topic. 

    Also to be discussed is the announcement by a Russian-led consortium of the development of a gas pipeline to Germany along the Baltic seafloor.  It is projected to be completed next year.  The U.S. is concerned it will draw Germany closer to Russia.

    Chancellor Merkel, however, will come away from the visit with one piece of good news:  Richard Grenell received confirmation on Thursday to become the U.S. ambassador to Germany after months of delay.

     

  • 27 Apr 2018 by Mark Lohsen

    Four Saints Brewing Company, Asheboro, NC, has begun brewing Founding Fathers Hemp Ale through a carbon-neutral process.  Four Saints has partnered with Greensboro’s Urban Offsets to offset the carbon produced over the entire brewing process, from sourcing to tapping kegs, with reductions produced by renewable energy and other projects in North Carolina.  

    This is the first carbon-neutral brewing process of its kind in North Carolina and one of the first in the country.  The beer will be released at Raleigh’s Brewgaloo, April 28.

  • 27 Apr 2018 by Mark Lohsen

    China’s President Xi Jinping's signature foreign policy program, the “Belt and Road” initiative was established as an ambitious economic development program to interconnect 65 percent of the world’s population across more than 60 countries.  The initiative, deigned to become a modern “Silk Road,” reinforces China's links to Southeast Asia, Europe and Africa through networks of roads, ports, railways, power plants and other infrastructure projects.

    But a recent report by the US-based research group C4ADS offers alternative perspectives of China's stated purpose of promoting economic development.  Through the analysis of 15 port projects in nine countries funded by China, the report shows that the projects aren't purely driven by "win-win" economic development.  "Rather, the investments appear to generate political influence, stealthily expand China's military presence and create an advantageous strategic environment in the region," it said.

    A network of Chinese sourced maritime logistics hubs throughout the Indo-Pacific, has the potential to change the region's strategic landscape and advance military goals, particularly in locations adjacent to international shipping “choke points.”  The report also notes that debt levels for various projects, especially vanity projects, can prevent countries from pivoting away from Chinese influence in the future.

     

  • 27 Apr 2018 by Mark Lohsen

    Mexico's Senate on Tuesday, April 23rd, voted to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).  Mexico becomes the first of 11 countries that previously constituted the Trans Pacific Partnership (TPP) to approve the pact. 

    Australia, Brunei, Canada, Chile, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and Vietnam signed the deal, which together amount to more than 13 percent of the global economy at a total of $10 trillion in gross domestic product.  Five additional counties will need to ratify the agreement for it to take effect.

    Mexico remains in talks to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and the United States.

     

  • 08 Mar 2018 by Global Chamber

    A sudden announcement of tariffs on steel and aluminum.  Reactions from financiers, economists, and markets.  Subsequent shifts in details, possibly.  American jobs in specific industries will be protected.

    In this highly interconnected world, possible downstream reactions can include:

    • Counter tariffs that can be applied to American goods and services
    • Cost increases in materials used in American manufacturing, raising costs to consumers
    • Rising consumer costs becomes market-wide inflation
    • Protectionism reduces foreign direct investment (FDI) in the U.S.

    More importantly, we must remember that the Great Depression of the 1930s was marked by broadly imposed protectionist trade practices.  These trade barriers contributed to a sharp contraction in trade and contributed to a lackluster recovery being drawn out over a decade.

    Free trade is not always fair trade.  But the World Trade Organization has been operating for more than 20 years and has workable processes to address issues such as dumping.  Regardless, some industries in some countries will lose jobs, and this can be painful.  Governments and companies can invest in job training / retraining to prepare for next generation jobs.

  • 09 Jan 2018 by Global Chamber Charlotte

    2017 was a momentous year for international trade policy.  But not necessarily in a good way.  

    In years past there has been a generally bipartisan U.S. approach to trade policy.  The Trump administration started with a bang and accomplished four major changes to the operation of global trade:

    1. Withdrawal from the Trans-Pacific Partnership (TPP).  Within days of his inauguration, President Donald Trump withdrew the US from this 12 nation negotiation.  TPP negotiations had begun under President George W. Bush and extended beyond a Pacific Rim focus to include corrections to some of the limitations experienced under NAFTA.  China has since offered its Regional Comprehensive Economic Partnership (RCEP) as an alternative and is picking up former TPP partners.
    2. Near-withdrawal from the North American Free Trade Agreement (NAFTA).  A set of confusing and offsetting initiatives commenced in April with one set of Administration advisors calling for the US to withdraw from NAFTA followed by a different set of advisors pushing for further review.  Businesses (and especially NC agricultural communities) then stepped in to force Administration engagement to renegotiate the agreement.
    3. National Security Steel Investigation (Section 232). President Trump ordered a new investigation into whether steel imports harmed U.S. national security. Findings from the investigation were publicly promised for June 30, 2017 but have yet to be released. 
    4. World Trade Organization (WTO) Ministerial Meeting. WTO has been widely viewed as advantageous to the US since its inception after World War II.  This year, President Trump’s principal policy contribution has been a dangerous move to block the appointment of key members of the dispute settlement body.  Then, at the biennial meeting in December in Argentina, the US identified numerous failings of the WTO.  No plan was presented to remedy these failings.

    It would appear that the United States had simply abandoned its leadership role in global trade.

  • 30 Jan 2018 by Mark Lohsen

    On Thursday, January 18th, the World Trade Organization in Geneva announced a ruling on a complaint filed against China regarding tariffs on US chicken imports.  The US originally complained China's imposition of anti-dumping duties of up to 105% and anti-subsidy duties of up to 30% on US broiler chicken products were illegal.  At the time, the US Department of Agriculture said US poultry firms had lost sales of over $1.0 billion. 

