Urgent FAQs on the New China Tariffs

Q1: What’s new? Starting Monday 9/24, US Customs will collect an additional 10% tariff on $200 billion worth of Chinese-origin imports.

Q2: Just 10%? Is that it? Nope. Starting 1/1/19, this additional tariff will rise another 15%, up to 25% additional tariff (unless negotiations are successful).

Q3: How can we avoid paying this 25%? JMC is working with many of our clients to accelerate their shipment, to arrive before 1/1/19. This can save them the difference (25%-10% = 15% possible savings)

Q4: How do we determine if OUR items are impacted? The list contains 5,745 full or partial tariff lines. Note that there are two parts the list: Part 1 products are fully covered (pages 1-18). Part 2 lists products that are classified in the 8‐digit subheadings of the Harmonized Tariff Schedule of the United States (HTS) that are partially covered by the action (pages 19-31).

Click here for the official list

Contract US truck rate growth to slow, but still climb, in 2019

by William B. Cassidy, Senior Editor, and Ari Ashe, Associate Editor, respectively, for JOC.com | Sep 18, 2018 10:31AM EDT

  US carriers are ordering trucks at record high numbers, but those trucks won’t be built, let alone hit the road, until next year. Drivers will still be hard to hire.

US carriers are ordering trucks at record high numbers, but those trucks won’t be built, let alone hit the road, until next year. Drivers will still be hard to hire.

After rising by double digits in 2018, US contract truckload rates could rise a more modest 5 percent on average in 2019, and swing even farther towards shippers afterward, if the hot US economy begins to cool.

Some industry analysts believe 2019 will be a transition year in which carriers still hold power over shippers, but the grip is loosening and could be lost completely, if economic growth stalls by 2020. Others understand conditions may change eventually, but say a repeat of the freight recession in 2016 is unlikely to happen unless the US economy slumps into recession.

Forecasters also warn shippers that they are merely making an educated guess, so a sound strategy would include paying close attention to spot markets in the next six months. Much depends on the strength of economy in 2019, and whether the balance between truck supply and freight demand swings closer to an equilibrium next year.

Shippers should not set hopes too high

Shippers looking for a return to balanced conditions shouldn’t set their hopes too high, based on currently available market data and projections of US economic growth. Some believe today’s bullish conditions — for truckers, that is — will last longer.

The US economy seems able to absorb capacity faster than trucking companies can add trucks and drivers. US real GDP expanded 4.2 percent in the second quarter and is growing at a 3.8 percent rate in the third quarter, according to the Federal Reserve Bank of Atlanta.

Carriers are ordering trucks at record high numbers, but those trucks won’t be built, let alone hit the road, until next year. Drivers will still be hard to hire.

For every pro-carrier market, however, there is a pro-shipper market — chief financial officers just have to be patient. Often spot rates are a leading indicator on contract pricing and history can teach us valuable lessons on the issue.

In 2014, spot market rates rose more than 25 percent on a year-over-year basis. Growth rates, however,

decelerated to 15 percent by the end of 2014, and into single digits by February 2015. Eventually year-over-year spot rates went negative in June 2015, according to DAT Solutions. In the 2015 third quarter, US real GDP expansion dropped to 1 percent, and to 0.4 percent in the fourth quarter, and remained between 1.5 and 2.3 percent until the 2017 second quarter.

In the contract market, motor carriers secured rate increases in 2014 and 2015, but shippers negotiated freezes and rate cuts in 2016 and early 2017.

The spot market began to recover in March 2017, eventually climbing more than 32 percent year over year this January. Contract rates quickly responded too, growing more than 10 percent earlier this year, and by 20 percent in August, versus a year ago.

Small victory for shippers: spot market rate growth decelerated since January

For shippers, the silver lining is that spot market rates have decelerated since January, ending August up 17 percent higher year over year. DAT predicts rates will grow in the teens through December, then further slow into single digits in 2019.

It will be increasingly hard, even with a healthy economy, to sustain year-over-year increases comparable to those seen in 2018. If history repeats itself, contract rates next year will look like 2015, then flip back towards shippers in 2020.

“There is enough pressure from the economy to continue to push rates higher but at a more moderate pace going forward,” said DAT industry analyst Mark Montague. “When you look at the structural drivers — energy, e-commerce, or general economy — everything says rates will still be higher next year, but there will be moderation in both the spot and contract markets.”

Matthew Harding, vice president of Chainalytics, explains that it’s very difficult to anticipate where the spot market will head because there are too many variables. Some of it is behavioral such as actions to counteract tariffs on Chinese-made goods. It can also be psychological, however, such as retailers panicking about empty shelves this holiday.

“What is most important to us is the differential between spot and contract rates. Coming out of August, our data show there was a 10 percent differential in rates. That 10 percent falls below the pressure that is necessary to continue sustainable growth in contractual pricing,” Harding said.

Based on a seasonally adjusted reading of Truckstop.com’s Market Demand Index, trucking economist Noel Perry thinks capacity has reached an apex, and spot rates will continue to fall, pulling down contract rates in 2019.

“Pricing and profits will stay strong in the contract segment through the end of the year, at least, and perhaps through the end of the 2019 first-half seasonal peak,” Perry said in an Aug. 3 column published on his Transport Navigator website. In early September, however, pricing relief still seems far off.

Broughton Capital economist Donald Broughton has a different view. Rather than being in the ninth year of a recovery, he believes the consumer market is still early in the recovery cycle, with the consumer-led portion of the recovery less than two years old.

“Although the comparisons are extremely difficult in the first couple months [of next year], overall freight shipments and freight expenditures will be higher in 2019 than 2018,” said Broughton, author of the Cass Freight Index and chief market strategist for Freightwaves.

In August, the Cass Freight Index was up 6 percent on shipments, 17 percent on shipper expenditures, and 10 percent on truckload linehaul rates, not showing any inflection point.

Shippers should remember the lessons learned from this year as they negotiate rates in as 2019. Next year won’t be as nasty as 2018, according to Andrew Lynch, president of Zipline Logistics, a Columbus, Ohio-based third-party logistics provider, but he also doesn’t “see freight markets plummeting back to where they were in 2016 for a very long time.”

Chinese-Made Air Conditioners, Food, Furniture, and Toys Part of Trump's $200 Billion Tariff List

By GLENN FLEISHMAN for Fortune.com on September 17, 2018

Boats, TV sets, and cooper are among the list of imports covered by $200 billion in new tariffs against China that the Trump administration announced Monday. The list is a lengthy grab bag of several hundred items, including large categories of consumer and bulk food, raw chemicals, and metals used in industry, personal-care items like perfumes, mattresses, toys, and much more.

This addition brings tariffs to about half of all goods imported from China to the U.S. Tariffs increase the cost of goods to U.S. buyers, and lead to higher prices for the same items from domestic producers and imports from countries that have avoided tariffs.

