In a week that featured the final debate of the UK general election campaign and the first of the US’, there was also focus on trade. The Red Sea crisis continues to weigh on global shipping as vessels are diverted around Africa, while incoming tariffs on Chinese goods may also prompt a rush to import while duties are lower.
We also look at the latest developments in the ongoing trade spat between the EU and China, look back at this week’s election features, include expert insights on NCTS5 and transit procedures, and recall the recent Society of Motor Manufacturers and Traders (SMMT) international conference.
The big picture: Reporting from Reuters earlier this week suggested that the Red Sea crisis is continuing to weigh on shipping, as congestion grows at Singapore’s shipping container port.
A combination of container shortages and logjams at the port are affecting firms’ abilities to stockpile ahead of the end-of-year, peak shopping season. Port congestion is at an 18-month, post-pandemic high, though it’s now the effect of a shipping bottleneck rather than higher consumer demand that’s putting the squeeze on.
Missed sailing schedules and a lower number of port calls are a result of the rerouting of vessels around the Cape of Good Hope, though some analysis cited by Reuters also suggests that a rush to import Chinese goods in the US, before the implementation of new tariffs, could also be contributing to the bottlenecks. Gene Seroka, executive director of the Port of Los Angeles, suggested that this effect would be limited, however, stating that it “is not going to be a deluge”.
Good week/bad week: After months of escalating trade tensions between the EU and China, the two agreed to enter talks aimed at addressing concerns this week.
It marks a change in tone on the issue of cheap Chinese imports in the electric vehicle (EV) sector. China Daily has also reported that the two sides are looking to “expedite” discussions, according to the Chinese Ministry of Commerce spokesman He Yadong.
Less positively, India’s efforts to expand its manufacturing sector stumbled on visa issues this week, as the FT reported that Chinese engineers are struggling to obtain the necessary visas to work in the country.
Pankaj Mohindroo, chair of the India Cellular and Electronics Association, said “the flow of skills critical for the development of the electronics industry has halted”, and that others had stopped applying for fear of being rejected. It follows restrictions imposed by India on Chinese business following the Covid-19 pandemic.
The week in customs: The UK government issued a warning following reports that some firms are deliberately completing customs documents incorrectly, after the introduction of new rules under the Border Target Operating Model (BTOM). Telling traders the practice is a criminal offence, the Department for the Environment, Food and Rural Affairs said that Port Health Authorities have been empowered to take action if the issue persists.
There was another notice from the government on the Customs Declaration Service (CDS), stating that it would be unavailable from 9.30pm on 6 July until 5.30am on 7 July to implement an update to release 4.5.0 of the system. Export declarations will no longer accept Goods Vehicle Movement Service (GVMS) import-only locations as part of a host of changes brought in with the update.
How’s stat: 30c per kilogram – that’s the new tariff rate being reintroduced on Ukrainian eggs imported to the EU following an announcement from the bloc aimed at placating farmers angry at competition from Ukraine.
Quote of the week: “It’s something that needs to be improved if we can. The obstacles are political rather than fundamental.”
Mike Hawes, chief executive of the SMMT, speaking on the UK-EU relationship in his interview with the IOE&IT Daily Update this week.
What else we covered this week: We had a whole range of member-exclusive Trade Explained features this week, exploring NCST5, transit procedures more generally and temperature-controlled supply chains.
With Vietnam in the headlines following the visit of Russian president Vladimir Putin, we examined its trade and politics in a new Country Trade Profile.
There were insights from last week’s Lunchtime Learning webinar session on inward and outward processing, where IOE&IT experts responded to member questions.
Our series on the general election seats to watch looked at the trade figures from both Labour and the smaller parties, including the Liberal Democrats, Reform UK and Scottish National Party.
True facts: Scenes from the Suez Canal visited Peterborough this week, at least according to Sky News.
An 80m-long cargo ship carrying timber from Germany was grounded in the River Nene during low water, creating a blockage that disrupted travel through the waterway for the rest of the day.
The incident drew comparisons to the 2021 Suez Canal crisis, when 400m-long Taiwanese ship Ever Given spent a week obstructing the global trade route.