An economist in Europe and one in the U.S. say policymakers talking about the vulnerabilities of supply chains are drawing the wrong conclusions from the shortages of personal protective equipment, but while they say policy decisions should be fact-based, it's not clear that procurement professionals can influence the politicians. Simon Evenett, an international trade professor at Switzerland's University of St. Gallen, said during a Peterson Institute for International Economics program that in most medical goods and medicines, China is not the largest supplier, though it is for PPE.

People are realizing they can no longer count on global supply chains operating relatively free of political interference, according to a think tank official who studies the global economy. “That said, it’s not so easy to change global supply chains,” said Homi Kharas, deputy director for the Global Economy and Development program at the centrist Brookings Institution. Kharas, who was speaking on a Brookings webinar Oct. 19, “Global China: Assessing Beijing’s growing influence in the international system,” said there's still an enormous amount of trade between the U.S. and China.

France recently said it would not wait for the Organization for Economic Cooperation and Development to reach a compromise on digital services taxes, and said that it would start collecting taxes on internet giants in December. The National Foreign Trade Council said that's extremely troubling. “Moving ahead with a unilateral DST threatens to sap whatever political momentum exists to find multilateral consensus at the OECD, and to worsen bilateral economic relations with the United States,” said NFTC Vice President for Global Trade Issues Jake Colvin. “This move by France will only give cover to other countries to move ahead with implementing and collecting other discriminatory services taxes, which would fray the global international tax framework.” The Office of the U.S. Trade Representative has said it would levy Section 301 tariffs on French imports if the DST is implemented, including on champagne (see 2007130043).

Even though companies that make cars in North America are going to have to change sourcing to meet stricter rules of origin under USMCA, the director of international public policy for Toyota and the head of Canada's auto parts trade group say they expect carmakers to do so to keep the tariff benefits. Toyota's Leila Afas noted that automakers don't have to comply with trade agreements to import, but said, “I believe many will choose to comply with USMCA.” Afas and others discussed USMCA issues during an Oct. 14 webinar hosted by Rice University.

European wine and spirits imports have been hurt more than any other industry outside aerospace in the Airbus-Boeing dispute, and the trade group representing those importers is asking for Europe and the U.S. to agree to a 180-day truce and serious settlement negotiations. The National Association of Beverage Importers was reacting to the announcement that the European Union can add tariffs to $4 billion in U.S. exports; the U.S. is already taxing hundreds of European products at 25% as part of its retaliation for Airbus subsidies. Between 15% tariffs on aircraft and 25% tariffs on other products, the U.S. is targeting $7.5 billion in imports.

Demand for connectivity tools to fill remote work and learning needs fueled torrid third-quarter import growth in laptops and tablets, according to Census Bureau statistics accessed Oct. 7 through the International Trade Commission’s DataWeb portal. Q3 brought healthy import growth to smartphones compared with Q2, but unit shipments lagged behind those of 2019's third quarter, consistent with forecasts showing 2020 unit declines from a year earlier. Vietnam solidified its position in both categories as a secondary country of origin to China.

The U.S. needs to increase engagement with China to convince it to limit restrictions on foreign companies and to end unfair government subsidies, former U.S. Trade Representative Michael Froman said. Although Froman said he is “hopeful” the U.S. can secure these concessions through more trade negotiations, he also said the U.S. may need to focus more on its own industrial policy to remain technologically competitive with China.

Companies that import components or finished goods are reevaluating their supply chains in the wake of the novel coronavirus pandemic, said Andrea Little Limbago, vice president of research and analysis for Interos, a supply risk management company. Little Limbago, who spoke at an Atlantic Council webinar Sept. 23 on how technology can improve global supply chains, said that Interos surveyed 450 executives across many industries, and 98% had disruption during the COVID-19 surge this year. She said that while logistics were a major part of the disruption -- and those are starting to get worked out -- 25% of the executives said they work with vendors who went bankrupt. “We're just on the tip of that,” she said.

A new Steptoe and Johnson team will focus on supply chain issues, the law firm said in a recent news release. The team is led by Jeff Weiss, co-leader of the firm's International Trade Policy practice.

The trade group that represents 12 foreign companies that have auto manufacturing operations in the U.S. says that the dialogue with the U.S. trade representative on alternative staging regimes will be ongoing for “the next several months.” Jennifer Safavian, CEO of Autos Drive America, spoke with reporters Sept. 16. The Office of the U.S. Trade Representative must bless each manufacturer's plan to move toward USMCA rules of origin for that company to get a five-year transition to higher regional value content standards, and a slower transition to meeting new labor value content standards. She said all three countries will have to approve each alternative staging plan.