The surcharge starts at 10% later in September, and jumps to 25% by the end of 2018.

An anticipated and preliminary list of possible products appeared in July. The final list released today removed 300 items that include smartwatches, bike helmets, children’s playpens, some chemicals, and health and safety devices.

President Donald Trump said he imposed the tariffs to pressure China on business tactics that he said unfairly disadvantage American businesses. At the White House on Monday, he said the U.S. trade gap with China—the net between imported and exported goods between the two countries—was too large, and “We can’t do that anymore.”

A previous $50 billion round of tariffs imposed on Chinese imports largely affected products used by American manufacturers in producing goods. China imposed about $34 billion in retaliatory import charges.

The new $200 billion round directly imposes a surcharge on consumer electronics, kitchenwares, tools, and food. China has previously stated if America imposed this new larger set of taxes, China would place tariffs on American imports that total $60 billion.

So far, economists have found no broad negative or positive effect from earlier tariffs imposed on China, and on aluminum and steel imports from several countries. The effects are noticeable in particular categories, however. The price of washing machines in the U.S. increased 20 percent following tariffs on metal imports, and all appliances on average jumped 7%, for example.

The U.S. Treasury had invited Chinese officials, including President Xi Jinping’s top economic adviser, to attend talks in Washington this week. But a deputy to that adviser said at a meeting on Sunday that China would not negotiate with the U.S. under pressure. No talks are currently scheduled.

A government collects tariffs as a form of import tax. Tariffs can be effective in narrow cases to offset government subsidies that create cheap exports to the U.S. and others to boost economic growth, a practice sometimes called “dumping,” or to protect endangered domestic industries that have national or cultural importance. Canada, for instance, imposes high tariffs on some imported dairy products as part of price supports for its farmers. But tariffs are also used as a trade weapon, in which a country heavy on imports, like the U.S., attempts to use the surcharge to force policy changes that diplomacy has failed to reach.

The World Trade Organization, to which both the U.S. and China are parties, has a complaints process that can allow the imposition of tariffs if the party claiming unfair trade proves its point, and the offending nation doesn’t change its policies. The Trump administration has bypassed the WTO on its tariffs, however.

The vast majority of economists say that tariffs increase the cost of goods to companies and consumers without a meaningful improvement for domestic industries that benefit from reduced competition, because the higher prices subsequently charged reduce demand.

The United States is now the largest global crude oil producer

Principal contributors: Candace Dunn, Tim Hess on SEPTEMBER 12, 2018, for the U.S. Energy Information Administration


The United States likely surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer earlier this year, based on preliminary estimates in EIA’s Short-Term Energy Outlook (STEO). In February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999. 

Although EIA does not publish crude oil production forecasts for Russia and Saudi Arabia in STEO, EIA expects that U.S. crude oil production will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019. 

U.S. crude oil production, particularly from light sweet crude oil grades, has rapidly increased since 2011. Much of the recent growth has occurred in areas such as the Permian region in western Texas and eastern New Mexico, the Federal Offshore Gulf of Mexico, and the Bakken region in North Dakota and Montana. 

The oil price decline in mid-2014 resulted in U.S. producers reducing their costs and temporarily scaling back crude oil production. However, after crude oil prices increased in early 2016, investment and production began increasing later that year. By comparison, Russia and Saudi Arabia have maintained relatively steady crude oil production growth in recent years. 

Saudi Arabia's crude oil and other liquids production data are EIA internal estimates. Russian data mainly come from the Russian Ministry of Oil, which publishes crude oil and condensate numbers. Other sources used to inform these estimates include data from major producing companies, international organizations (such as the International Energy Agency), and industry publications, among others.

Legacy Classic shifts sourcing to Vietnam

by Thomas Russell for Furniture Today. Published on September 14, 2018

HIGH POINT — Case goods resource Legacy Classic Furniture is adjusting its China-based sourcing model due to the threat of tariffs as high as 25% on furniture shipped from China.

The company recently revealed it has lined up new sourcing partners in Vietnam to produce its bedroom, dining and occasional collections as well as standalone bedroom and dining sets and bedrooms in its LC Kids line.

Earlier this summer when tariffs were first announced on mostly component types of product vs. finished goods like furniture, the company initially planned to introduce four bedrooms from Vietnam in the fall.

However, when it became apparent that furniture was in the crosshairs of an estimated $200 billion in additional proposed tariffs ranging from 10% to 25%, the company decided to shift all its sourcing for both Legacy Classic and LC Kids. Legacy is moving all new and inline product to the Vietnam factories, with production expected to begin in December.

For years, the company’s line was produced in China at Lacquer Craft Manufacturing Co.’s Shanghai-area factory. Lacquer Craft is the manufacturing arm of Legacy Classic owner Samson Holding, which also owns Universal Furniture and Craftmaster.

Legacy Classic President Don Essenberg said the company will source from four or five plants in Vietnam, which he declined to identify at this time. As part of the transition, he noted that the company will use the same finishing suppliers — AkzoNobel and Sherwin-Williams — it has used previously.

“I am confident that as far as our customers and consumers are concerned, this transition will be seamless,” he said, adding that the product will be built to the same specs, designs and finishes. “The product strategy doesn’t change; the only thing that changes is the source country.”

While Vietnam has lower labor costs than China, the impact on finished goods won’t be known right away. Legacy’s line currently falls within middle price points, with beds retailing around $599 to $699.

“We really have to get into the factories to see how things work,” Essenberg said, adding that the product will be phased into the factories production schedules. “Our goal is to start production this year.”

Five things to know about the Chicago hotel worker strike

 Workers picket in front of hotels around the city of Chicago. (Chicago Tribune)

Workers picket in front of hotels around the city of Chicago. (Chicago Tribune)

by Alexia Elejalde-Ruiz, a Contact Reporter for the Chicago Tribune. Published on September 11, 2018, at 12.45pm

A strike currently affecting 26 downtown Chicago hotels is the first broad hotel strike the city has seen, according the union that called for it.

It started Friday and, the union says, will go on until the hotels agree to its demands.

Here are five things to know.

Who is striking?
Hotel workers — housekeepers, doormen, cooks, bartenders, room service attendants and more — whose contracts expired Aug. 31 are on strike. The union that represents the workers, UNITE HERE Local 1, says that 6,000 workers are covered by those expired contracts, though it isn’t clear how many people have actually walked off the job.

Which hotels are affected?
Workers are on strike at 26 downtown Chicago hotels, including the JW Mariott, the Palmer House Hilton, the Hyatt Regency and the Sheraton Grand. The strike began Friday at 25 hotels and workers at a 26th hotel, the Cambria Chicago Magnificent Mile, walked off the job Monday. The expired contracts cover 30 hotels, and the four not yet striking are in labor disputes and could join, the union says. A list of affected hotels is at chicagohotelstrike.org.