    China subsequently lowered the tariffs, but the US held that they were not lowered enough.  This latest ruling supports the US position and requires China further lowering.  China has 20 days to respond.  They have stated that they will assess the WTO ruling and conduct follow-up work in accordance with WTO rules.

  • 18 Jan 2018 by Mark Lohsen

    The first step in forging an improved supply chain is understanding your consumer’s wants, needs, and desires.  Then, work upstream, continuing to the source of all links.

    In the improved supply chain, brands must translate huge amounts of information at the local retail level into hierarchical demand triggers throughout a digitized supply chain, typically crossing international boundaries.  New data analytical / predictive tools are married to diverse sets of time sensitive, local data throughout the chain.  Orders are digitized as transactions between parties to create specific and unalterable block chain records.  Contract Line Items are broken down into specifications, volumes, and schedules and distributed throughout the build process, spurring Internet of Things (IoT) links to produce finished goods.  Local determinants of delivery efficiency, including weather, traffic, and geopolitical factors, are taken into account to minimize disruptions throughout the entire chain.

    This improved system authenticates raw materials, production methods, and avenues of distribution.  Taken together, all participants have a single view of truth that improves contract performance and minimizes disruptions. 

    Are you ready?  Global Chamber, with its partners, can help.

  • 10 Nov 2017 by Global Chamber

    Global free trade agreements primarily benefit countries by eliminating tariffs among its participants.  Additionally, they work to reduce the red tape of non-tariff barriers, such as quotas or export and import license requirements. They also try to address rules that promote the free flow of trade and capital investment.

    With the US departure from the Trans Pacific Partnership (TPP), China has been promoting its Regional Comprehensive Economic Partnership (RCEP) to the ten countries comprising the Association of Southeast Asian Nations (ASEAN), plus six others in the larger region.

    In Latin America, there is the Mercosur (technically a trade bloc) that includes free trade privileges between Argentina, Brazil, Paraguay, Uruguay and Venezuela. This region also features the Pacific Alliance, which covers Mexico, Colombia, Peru and Chile. (This latter agreement covers countries comprising 34 percent of total intra-regional trade within Latin America.) 

    The European Union (EU), which functions as a customs union rather than a trade agreement, enters into its own agreements with other individual countries, including both Canada (with an agreement known as CETA) and Mexico.  Mexico and the EU are now renegotiating their current trade deal to expand it by including some elements more common to recent deals, such as investment, procurement and trade facilitation provisions.

    Watch for information and events from Global Chamber® and our partners for the latest on trade agreements, to find opportunities for your business.

    Mark Lohsen

    Global Chamber® Charlotte

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  • 18 Jan 2017 by Global Chamber Charlotte

    Ms. Krystyna Kielbon is the President and C.E.O. of Il Bella Sole, a company building custom designed, eco-friendly, avant garde furniture. Their furniture and accessories are used in luxury living spaces, amenity spaces, full service hotels, and boutique hotels.

    Ms. Kielbon spent 15 years as a senior executive in the international finance industry and commercial real estate before founding Il Bella Sole. The idea for her business came during a vacation in Sardinia years ago. Krystyna couldn’t keep the sun from glaring off her tablet screen or her face. She realized that most of the resort’s furniture didn’t have adjustable sun shades. Krystyna had an epiphany and soon after designed the elegant and spacious Arabella Chaise shaded lounger. Since her launch of the Arabella collection, she has introduced an extensive product line collection for the hospitality industry.

    Ms. Kielbon was approached to become a member of the Board of Advisors to Global Chamber Charlotte when she and Mark Lohsen, the Global Chamber Charlotte Executive Director, attended an Export seminar hosted by the US Commercial Service. 

    Shortly after accepting the BoA role, Mark learned of Furniture Trade Show opportunity through the Global Chamber’s network of member cities.  Emre Cekemoglu, the Global Chamber Istanbul Executive Director, uncovered an opportunity with the Istanbul Exporters’ Association that was hosting a Furniture Exhibition.  The Exhibition, January 23-26, 2017 draws manufacturers showcasing new products for the emerging industry.  They were offering a limited number of free travel, accommodation, and admission packages to the exhibition.  With quick communications between, Mark, Krystyna, and Emre, a free package was arranged for Krystyna. 

    Krystyna’s latest ventures include outfitting hotels in the United Arab Emirates, so this show offers her an opportunity to see trends, make contacts, and expand her service offerings to her clients.

    Be UNSTOPPABLE, Be part of the TRIBE!

    Mark Lohsen

    Global Chamber® Charlotte

  • 06 Nov 2016 by Global Chamber Charlotte

    For companies establishing commercial ties with European Union (EU) entities, there is a new privacy standard to consider. The EU-US Privacy Shield was adopted by the European Commission on July 12, 2016 and put into effect on August 1, 2016.

    The Privacy Shield guarantees that everyone in the EU has rights when their data is:

    • Collected in the EU by a branch or business partner of an American company
    • Received in the U.S. by an American company
    • Processed in the U.S. by an American company

    The range of this coverage extends from the traditional purchase of goods and services in the United States from within the EU to when using social media or cloud based data storage.  This is particularly important when EU citizens are employed by an American company and their personal data is transferred and used in the U.S. for business management or operational purposes.  Many of these transactions involve personally identifiable information (PII), including such data elements as name, address, phone number, birth date, credit card number, and email address, which is at the core of the Privacy Shield. Note too, that the Privacy Shield protections extend to non-EU citizens with transactions originating in the EU.

    The Global Chamber is prepared to help companies navigate the challenges in establishing business overseas.

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