While tense trade negotiations between the US and Mexico over the price and quota for U. S. imports of Mexican sugar continue (a happy ending appears unlikely, especially after a Mexican sugar company on Friday called on the government to take action against American fructose producers and protect the local industry from US deals), a new protectionist measure involving sugar half way around the globe was unveiled on Monday when China – the world’s biggest importer of the sweet substance – said it will impose significant penalties on sugar imports following lobbying by domestic mills.
According to the ruling first described by Reuters, up to a third of China’s annual sugar imports will be impacted by an extra tariff for the next three years on shipments that the government said had “seriously damaged” the domestic industry.
The details: China currently allows just over 1.9 million tonnes of imports at a tariff of 15% as part of its commitment to the World Trade Organization. All imports above this amount are slapped with a 50% levy. After Monday’s ruling, the total sugar duty will nearly double, with Beijing imposing an additional 45% tax to these imports in the current fiscal year taking the total to 95%. This will fall to 90% next year and 85% a year later, China’s Commerce Ministry said in a statement. The ruling exempted 190 smaller countries and regions from the new duty, including smaller producers such as the Philippines, Pakistan and Myanmar.
This post was published at Zero Hedge on May 22, 2017.
There can be little doubt now outside of orthodox economics that the global economy is actually slowing, not accelerating as has been predicted. Economists themselves, however, continue to claim that things are getting better when the data strongly suggests otherwise. The latest depressing figures are from a pair of (orthodox) supranational organizations. First, the World Trade Organization (WTO) drastically reduced its estimates for trade growth this year, cutting them sharply from just a few months ago.
The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.
The new figure of 1.7 percent, down from the WTO’s previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.
While it will come as a shock to Janet Yellen’s public face, the WTO specifically cited both of the world’s biggest two economies and not just China as the unrelated ‘overseas’ (from the US perspective) problem. For all the reliance upon the unemployment rate here, there is a shocking disconnect in how supposedly rapid and sustained job growth just hasn’t translated into economic gains accrued anywhere. For an economy at ‘full employment’, there just isn’t any ‘demand’ growth, a fact being felt and described in grim detail especially overseas.
This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 27, 2016.
At a logistics park bordering Shanghai’s port last month, the only goods stored in a three-story warehouse were high-end jeans, T-shirts and jackets imported from the U. K. and Hong Kong, most of which had sat there for nearly two years.
Business at the 108,000-square-foot floor warehouse dwindled at the end of 2015 after several Chinese wine importers pulled out, said Yang Ying, the warehouse keeper, leaving lots of empty space. The final blow came after a merchant turned away a shipment in December at the dock.
‘The client told the ship hands, just take the wine back to France,’ Ms. Yang said. ‘Nobody wants it.’
Pain is increasing among the world’s biggest ports – from Shanghai to Hamburg – amid weaker growth in global trade and a calamitous end to a global commodities boom. Overall trade rose just 2.8% in 2015, according to the World Trade Organization, the fourth consecutive year below 3% growth and historically weak compared with global economic expansion.
The ancient business of ship-borne trade has been whipsawed, first by a boom that demanded more and bigger vessels, and more recently by an abrupt slowing. That turnabout has roiled the container-shipping industry, which transports more than 95% of the world’s goods, from clothes and shoes to car parts, electronic and handbags. It has set off a frenzy of consolidation and costs cutting across the world’s fleets.
This post was published at David Stockmans Contra Corner on April 27, 2016.
The world’s biggest economies are finding it increasingly hard to trade their way out of trouble.
Once the grease of global growth, international commerce failed to rebound completely from the 2009 recession and now is slowing anew. Chinese exports tumbled 5.5 percent in August from a year earlier, while those of the U. S. fell 3.5 percent. South Korea and Singapore witnessed double digit declines.
Reflecting such weakness, the World Trade Organization this week cut its forecast for trade this year to 2.8 percent from 3.3 percent. It acknowledged its new prediction may be ‘over optimistic.’
Such rates fall short of the 5 percent average of the past two decades. Also gone are the 1990s and early 2000s when trade grew twice as fast as economic growth – 2015 is set to be the fourth consecutive year in which the two expand around the same speed.
This post was published at David Stockmans Contra Corner on October 2, 2015.