Why are they striking?
The primary demand of the striking workers is to include a guarantee of year-round health insurance in their new contracts. Currently, many hotel employees lose their health insurance when hotels temporarily lay people off during the slow season, generally October through March, and have coverage reinstated when they are brought back to work when the weather warms. Though workers with seniority are employed year-round and get insurance year-round, the union wants all employees, regardless of tenure, to have uninterrupted health insurance, even during the slow months when they are not working at the hotels.

How does this get resolved?
The union negotiates contracts with each employer separately. So theoretically, if an agreement is reached with one of the hotels the workers from that hotel could cease to strike. But labor expert Bob Bruno said that the most efficient and effective strategy is to get one of the larger employers to establish a baseline agreement on the issue that other hotels in the city will follow.

“The incentive (for the union) is to create a standard for the industry,” said Bruno, labor professor at the University of Illinois at Urbana-Champaign. “And the employers gain some value on that too because they know they’re not competing on the basis of cost.”

Three major hotel groups comprise the bulk of the hotels where workers are striking. Hilton Hotels and Resorts manages the Palmer House, the DoubleTree Magnificent Mile, Hilton Chicago and the Drake hotel. Hyatt Hotels manages the Hyatt Regency Chicago, Hyatt Recency McCormick and the Park Hyatt. Marriott International’s portfolio includes the Westin River North, Westin Michigan Avenue, W Chicago Lakeshore, W Chicago City Center, JW Marriott and the Sheraton Grand.

What is the response from the hotels?
Hotels have been assuring guests that they are open for business and will continue to provide excellent service. But some guests have reported eight-hour waits to check in, long lines at breakfast and having to replenish towels themselves because there are not enough people to clean rooms. Managers have said they are rolling up their sleeves to empty out garbage bins and refill soaps.

Hotels have expressed frustration that the strike came so early in contract negotiations. Marriott, for example, said the union is still in the process of making its initial bargaining proposal.

“There is nothing about the current state of the negotiations or the longstanding and productive bargaining relationship between Marriott International and UNITE HERE that suggests that a strike is warranted or necessary,” Marriott said in a statement. “The parties are not at an impasse on any issue.”

Marriott, Hyatt and Hilton have all said they continue to bargain in good faith.

How Shipper’s Interest Cargo Insurance Benefits the Transportation Intermediary

By Anthony Nunziata and Tom Moran for Roanoke Trade | Published June 22, 2018


It probably comes as no surprise that Shipper’s Interest Cargo Insurance benefits cargo owners. This policy is an effective risk management solution that transfers the risk of loss or damage to goods from the cargo owner to the insurance company. What may not be so well known is that Shipper’s Interest Cargo Insurance can benefit transportation intermediaries as well. By procuring Shipper’s Interest Cargo Insurance for clients, transportation intermediaries add a level of protection against gaps in a carrier’s motor truck cargo policy and financial risks including those resulting from contractual liability claims. Procuring insurance on their clients’ behalf can also serve as a tool to enhance client relationships.In order to evaluate how a cargo insurance program can benefit your organization, it is important to understand a few basic principles.


How Shipper’s Interest Cargo Insurance Works

When a loss to goods in transit occurs, a cargo owner has limited options to recover their financial interests.
They can issue a claim against a Shipper’s Interest Cargo Insurance policy, the carrier who had possession of their goods at the time of loss or the transportation intermediary who arranged the shipment. Of these three choices, filing a cargo insurance claim is by far the best option both for the cargo owner and for the transportation intermediary. Subject to specific exclusions, the Shipper’s Interest policy provides door-to-door coverage against all risks of physical loss or damage. In the event of a covered loss, the cargo owner is not required to prove carrier negligence and they will not issue a claim against you as the transportation intermediary. Shipper’s Interest Cargo Insurance is a “first party” insurance product; therefore the cargo owner is reimbursed for their covered losses directly by the insurance company. Because the cargo owner does not have to prove negligence or take legal action, potential conflicts are avoided and the shipper’s relationship with the intermediary who provided the insurance is preserved.


Details Matter

As a transportation intermediary, it is important to recognize that Shipper’s Interest Cargo policies are not boilerplate and they may differ significantly, especially in regard to limits, deductibles and exclusions. Special insuring conditions may apply to certain commodities such as household goods, servers on racks and fragile items. Certain perils such as improper packing, delay and inherent vice, may be excluded from coverage entirely. Transportation intermediaries should consult a competent insurance broker to guarantee that the product purchased is appropriately structured and priced for the intended use. Additionally, it is recommended that the intermediary require the cargo owner to accept or decline Shipper’s Interest Cargo Insurance in writing and proactively educate them regarding limits of liability which may apply in the event that insurance is not purchased. Another point for the transportation intermediary to consider is that a certificate of Motor Truck Cargo (MTC) Insurance will frequently fail to accurately and comprehensively convey the terms of the underlying asset-based carrier’s coverage. The standard Acord Certificate of Insurance does not provide details regarding policy exclusions or deductibles which may significantly impact a cargo owner’s ability to collect on a claim. Additionally, coverage may be terminated without notification to the transportation intermediary subsequent to the issuance of the certificate. Some unscrupulous carriers have even been known to present intermediaries with fraudulent certificates evidencing coverage which never existed. If unable to collect from the underlying asset-based carrier or the carrier’s motor truck cargo policy, a cargo owner who suffers a loss may even pursue a claim against the transportation intermediary. Even though this claim may not be supported by any prescribed statutory or contractual liability, the intermediary will need to engage legal counsel if a suit is filed and the client relationship is certain to be damaged. By providing the cargo owner with access to Shipper’s Interest Cargo Insurance, the transportation intermediary can avoid any potential liability resulting from the failure of the underlying carrier to answer a MTC insurance claim.

A Sound Investment

Shippers Interest Cargo Insurance is the broadest form of coverage available to address cargo loss or damage in transit and costs a fraction of a percent of the cargo value. When purchased, Shipper’s Interest Cargo Insurance guarantees that the cargo owner will be made whole by the insurer for losses or damages that fall within the policy parameters. Taking advantage of the opportunity to procure Shipper’s Interest Cargo Insurance for their cargo owner clients, provides astute transportation intermediaries with a tool to enhance client relationships and avoid potential liability claims.

How America’s motels became hipster havens

by a JLL Staff Reporter for JLL.com
published on 30 August 2018


In the heart of Palm Springs, a once nondescript Howard Johnson motel with an on-site Denny’s restaurant is now the Ace Hotel & Swim Club, replete with outdoor fireplaces, live music by the pool, a vintage photo booth and Middle East-meets-California fusion dining.

The Drifter, once a rundown, dodgy edifice in New Orleans, now offers specialty coffees from La Colombe and poolside craft cocktails for guests staying in minimalist-style rooms.

