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US President Donald Trump’s decision to close a tariff loophole used by Chinese firms will cost tens of bns of USD in trade and stunt China’s economic growth, Bloomberg reported on Thursday, citing estimates by Nomura Holdings. The loophole saw certain Chinese firms ship goods in bulk into Mexico and break them into small packages to enter the US in a bid to circumvent duties that are normally applied to larger shipments. Chinese companies — including Temu and Shein — shipped USD 46 bn worth of small packages to the US, with China reporting nearly USD 23 bn worth of these exports last year
The impact: The end of the loophole and introduction of 10% tariffs or more will potentially reduce China’s total export growth by 1.3% and cut their domestic product growth by 0.2%. Chinese e-commerce companies, such as Temu and Shein, which both shipped USD 46 bn worth of small packages to the US, are set to be hard hit.
Panama’s in the spotlight again: The Panama Canal Authority has denied reports that US government ships will be allowed to transit the waterway without paying fees, after the US State Department said it was exempt from charge fees on Wednesday, Reuters reported on Thursday. US President Donald Trump last week called the canal fees “ a complete rip-off ” and called for annexing the canal if the authorities fail to reduce transit fees for US ships.
REMEMBER- US Secretary of State Marco Rubio has demanded that Panama curb China’s influence over the global shipping route — both China and Panama have denied any such influence — or “face immediate consequences” in a conversation with Panamanian President José Raúl Mulino last week. Panama initiated an audit into Hong Kong-based Hutchison Ports last month to confirm adherence to the terms of a 25-year concession awarded to the company, pledging a “severe and strong” financial audit.
FedEx acquires RouteSmart: Delivery giant FedEx has acquired route optimization solutions firm RouteSmart Technologies to increase its operational efficiency and bolster its tech operations, according to a statement released last week. FedEx will combine its physical and data networks with RouteSmart Technologies’ expertise to expedite the integration of common route optimization in its operations. FedEx has been using RouteSmart’s Routing as a Service (RaaS) product for years for its internal FedEx Route Optimization tool, the statement adds.
