The Good, the Bad, the Possible and the Ugly

The Good: UK Announces Suspension of Tariffs

On December 9, the UK government advised that it will suspend tariffs that the EU had imposed based on the WTO Boeing decision allowing for retaliation on $4 billion of US products. Once the UK exits the EU, it can make decisions outside of the EU parameters and this move is expected to reduce tensions and encourage a US-UK trade deal. The tariffs could be dropped as of January 1, 2021, but we will confirm final details once known. Furthermore, there is hope that the current negotiations between the EU and USA will lead to further de-escalation of tariffs on both sides. More to follow in the next days and weeks.

The Bad: BREXIT

Speaking of the UK, Prime Minister Boris Johnson is telling his cabinet to prepare for a “no deal” BREXIT. A three-hour meeting today failed to resolve the outstanding issues and Eurasia Group reported that the probability of a deal has been reduced from 60% to 55%. There is still hope, but the decision deadline date is published as Sunday December 13. The UK will also be working on trade deals with the US and Canada. The reports today indicate that the Canada deal has yet to be approved, thus tariffs could come into play in this trade on January 1 unless a deal is reached.

The Possible: CBMA/Craft Beverage Modernization Act

There is a lot of movement on the USA CBMA legislation as it nears its end-of-year sunset. The positive news is that there is a serious chance of obtaining permanence of this important excise tax change, and a wide coalition of associations, including WSSA, are working hard every day to push the legislation forward and gather as much support as possible. The bill could be included in a wider funding bill covering government funding (to avoid government shutdown tomorrow night at Midnight) with an Omnibus bill pending, including COVID relief and possibly CBMA. If not included in this bill, there remains hope of another tax extender package before the end of the year. We will continue to keep you posted on the results as well as the changes as soon as final.

The Ugly:  Port and Terminal Congestion, Equipment Shortages, Delays & Schedule Disruption

What can we say. The global logistics market is a mess. WSSA has been on calls and participating in meetings every day this week discussing the crisis with Albatrans global offices, port terminals, labor, trucking companies, our carriers, and the FMC. The situation is dire in many areas, with the alcohol trades less affected than some. However, if you are trying to export to Asia from anywhere in the world, it is almost impossible to get a booking within the next 4-6 weeks. Carriers are choosing to return empty containers to Asia to deal with the massive surge of exports and capitalize on rates that have skyrocketed, with importers in many countries paying 3-4 times what they paid 6 months ago. Carriers are imposing equipment imbalance surcharges, port terminals are imposing congestion surcharges, and trucks will charge for waiting time as they sit in long lines. It is not expected to get any better in the early months of 2021. Plan for delays, budget for extra costs, and try to be understanding as we all work incredibly hard to get your cargo where it needs to go.  

As always, we will keep you updated as these situations progress. If you have any specific questions on these issues, please feel free to reach out.