The Vagabond in Miami, a former dive motel built in 1953, today has rooms with hypo-allergenic Italian bedspreads and stenciled geometric wall art.

Across the United States, hoteliers and developers with an eye for a great location and an affinity for Americana are buying fifties and sixties-era motels and giving them top-to-toe revamps, while making sure they retain the retro aesthetic that attracts style-savvy travelers. The trend has picked up so much steam that it has transformed the very notion of a motel – from one of a pit stop to one of a destination.

“These projects have removed the stigma of the motel experience,” says Geraldine Guichardo, VP of Americas Hotels Research at JLL. “There is no longer the assumption that all motels are degraded properties you pass on the road. The idea around the motel is now enhanced.”

A formula for success

The motel — a word which fuses “motor” and “hotel” — used to be the no-frills mainstay of the weary and budget-conscious road-tripper. As modern hotel brands have reclaimed these uniform spaces, a fairly universal approach has emerged. Designers tend to keep the overall architecture and trademarks of the building intact – as well as the exterior corridors, motor courts and small swimming pools. They often throw in a neon sign or two, so the establishment screams “hip vintage.”

But successful moteliers also include the necessary upgrades demanded by the traveler, Millennial or otherwise, who likes the idea of staying somewhere unique but doesn’t want to sacrifice comforts like high-thread-count sheets and fair-trade coffee.

In Napa Valley, for example, the Calistoga Motor Lodge — formerly the Sunburst Motel — fits right in with the aspirational vibe of the area, which is known for its Michelin-starred eateries and bountiful vineyards. Its grounds include three soaking pools, filled with water from local geothermal springs. The amenities range from a mix-your-own mud bar in the spa and pour-over Equator coffee in the rooms.

“In a market like Napa, a place like the Calistoga Motor Lodge makes sense,” says Guichardo. “A motor lodge with a spa that complements the vineyards and the wine experience — travelers want that quaint, simple, retro experience.”

Placemaking potential

Location is key to the success of any revamp. “When you have a market that is undergoing a real estate transformation, motel developers have the opportunity to be part of the market’s evolution and can benefit from the anticipated additional demand the market will observe,” Guichardo says.

The Vagabond Hotel in Miami, for example, sits on Biscayne Boulevard (which runs off from historic Route One), a stretch known for its craft breweries and art galleries. As a consequence, the Vagabond draws in design-savvy travelers.

For hoteliers considering a substantial makeover of an existing motel property, seeing thriving adjacent properties, both residential and commercial, “offers some level of assurance,” Guichardo says.

“If they see new restaurants coming in and multifamily complexes going up, with residents who have guests from out-of-town who can stay at the local motel, it makes sense for a hotelier to follow suit and create a new lodging product that’s in line with the cool feel of the neighborhood,” she says.

But it can also go the other way. Some hoteliers take these renovations to the next level by simultaneously sprucing up retail or restaurant properties in the immediately adjacent area, creating, in effect, a hip district.

More money, more problems

Despite the success seen by a number of these new motels, Guichardo says that, like every incipient trend, this one has its challenges. In order to reap the desired profit from their makeovers, many hoteliers need to charge rates that are double or even quadruple the rates of the original motel. Certainly, if a motel’s prices rise from $69 a night to $169 to pay for all the sophisticated touches, some travelers may elect to stay at a recognized hotel brand instead, a place where they know what to expect.

Investors entering the space need to be sure there is enough demand from cash-rich, minimalist travelers. Market research is key to understanding what visitors to an area value, Guichardo says.

Developers should also be cautious of focusing too squarely on Millennials, Guichardo says. While they “make up a considerable proportion of the lodging demand and are known for prioritizing experiences,” Millennials too are pairing off and having families. This may lead many to seek a more conventional hospitality experience.

While there are clear hurdles to a successful revamp, it’s clear the mass perception of a motel stay has changed, and more roadside eyesores will likely go the way of the Ace.

“They’re no longer a place where you pull up blindly after a night of driving,” says Guichardo. “Motels are a place you may want to consider far ahead of time, while planning a vacation. Some are so popular, there’s a waiting list.”

Higher bonds needed for tariff-hit US imports

  The United States Custom House in New York

The United States Custom House in New York

by Eric Johnson, Senior Technology Editor of JOC.com on Aug 13, 2018

Importers may be unaware that they need to increase the level of the bond they must maintain with US Customs and Border Protection for duties due to be paid over a 12-month period.

There’s a secondary impact to the recent imposition of tariffs on certain goods that US importers are likely overlooking: the need to increase the level of what’s known as a continuous bond, which covers a defined percentage of the projected amount of duties, taxes, and fees an importer is expected to pay over a 12-month period.

Failure to maintain a sufficient bond can hamper importers’ ability to get their cargo released at US ports and cause importers to incur demurrage, since US Customs and Border Protection (CBP) can direct shipments with an insufficient bond to be held. The increased bond requirements are also taxing the balance sheets of small and mid-sized importers.

Experts in this field told JOC.com this week that the tariffs assessed as part of the Section 301 and Section 232 actions by the Trump administration this year compel importers to recalculate their estimated exposure to duties. In some cases, that means an importer might need to increase its bond level by 20 to 100 times what it is today. And there’s evidence that CBP is increasing its watchfulness of importers not meeting their bond requirements, with one source saying that from June to July, CBP tripled the number of notices it sent to importers with insufficient bonds.

The import bond is required for all companies importing goods into the United States, with CBP having set the continuous import bond amount at 10 percent of those estimated duties, fees, and taxes. The amount of a continuous bond is not based on the value of the goods themselves.

So, for instance, an importer that expects to pay $1 million in duties, fees, and taxes over the course of a year would need to secure a continuous bond of $100,000. Generally, such a bond automatically renews on an annual basis, unless the importer, or the importer’s customs broker, determines that the importer’s exposure to duties, fees, or taxes will increase or decrease. That calculation could come as a result of lower or higher expected import volume, or a change in the duties applicable to that volume.

Tariffs increase the amount of duties payable

The tariffs assessed earlier this year — from the 232 tariffs applied to steel and aluminum imports to the 301 tariffs applied to certain imports from China — by definition increase the amount of duties payable. And that can have a significant impact on importers from a couple different perspectives.

“On the steel tariff, we had one bond that went from $200,000 to $5 million,” said Colleen Clarke, vice president at Roanoke Insurance Group, which provides transportation-related surety bonds and insurance for the international trade community. “Another steel importer had a $200,000 bond and we have estimated they’ll now need an $11 million bond.”

First, those higher bond amounts translate into higher continuous bond premiums, a straight cost increase. Shane Garcia, owner and vice president of the Houston-based customs broker RW Smith, estimates that the cost of an annual premium might increase from $500 to $15,000 as a bond increases from say, $50,000 to $5 million.

