April 22, 2020
India Extends Lockdown to May 3
Prime Minister Modi extended India’s nationwide lockdown until May 3, but will permit some industrial activities, including the manufacture of essential goods and health-related activities. The exemption applies to research labs, pharmaceutical manufacturing, construction, agricultural and the transportation of goods.
As of April 21, export restrictions on certain personal protective equipment, including ventilators and masks, diagnostic kits, reagents and sanitizers remain in place, but India has eased restrictions on exports of APIs (Apr 6 notice; Apr 17 notice) and Hydroxychloroquine, which is now licensed in quantities to “nations who have been particularly badly affected by the pandemic.”
President Trump Issues Order to Defer Payment of Duties, Taxes and Fees
President Trump on Sunday, April 19, issued an Executive Order that granted the Secretary of Treasury the ability to defer payments of certain duties, taxes and fees. The Department of Treasury and U.S. Customs and Border Protection (CBP) have issued a Temporary Final Rule that provides details on how to qualify for the deferment program. The joint statement can be viewed here. CBP also issued a set of CSMS messages on the program overview and payment instructions.
The temporary postponement applies to formal entries made in March 2020 or April 2020 but does not apply to entries that include merchandise subject to a trade remedy action (AD/CVD, 301, 201, 232).
In order to qualify for the program, an importer must demonstrate a significant financial hardship:
- The operation of an importer is fully or partially suspended during March 2020 or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings due to COVID-19; and
- As a result of such suspension, the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.
April 15, 2020
The plunge in Chinese imports and exports eased in March as Customs data showed overseas shipments in March fell 6.6% (year-on-year), which is an improvement from a 17.2% decline in January-February, as exporters clear order backlogs following facility shutdowns. While the trade figures are not as bad as many feared, the overall growth outlook for China remains shaky as COVID-19 shutdowns spread globally and halt near-term recovery.
The Trump Administration has also eased a ban on personal protective equipment (PPE) exports which is set to take effect Friday and be in effect for 120 days. The Federal Emergency Management Agency (FEMA) last week issued a temporary rule that required exports of five types of PPE, e.g. certain gloves and masks, get “explicit approval” from FEMA. As a CBP memo has since clarified, the focus of the ban is on “commercial quantities,” which it defines as shipments valued at $2,500 and containing more than 10,000 units of covered COVID-19 response products. The Administration also eased the ban by clarifying exemptions, e.g. for certain exports to Mexico and Canada. Any further exemptions will be published in the Federal Register.
Lastly, U.S. Customs and Border Protection has established a web portal to replace the email address for all cargo inquiries related to the importation of medical supplies to fight the spread of the COVID-19 virus. It provides an interactive experience for the user to review pertinent information and allows for the submission of a direct inquiry to the COVID-19 Cargo Resolution Team (CCRT).
April 8, 2020
While the business of chemistry and logistics continues to be deemed essential, shippers of essential goods are finding that moving products is more difficult and expensive. SOCMA members report using trade war strategies developed in recent years to plan for supply chain resilience and lessen geographic shocks from COVID-19-fueled lockdowns.
Industry is seeing a reduction in protectionism in countries that are buyers, not sellers, but circumstances can change quickly. For instance, India issued a March 3 notice requiring advance government approval for exports of 26 active pharmaceutical ingredients, including inputs used in antibiotics and fever reducers like paracetamol, but then repealed for all but paracetamol in an April 6 notice.
Access to raw materials is critical for any tightly integrated supply chain and while most SOCMA members have not experienced significant first-tier supply disruption, second- and third-tier supplier issues may create bottle necks in coming months that constrain capacity, shrink transport markets and have lasting effects on interstate and international supply chains.
April 2, 2020
Wide-ranging production continues as the business of chemistry and supply chain activities are consistently deemed “essential,” but increased lockdowns across major markets, including Mexico’s recent health emergency decree, creates regular challenges for the chemical sector.
The National Bureau of Statistics of China reported on March 27 that chemical manufacturing was among the hardest-hit sectors, with profits declining by 61% and output by 21% in the first two months of 2020, compared to 2019.
Approximately 86% of Chinese chemical plants had reopened by the end of March, but were running below capacity citing obstacles with understaffing, transportation, demand, access to raw materials and a slowing supply chain. SOCMA has not found any lingering supply chain disruptions caused by COVID-19 in China.
March 26, 2020
Supply Chain Insight from China COVID-19 Experience
March 19, 2020
March 11, 2020
- Production in China is still operating at less than full capacity but has been increasing day-by-day since facilities and industrial parks have largely reopened.
- Southern China – areas such as Jiangsu, Zhejiang, Guangdong, etc. (except Hubei province) – is resuming operations faster than Northern China (areas such as Hebei, Tianjin, etc.). Northern China is facing challenges due to public transportation issues and quarantines.
- Logistics is by far the most disruptive issue reported.
- Air freight is said to be nearly non-existent, and, where it does exist, fees are as high as 8X the normal costs.
- Land transportation in China is experiencing significant delays, which has a domino effect on all exports to the U.S.
- There are significant shipping challenges because freighters are being quarantined for additional time, or because containers are unavailable. Further, on the shipping front, many members have had shipments delayed with promises of delivery in March or April, but there are no guarantees those dates will see delivery either.
- Some members have suggested that, due to 301 China Tariffs, they were more prepared because they were already working on diversifying suppliers and had stockpiled some of their raw materials.
Categorized in: COVID-19/Coronavirus