The U.K. announced plans this week to put in place a carbon border adjustment mechanism, which could lead to new import taxes and due diligence requirements on aluminum, cement, ceramics, fertilizer, glass, hydrogen, iron, steel and other industrial sectors associated with high carbon emissions. The mechanism, which is expected to be implemented in 2027, came after a 12-week public comment period in which over 100 representatives from industry, non-governmental organizations, think tanks and academia gave input about the types of products that should be covered, how import taxes should be calculated, a timeline for implementation and more.
The EU has received assurances that Beijing will grant export licenses for shipments of gallium and germanium to European businesses despite the restrictions China placed on exports of the two metals in August (see 2307050018), European Commission Vice President Valdis Dombrovskis said this week. Dombrovskis also said the bloc is looking to sanction additional Chinese firms that may be skirting restrictions against Russia and is hoping to ensure its upcoming supply chain due diligence regulations don’t impose excessive compliance burdens on EU companies.
Rep. John Garamendi, D-Calif., is drafting legislation that could lead to new oversight over certain rail storage charges assessed by ocean common carriers against shippers on through bills of lading. The bill, which hasn't been completed, could require the Federal Maritime Commission and the Surface Transportation Board to “get together” and decide who should regulate those charges, a Garamendi staffer told us.
Contractual language against forced labor may not be enough to meet increasing supply chain due diligence regulations, particularly as the EU implements its corporate sustainability due diligence directive (see 2202230073 and 2306010022), Ernst & Young advisers said this week. Although there is still debate about how broadly the bloc’s new rules will be scoped, the advisers warned companies against blinding themselves to rising government expectations.
While most shippers applauded the Federal Maritime Commission’s revised proposed rule on unreasonable carrier conduct, carriers urged the commission to again amend the wording, saying it unfairly favors exporters and stretches beyond the authority granted to the FMC by the Ocean Shipping Reform Act of 2022. Several major carriers said the commission should narrow the rule’s proposed definition for “unreasonableness,” allow carriers to rely on “legitimate business factors” as a reason for why they may refuse cargo space, remove the rule's documented export policy requirement and revise other proposals they say disadvantage carriers.
Importers whose cargo is detained by CBP for forced labor concerns may request to move the cargo to a customs bonded warehouse, but the cargo may not move into a Foreign-Trade Zone for storage, CBP said in an Aug. 3 CSMS message.
DHS and its partner agencies need more funding and resources to handle the increasing enforcement scope of the Uyghur Forced Labor Prevention Act, the Forced Labor Enforcement Task Force (FLETF) said in the first update to its UFLPA strategy. The update, released Aug. 1 and required annually, also outlines new steps CBP is taking to upgrade its enforcement capabilities and describes plans to soon provide more UFLPA compliance guidance to importers.
DHS will add a Chinese battery manufacturer along with a Chinese spice manufacturer and its subsidiary to the Uyghur Forced Labor Prevention Act Entity List, the agency said in a notice released Aug. 1. Camel Group Co., a major manufacturer of car batteries, will be added for working with the Xinjiang government to “recruit, transport, transfer, harbor or receive forced labor or Uyghurs” and other persecuted groups. DHS also will add spice and extract maker ChenGuang Biotech Group Co., Ltd., along with subsidiary Chenguang Biotechnology Group Yanqi Co. Ltd., for sourcing material from Xinjiang or from entities in the region that are involved in a “government labor scheme that uses forced labor.”
The U.S. needs to better prepare for future Chinese retaliation against U.S. trade restrictions, said Rep. Mikie Sherrill, D-N.J., which could further hurt U.S. imports of items needed for semiconductor production. Sherrill, speaking during a July 20 House Select Committee on China hearing, pointed to China’s recent export restrictions on germanium and gallium -- two metals used to produce semiconductors -- and said she expects more retaliation to come (see 2307060053 and 2307050018). “I think we're going to see more and more instances of China putting our supply chain at risk,” she said.
Canada launched investigations of Nike Canada and Dynasty Gold this week after receiving complaints that both companies’ supply chains have ties to forced labor in China. A Canadian agency said it’s probing allegations that Nike has “supply relationships” with Chinese companies that use Uyghur forced labor and that Dynasty Gold, a mining company, benefited from Uyghur forced labor at a Chinese mine in which it had a majority stake.