But potentially more impactful is that importers often need to provide some collateral — generally a letter of credit — when the bond amount increases so substantially. That increased bank exposure can significantly hamper the finances of a small to mid-sized importer.

“It’s not just the bond premium, which is nominal in relation to the bond amount, it’s the underwriting and potential collateral requirements,” Clarke said. “It takes away from their available line of credit with their banks, and that might inhibit their ability to grow. That could happen.”

The increases in premiums are not necessarily linear with the increase in bond requirements, so a bond requirement that rises 20-fold wouldn’t translate to a 20-fold increase in premiums. Sometimes the premium rate goes down relative to the size of the bond, sometimes it goes higher — it’s largely dependent on the surety’s assessment of the importer’s ability to pay, a risk calculation. That goes back to whether the importer has a strong enough balance sheet or the cash balance to back the increased bond.

Cargo fluidity implications — CBP can hold cargo at the port

There are also cargo fluidity implications. If CBP deems a bond to be insufficient, it can hold cargo at the port of entry. Not only does that stymie an importer’s ability to get its cargo, the held cargo can also incur demurrage fees, Garcia noted. If the bond is deemed insufficient, CBP can inactivate the bond (which is essentially a three-party contract between the importer, customs, and the surety) and require importers to obtain single transaction bonds.

Those bonds, unlike continuous bonds, are in an amount of the total value of the shipment, including duties, fees, and taxes. They are primarily designed for infrequent importers and are also prohibitively more expensive than continuous bonds.

Clarke, who also currently serves as president of the International Trade Surety Association, said that in July CBP sent 183 letters to importers notifying them they had insufficient continuous bonds, a sign that enforcement of the bond levels is rising. In the months prior, that number had been around 50 to 60, she said.

“It is trending up, and certainly in the next few months it will trend higher,” Clarke said, alluding to pending tariffs due to be assessed on as much as $200 billion in goods from China as part of the next round of Section 301 tariffs.

But Garcia said it’s part of a wider ramp up by CBP with regard to continuous bonds.

“Customs has gotten more intense that importers have the correct bond in the last 18 months,” he said. “They’ve been more enforcement-minded, and then the rates go up, so importers are getting a double whammy.”

Garcia said that importers — even those mindful of the tariffs — often don’t link those increased duties to the impact they have on the bond they need to maintain.

“In general, they have no idea,” he said. “The ones that might have an idea are involved in antidumping cases, so they may be aware of it. Other importers may be very sensitive to the news and tariffs — I get calls all the time, ‘do you know what’s going to be on the list out of China?’ — but for some reason, they don’t correlate that to what the bond’s going to be.”

Part of the issue, Garcia said, is that the bond typically auto-renews, so it’s a case of “out of sight, out of mind.”

Another issue is that many importers — particularly those bringing in steel or aluminum products from Canada, Mexico, or other countries where there’s an existing free trade agreement with the United States — have the minimum continuous bond level, $50,000. Even if a company assesses that all its goods will enter duty-, tax-, and fee-free, CBP still mandates it maintain a $50,000 bond.

The tariffs are impacting these importers the most, since they’ve gone from a minimum bond based on zero duties, taxes, and fees to potentially multimillion-dollar bonds that need to be calculated at higher rates of duty every time new tariffs are enacted.

Customs brokers — a key role

Customs brokers play a key role in this process. Sureties tend to work directly with brokers, not the importers, who then alert their customers about the potential for an insufficient bond. Proactive sureties and brokers do this preemptively, particularly since importers are not always proactive about maintaining adequate bonds themselves.

There are other wrinkles to the issue as well. Bond requirements start accumulating — or “stacking” — when importers bring in goods that are affected by anti-dumping or countervailing duties. Those cases often take the US Commerce Department more than 12 months to decide, so multiple bond periods remain exposed until the cases are decided.

“That’s because of the length of time it takes to liquidate entries subject to anti-dumping cases,” Clarke said.

The bond issue is likely to escalate in the coming months as importers across a range of sectors determine whether the additional $200 billion in tariffs from China affect their goods. The second tranche of tariffs under the original China tariff enforcement, affecting $16 billion worth of Chinese goods, is also due to go into effect Aug. 23.

Expect peak shipping season to be tougher than ever, experts warn



by Michael Angell for FreightWaves.com

Perfect storm of tight supply, strong demand hits shippers 

As shippers enter their peak season, they face a steeper and tougher peak to climb than in seasons past.

The U.S. economy remains on one of its best trajectories in years, leading to higher demand from consumers. The demand is butting up against tight transportation supply, especially for trucking. As a result, intermodal freight likely will become an increasingly popular option during the peak season.

A panel of freight industry experts delivered this message during last Thursday’s “Navigating New Realities: Peak Shipping Season Intermodal Outlook” webinar hosted by American Shipper. Patrick Duffy, research director at American Shipper, said this peak season stands out for “particularly daunting conditions: surging imports, perhaps to beat tariffs; reductions in carrier service due to consolidation; GRI (general rate increases); and bunker surcharges.”

“As trade rhetoric continues to grow negative and trucking capacity remains tight, you have beneficial cargo owners and forwarders shipping earlier this year and wondering whether they will have to rely on air cargo to fill their shelves,” Duffy said.

Webinar panelist Ibrahiim Bayaan, chief economist at FreightWaves, said this year’s peak shipping season comes against the backdrop of a robust U.S. economy.

U.S. gross domestic product grew 4.1 percent on an annualized basis in the second quarter, “one of the strongest quarters since the recession,” Bayaan said. While annualized GDP growth once hovered closer to 2 percent to 2.25 percent, “we have been able to exceed those levels over the past several quarters, particularly this year because of some policy changes.”

The U.S. economy “is in a different state than it was four or five years ago,” he added.

Other economic indicators also are strong and accelerating. Bayaan noted that retail sales plateaued last year, especially after a series of hurricanes hit the U.S. Southeast and Gulf Coast. But low unemployment and high consumer confidence are pushing retail sales up 6 percent this year. Retailers, though, are still keeping their inventories lean, with the U.S. inventory-to-sales ratio falling from the high levels of the second half of 2016.

“You have this combination of low inventories and high demand, which means inventories have to be replenished and sent out again,” Bayaan said. “This lean inventory is positive for the transportation industry, but it does put pressure on carriers to do things in a timely fashion.”

Of course, more of those goods are moving through ports, and FreightWaves’ data platform SONAR points to shippers having started their peak shipping early. Bayaan said the inbound tender volume index for shipments coming through Los Angeles peaked at over 189 in July before settling at its current level of 175. The San Francisco inbound tender index hit a 121 level in June before settling to its current 98 level.


“Everything is pointing to a very strong peak season as far as freight,” Bayaan said.

The increase in inventory replenishment, along with shrinking truck capacity due to electronic logging device and hours-of-service mandates, has pushed up producer prices for trucking 11 percent year-to-date, Bayaan said. Meanwhile, the pool of commercial drivers has not kept up, with 2 percent growth this year.

“It feels like the U.S. economy is running out of excess capacity,” Bayaan said. The United States is “producing as much as we have capability to produce.”

Steve Golich, executive vice president & COO of Alliance Shippers, one of the largest privately held intermodal marketing companies in the United States, echoed that trucking capacity is tighter than it’s been in a while because of the ELD and HOS mandates.

For example, moving a trailer from the Chicago rail ramp to auto industry customers in Michigan used to take one day. But the new mandates mean “a driver cannot make that turn in a day. We are paying a driver for two days as opposed to one.”

That is when you can find a driver. Golich noted the aging workforce, with the median age of commercial drivers now in the mid-50s. Better pay and lower barriers to entering the profession help, but “we are behind the eight ball in truck driver capacity.”

The upshot for Alliance is that “we are not on edge looking for new business as much as trying to maintain and protect the business we have today,” Golich said.

Tom Williams, group vice president of consumer products for BNSF, said overall intermodal volumes are up in the mid-single-digit range this year, which he said is about the seasonal norm.

“We are not seeing a trend that suggests overall that the peak season is earlier this year,” Williams said.

But demand for ocean containers is creating a “shift between what moves intact in ocean containers and what gets transloaded in domestic containers.” He said there is increasingly tight demand for shifting 20- and 40-foot containers into domestic 53-foot containers for intermodal rail.  

“Transloading is really busy right now,” Williams said.

While e-commerce was expected to chiefly benefit trucking, Williams said intermodal rail also is playing an important role as more containers move to inland fulfillment and distribution centers. New analytic and tracking tools also are providing e-commerce vendors better tracking capability for intermodal rail.

“Intermodal is a very good solution for evolving supply chain needs,” Williams said. “The proliferation of e-commerce in retail might be seen as a headwind for intermodal, but intermodal is every bit as effective as it is for brick and mortar.”

In response to growing intermodal demand from e-commerce, BNSF is adding hub capacity in Southern California, which remains the epicenter for Asian imports into the United States. BNSF also is looking at container-handling technology such as what OOCL installed at its Long Beach terminal.

It’s not too late to hear what the experts had to say during American Shippers’ webinar, “Navigating New Realities: Peak Shipping Season Intermodal Outlook.” Replay the webinar here (https://www.americanshipper.com/main/checkemailinxpo.aspx?fdid=802f8d24-ddad-413c-af49-389a1d09f129?source=Slider).

Container shipping dysfunction delivers US peak season chaos

  Higher than usual fuel prices and tit-for-tat tariffs have exacerbated the chaos on the eastbound trans-Pacific this peak season, but the problem started earlier this year, and there is one causal factor as the source of the problem. (Above: A container ship approaches the Port of Los Angeles.)

Higher than usual fuel prices and tit-for-tat tariffs have exacerbated the chaos on the eastbound trans-Pacific this peak season, but the problem started earlier this year, and there is one causal factor as the source of the problem. (Above: A container ship approaches the Port of Los Angeles.)

by Mark Szakonyi, Executive Editor of JOC.com

This isn’t working. Higher-than-usual fuel prices and tit-for-tat tariffs have exacerbated the chaos on the eastbound trans-Pacific this peak season, but the real blame falls at the feet of the container shipping industry.

Capacity is so scarce on the eastbound trans-Pacific that US importers from Asia, both large and small, have to pay in some cases $400 to $600 above already higher-than-usual rates to get space on ships. Thousands of containers are being rolled, as ocean carriers prioritize higher paying spot cargo — more than $2,000 per FEU to the US West Coast and $3,000 to the East Coast — in favor of lower-priced contracted cargo. And some shippers complain that their minimum quantity commitments, or MQCs, aren’t being honored.

Things aren’t much better on the landside. Trans-Pacific reliability is hitting as low as 35 percent and, coupled with rail delays and chassis accessibility issues, it’s virtually impossible for beneficial cargo owners (BCOs) and trucking companies to plan their pickup and delivery schedules with any degree of accuracy.

This is the price the industry pays for its inability to reach a level of stability where container lines can make enough money from rates to cover their operating costs, much less turn a profit. In return, BCOs would theoretically receive the level of service they need to ensure their store shelves are stocked and manufacturing inputs delivered so they don’t have to carry unneeded inventory.

Peak-season woes were sown in the spring

The seeds of peak-season woes were sown in the spring when carriers entered the contracting season with hopes for meaningful price increases in annual service contracts. Instead, they left negotiating tables with contracts running from May 2018 through April 2019 generally in the range of $1,100 to $1,200 per FEU to the West Coast and $2,100 to $2,200 per FEU to the East Coast, a $100 decrease on both routes compared with how contracts ended the year prior.

Then bunker prices started to climb in April, with the August 2018 average price per metric ton of IFO 380 up 19 percent from April, 44 percent higher than in August 2017. The rise in fuel prices caught carriers unaware, with some working to recoup additional costs not captured through the bunker fuel adjustment via emergency fuel surcharges.

With their largest operating cost up even higher, a reluctance to pay even more to speed up ships, and concerns about a tariff impact, carriers reworked their trans-Pacific networks, resulting in a reduction of capacity to the West Coast by close to 7 percent and 1.6 percent to the East Coast.

At the same time, US importers concerned about the next round of potential tariffs began rushing their peak-season shipments earlier only to meet the reality of having fewer slots available. Carriers’ sympathy of their plight goes so far. Carriers’ frustration with how contracting ended lingered, and they are still eating higher bunker fuel prices, which, coupled with lower than usual rates, pulled several carriers to a loss in the second quarter. Those losses sting even more after the container shipping industry was showing signs of a recovery,

having made a profit ($7 billion) in 2017, for the first time in six years.

Carriers — now managing capacity ‘in a disruptive way?’

“Current capacity and demand are being manipulated by carriers to force price increases they were unable to get commercially,” said Mark Laufer, president and CEO of Laufer Group International. “Given the likely downturn in economic activity from [the fourth quarter] due to the negative effects of tariffs, it is hard to see how rates will be sustainable over the long run.”

Laufer added that amid the threat of an economic slowdown, the only option for carriers is to manage capacity “in a disruptive way to achieve any kind of compensatory rates,” and that holds particularly true as they face higher trucking and bunker fuel costs.

“Sometimes no space means no space,” said Allen Clifford, executive vice president of Mediterranean Shipping Co. Although some shipments are shut out of some voyages at Asian ports, this is not by intention. “We take no pleasure in turning away any client’s cargo. We are in the service business, and we are here to serve our partners,” Clifford said.

Amid these glaring signs of industry dysfunction, there is a creeping realization that shippers will have to pay more beyond just higher bunker adjustment factors. Encouragingly, there are real signs in the market of carriers delivering better service for higher prices and of shippers and carriers agreeing to enforceable contracts.

In the inaugural sailing of its expedited trans-Pacific service guaranteeing chassis availability, APL said 70 percent of the local cargo discharged at the Eagle Marine Service terminal in Los Angeles was available for pickup within four hours of unloading and the rest of the cargo was available by day-end.

The chaos endured by US importers this peak season will also encourage more of them to check out the New York Shipping Exchange (NYSHEX) to guarantee that their cargo will ship for the sailing they booked — with the carrier facing a penalty if it fails to do so. Conversely, shippers face a fine if they fail to deliver the cargo they booked via the platform. To meet that demand, Maersk Line for the first time is offering slots on NYSHEX for eastbound trans-Pacific sailings. These are small but positive steps.


  Typhoons batter China, Korea and Japan

Typhoons batter China, Korea and Japan

2018 PEAK SEASON is well underway, presenting several major challenges:

  1. Congestion at China Ports: Space at ALL China ports is fully booked in the coming 4 weeks, and carriers will only take new bookings place at least 14 days before ETD. Plan ahead!

  2. Temporary shortage of empty containers
  3. There are three major storms right now; there have been twelve named storms in the Pacific so far this season, and more are possible
  4. Schedules are in flux, as lines are pulling vessels out of rotation
  5. Rising oil costs pushing lines to raise rates and peak surcharges
  6. Threat of tariffs causing shippers to ship now, ahead of potential future tariffs.
  7. GOOD NEWS! APL's new EXX service offers an 11-day transit from Shanghai to LA. Ask your JMC Rep for this option if you need to make up for lost time!

JMC's recommendation: Call your JMC representative today. We'll help you plan ahead and book your cargo ASAP, to help you maintain your schedule.

At JMC Global, we deliver on YOUR promise!

Concealed Damage Claims: 3 Myths Busted & 5 Tips to Stay Proactive


Excerpts from an article by Adam Robinson for Cerasis on April 28, 2015

Concealed damage claims are one of the most challenging and frustrating types of freight claims because it is so difficult to prove who was responsible for the damages. In addition to this, there are several myths regarding the rules and processes for filing concealed damage claims. Concealed damage claims are the MOST DIFFICULT type of freight claim to resolve. If the carrier doesn’t want to pay anything (as unfair as it may be) some of them don’t even entertain any type of offer. 

Myth #1: Carrier Only Pays for 1/3 of the Damages

In the case of concealed damage claims, it is common for carriers to pay for 1/3 of the claim value; the rationale is that the damage could have been caused by the shipper, the carrier, or the consignee. Since the concealed damage could have occurred in one of three places, the carrier justifies paying 1/3 of the cost of the concealed damage claim. However, concealed damage claims are more similar to typical freight claims than many people realize.
The challenge in concealed damage claims is a matter of evidence. If the consignee signs the delivery receipt as clear of damages, it creates the presumption that the shipment was delivered in good condition. However, this is only a presumption, and it can be rebutted through evidence that the consignee did not cause the concealed damage.
As is the case with ordinary freight claims, if the carrier caused the damage, they should pay the claim in full. If they did not cause the damage, they should dismiss the claim. Therefore, the challenge for the claimant is in proving that the carrier is in fact liable. A 1/3 payment only makes sense as a last resort if it is unknown as to who caused the damages.
Some carriers are willing to offer a courtesy settlement. Not all carriers will do that however. The sooner you notify the carrier of the issue the better. Treat freight damage claims, and especially concealed damage claims, as a court case. Whoever can provide the most well documented (and pertinent) evidence (to show beyond a reasonable doubt) that the carrier held most of the liability then typically you will win the claim or have a better offer. But when it comes to a “concealed damage” claim a majority of that is out the window.
At the end of the day, regarding concealed damage claims carriers will say;

  • Improper packaging,
  • That the delivered the correct amount tendered or handling units at (2 pallets pick up and 2 delivered. Especially when there are pallets with boxes and they may be damaged or lost),
  • And the list goes on.

Myth #2: You Can’t File if You Signed the Delivery Receipt as Clear

When you sign the delivery receipt without any notations of loss or damage, it creates the presumption that the shipment was in good condition at the time of delivery. However, this presumption can be rebutted with proper evidence. If you’ve signed a clear delivery receipt and discover concealed damage later, it becomes your responsibility to prove that the shipment was damaged at the time of delivery. But don’t let that stop you from filing the claim.

Myth #3: You only have 15 Days to File a Concealed Damage Claim

You should report your concealed damage to your carrier as soon as possible, and certainly within 5 days of delivery. However, it is still possible to file a concealed damage claim after 5 days, it is just more difficult.
So what exactly happens after the 5-day mark?
After the 5 days, the consignee has the additional burden of proving that the damage did not happen after delivery.
Prior to the 5 days, the consignee only has the burden of proving that the damage did not occur at the destination.
Because it is more difficult to prove a concealed damage claim after the 5 days have passed, you should file within this time period whenever possible. However, you can still file a concealed damage claim after this time period if necessary.

5 Tips and Best Practices to stay Proactive with Concealed Damage Claims

Here are 5 tips to help mitigate concealed damage claims:

  1. Inspect the freight right away if possible.
  2. Break the shipment down right away.
  3. Notate any issues or things that look out of the ordinary on the POD (packaging, shrink-wrap not intact, pallet being busted, etc.).
  4. Document. Document. Then document some more. Make notations on the OBOL such as the trailer number to see if the product was removed from that trailer and loaded onto another one. This occurrence will most likely not happen, but again, we are documenting the shipment. If it isn’t written down or documented, it didn’t happen.
  5. Have the shipper take photos as the freight is being shipped out and then when it is received.

Shippers have to try and be at least one step, if not more, ahead of the carriers. Especially with the new 5 day notification period on the concealed damage claims.

How do you proactively mitigate concealed damage or freight damage in general?

Companies Warn More China Tariffs Will Cripple Them and Hurt Consumers

 The Trump administration is holding six days of hearings on its proposal to impose tariffs on an additional $200 billion worth of Chinese goods.  Credit Johannes Eisele/Agence France-Presse — Getty Images

The Trump administration is holding six days of hearings on its proposal to impose tariffs on an additional $200 billion worth of Chinese goods. Credit Johannes Eisele/Agence France-Presse — Getty Images

By Alan Rappeport for the Wall Street Journal on Aug. 20, 2018

WASHINGTON — As the United States and China prepare to resume fractious trade talks this week, executives from American companies flocked to Washington on Monday to warn the Trump administration that imposing tariffs on an additional $200 billion worth of Chinese goods would cripple their businesses and raise prices on everything from bicycles to car seats to refrigerators.

Dozens of companies voiced concerns to trade officials during the first of six days of hearings on the administration’s plan to impose tariffs of as much as 25 percent on a wide array of Chinese imports. The length of the hearing by the United States Trade Representative, initially scheduled for just three days, was doubled to accommodate the leaders of nearly 400 companies and trade groups who will testify in hopes that they can influence the final list of products subject to tariffs.

While the companies appearing before the government panel varied widely, their concerns struck a similar theme: The United States is no longer equipped to produce many materials that they depend on for their products. The rise of global supply chains has shifted the bulk of manufacturing and production outside the United States, leaving companies no choice but to rely on foreign materials, including those from China.

Jim Day, a vice president at the ’47 Brand hat company, said it would take at least a decade for the United States to develop the manufacturing capacity to produce the hats he sells because such facilities were shuttered many years ago. If President Trump’s tariffs move ahead, Mr. Day said, it will mean job cuts at his Massachusetts-based business.

“We’re supportive of the president’s desire to protect U.S. businesses, continue economic growth and bring jobs to the U.S.,” Mr. Day said. “Our position is this proposed tariff increase would do the opposite.”

Mr. Trump has said his tariffs are a negotiating tactic to compel China to lower its trade barriers, stop the theft of intellectual property and open its markets to businesses from the United States. His trade policy, which includes tariffs on steel and aluminum from countries across the globe, is also aimed at lifting American manufacturing by making it less cost-effective to outsource production overseas.

But companies that rely heavily on Chinese imports say that approach will destroy many of the American businesses the president has said he is trying to help.

Jennifer Harned, the president of Bell Sports, which makes helmets for cyclists and skaters, said the tariffs her company would face on pads and straps from China could send costs soaring, potentially nudging cyclists to go helmet-free.

“We fear consumers could forgo utilizing products altogether, choosing to ignore safety laws perhaps by not buying a bike light and getting hit by a car because a driver does not see them or not wearing a helmet and dying from an impact to their skull,” said Ms. Harned, whose Illinois-based company employs 500 workers.

Others suggested that national health care costs could be inflated by Mr. Trump’s tariffs if the price of fitness products put that $600 treadmill out of reach or made even basic sporting goods unattainable.

Tom Cove of the Sports and Fitness Industry Association said 10 to 25 percent tariffs on plastic youth baseball gloves could discourage children from taking up the game and getting involved with exercise activities generally. He argued that raising the cost of getting in shape would be detrimental to the United States economy in the long term.

“It makes no sense to drive up the price of products that otherwise contribute to lowering the national expenditure on health care,” Mr. Cove said.

And, he added, finding alternatives to China or producing such products domestically is not the answer for companies that have been depending on Chinese manufacturing for decades.

“China remains a vital and not easily replaceable link in our industry’s supply chain,” Mr. Cove said. “Shifting manufacturing to other countries is simply not feasible in real time or to scale.”

Economists have warned that the humming American economy could begin to slow if the United States engages in a protracted trade war with China. The administration has already imposed tariffs on $34 billion worth of Chinese goods and those on an additional $16 billion worth are expected to go into effect on Thursday. China has retaliated with its own tariffs on American products, and neither country has shown signs that it is willing to back down.

A delegation of midlevel Chinese officials arrives in Washington this week for a new round of trade talks on Wednesday and Thursday with American economic policymakers at the Treasury Department, but little progress is expected to be made. In an interview with Reuters on Monday, Mr. Trump said he has “no time frame” for ending the trade dispute with China.

The tariffs being debated this week would hit products such as fish, petroleum, chemicals, handbags and a broad array of items that affect consumer products. This month, Mr. Trump ordered his administration to consider more than doubling the proposed tariffs from 10 to 25 percent out of frustration that earlier rounds of tariffs failed to compel China to acquiesce. If imposed, businesses and consumers could feel the pain before the November midterm elections.

The White House is “unwavering in their view that the U.S. will ‘win’ this trade war and that the Chinese government will have to capitulate,” Henrietta Treyz, the director of economic policy research at Veda Partners, an investment advisory firm, said in a note to clients. “We do not have evidence to suggest that China is preparing to capitulate in such a manner and do not see an end to the tariffs in the near term.”

At the hearing at the United States International Trade Commission building on Monday, business leaders said that they understood Mr. Trump’s desire to negotiate a more favorable trade deal with China, but that tariffs were a misguided approach.

Some officials there represented businesses not yet on the tariff list, but feared they could be next. Among them was Stephen Lang, the president of the American Bridal and Prom Industry Association, who said it is impossible to find people in the United States to do the intricate beading and sewing necessary to make prom and wedding dresses on a large scale.

“We can’t make wedding gowns and prom dresses in the United States,” said Mr. Lang, who said he feared what would happen if his industry was the next to face tariffs. “Nobody wants to do this work.”

Mr. Lang, who is the chief executive of Mon Cheri Bridals in New York, said he had to change banks this year because his lender thought tariffs posed a risk to his business.

“I shouldn’t be put out of business because of an ill-placed attempt to balance the books between these two countries,” he said.

Not every company represented at the hearing is expected to oppose the tariffs. On Friday, Michael Korchmar, the owner of Korchmar, a leather specialty company, is scheduled to testify about the pain China has inflicted on his business.

“My company has been severely impacted by China’s predatory marketing practices throughout the last 38 years, costing the jobs of almost 500 U.S. manufacturing workers,” Mr. Korchmar wrote in a letter requesting to testify. “These additional duties will help us greatly to continue rebuilding our U.S.A. manufacturing.”

Home2 Suites by Hilton Unveils Brand’s First Modular Construction Hotel



MCLEAN, VA—Home2 Suites by Hilton has plans to open its first hotel using modular construction in early 2019. Developed by Southern Hospitality Services LLC and constructed by Akshar Development Inc., the hotel represents the first Home2 Suites by Hilton modular build.

By using this process, construction time for the Home2 Suites by Hilton San Francisco Airport North property was cut nearly in half and will be significantly shorter than the average for the Bay Area market, according to the brand.

In addition, the property will incorporate several sustainability measures above the standards of the eco-friendly Home2 Suites by Hilton brand. Solar panels will produce close to 50% of the hotel’s energy, a bio-retention pond will filter water run-off and additional measures will help to reduce the hotel’s overall carbon footprint.

Upon opening, Home2 Suites by Hilton San Francisco Airport North will offer all-suite accommodations with fully-equipped kitchens and modular furniture. The hotel will offer complimentary internet, communal spaces and trademark Home2 Suites amenities, including Spin2 Cycle, a combined laundry and fitness area; Home2 MKT for grab-and-go items; and the Inspired Table, a complimentary daily breakfast that includes more than 400 potential combinations. There will also be a jacuzzi, an outdoor fire pit and grill area, and a game room.