US proposes tariffs on $50 billion in Chinese imports
The Trump administration on Tuesday escalated its aggressive actions on trade by proposing 25 percent tariffs on $50 billion in Chinese imports to protest Beijing’s policies that require foreign companies to hand over their technology. China immediately said it would retaliate against the new tariffs, which target high-tech industries that Beijing has been nurturing, from advanced manufacturing and aerospace to information technology and robotics. The Office of the U.S. Trade Representative issued a list targeting 1,300 Chinese products, including industrial robots and telecommunications equipment. The suggested tariffs wouldn’t take effect right away: A public comment period will last until May 11, and a hearing on the tariffs is set for May 15. Companies and consumers will have the opportunity to lobby to have some products taken off the list or have others added. The latest U.S. move risks heightening trade tensions with China, which on Monday had slapped taxes on $3 billion in U.S. products in response to earlier U.S. tariffs on steel and aluminum imports. “China’s going to be compelled to lash back,” warned Philip Levy, a senior fellow at the Chicago Council on Global Affairs and an economic adviser to President George W. Bush. The cherry industry in Washington state is worried its exports to China will be hurt by a growing trade war that escalated Monday when that country raised import duties on a $3 billion list of products. (April 3) Early Wednesday in Beijing, China’s Commerce Ministry said it “strongly condemns and firmly opposes” the proposed U.S. tariffs and warned of retaliatory action. “We will prepare equal measures for U.S. products with the same scale” according to regulations in Chinese trade law, a ministry spokesman said in comments carried by the official Xinhua News Agency. The U.S. sanctions are intended to punish China for deploying strong-arm tactics in its drive to become a global technology power. These include pressuring American companies to share technology to gain access to the Chinese market, forcing U.S. firms to license their technology in China on unfavorable terms and even hacking into U.S. companies’ computers to steal trade secrets. The administration sought to draw up the list of targeted Chinese goods in a way that might limit the impact of the tariffs — a tax on imports — on American consumers while hitting Chinese imports that benefit from Beijing’s sharp-elbowed tech policies. But some critics warned that Americans will end up being hurt. “If you’re hitting $50 billion in trade, you’re inevitably going to hurt somebody, and somebody is going to complain,” said Rod Hunter, a former economic official at the National Security Council and now a partner at Baker & McKenzie LLP. Kathy Bostjancic of Oxford Economics predicted that the tariffs “would have just a marginal impact on the U.S. economy” — unless they spark “a tit-for-tat retaliation that results in a broad-based global trade war.” Representatives of American business, which have complained for years that China has pilfered U.S. technology and discriminated against U.S. companies, were nevertheless critical of the administration’s latest action. “Unilateral tariffs may do more harm than good and do little to address the problems in China’s (intellectual property) and tech transfer policies,” said John Frisbie, president of the U.S.-China Business Council. Even some technology groups that are contending directly with Chinese competition expressed misgivings. “The Trump administration is right to push back against China’s abuse of economic and trade policy,” said Robert Atkinson, president of the Information Technology and Innovation Foundation think tank. However, he said the proposed U.S. tariffs “would hurt companies in the U.S. by raising the prices and reducing consumption of the capital equipment they rely on to produce their goods and services.” “The focus should be on things that will create the most leverage over China without raising prices and dampening investment in the kinds of machinery, equipment, and other technology that drives innovation and productivity across the economy,” Atkinson added. The United States has become increasingly frustrated with China’s aggressive efforts to overtake American technological supremacy. And many have argued that Washington needed to respond aggressively. “The Chinese are bad trading partners because they steal intellectual property,” said Derek Scissors, a China specialist at the conservative American Enterprise Institute. In January, a federal court in Wisconsin convicted a Chinese manufacturer of wind turbines, Sinovel Wind Group, of stealing trade secrets from the American company AMSC and nearly putting it out of business. And in 2014, a Pennsylvania grand jury indicted five officers in the Chinese People’s Liberation Army on charges of hacking into the computers of Westinghouse, US Steel and other major American companies to steal information that would benefit their Chinese competitors. To target China, Trump dusted off a Cold War weapon for trade disputes: Section 301 of the U.S. Trade Act of 1974, which lets the president unilaterally impose tariffs. It was meant for a world in which much of global commerce wasn’t covered by trade agreements. With the arrival in 1995 of the Geneva-based World Trade Organization, Section 301 largely faded from use. Dean Pinkert of the law firm Hughes Hubbard & Reed, found it reassuring that the administration didn’t completely bypass the WTO: As part of its complaint, the U.S. is bringing a WTO case against Chinese licensing policies that put U.S. companies at a disadvantage. China has been urging the United States to seek a negotiated solution and warning that it would retaliate against any trade sanctions. Beijing could counterpunch by targeting American businesses that depend on the Chinese market: Aircraft manufacturer Boeing, for instance, or American soybean farmers, who send nearly 60 percent of their exports to China. Rural America has been especially worried about the risk of a trade war. Farmers are especially vulnerable targets in trade spats because they rely so much on foreign sales. “Beijing right now is trying to motivate US stakeholders to press the Trump Administration to enter into direct negotiations with China and reach a settlement before tariffs are imposed,” the Eurasia Group consultancy said in a
Kay Ivey presents Trade Excellence Awards to 8 Alabama companies
Governor Kay Ivey on Wednesday recognized eight Alabama companies for success in selling their goods and services to countries around the globe. Recipients of the 2018 Governor’s Trade Excellence Awards represent a diverse swath of Alabama’s business landscape, including high-tech manufacturers, innovative software developers and a craft beer brewer. Ivey honored the eight companies at a ceremony Wednesday at the State Capitol in Montgomery, Ala. “Today, we celebrate the ingenuity and dedication of eight Alabama companies who recognize that commerce does not end at our state’s borders,” Ivey said. “These companies’ vision to be international leaders in their respective fields is most impressive, and we look forward to their continued efforts in overseas markets.” The governor also acknowledged that each of this year’s Governor’s Trade Excellence Award recipients are small businesses, a pillar of Alabama’s economy. “Small business is big business in the state of Alabama,” Ivey added. “Small businesses employ more than 772,000 people, nearly half of Alabama’s workforce, in more than 380,000 establishments. Their importance cannot be understated.” Here is the full list of this year’s winners: Back Forty Beer Company (Gadsden, Ala.): Was founded in 2009 to bring top-quality craft beer to Northeast Alabama and now brews almost 20 different brands with distribution in five states. In addition, the brewery exported beer to China, Canada, Malaysia and The Netherlands in 2016-2017. Conversant Bio (Huntsville, Ala.): Is a human tissue procurement company that provides Institutional Review Board approved samples to researchers working on cures for the world’s most prominent diseases. Conversant exports to 21 countries and has worked on more than 3,000 research projects. Diamond Fortress Technologies Inc. (Birmingham, Ala.): Became the first company to successfully develop a mobile touchless fingerprint biometrics software solution. It exports to countries including Mexico, Pakistan, Colombia, India, Australia, Sweden and South Africa. A DFT subsidiary also promotes banking and other financial services in lower and lower-middle income countries as defined by the World Bank. Douglas Manufacturing (Pell City, Ala.): Is a leading manufacturer of conveyor components and engineered conveying solutions. The company’s primary export markets are North America, Central America, South America and the Caribbean, serving industries that include pulp and paper, steel, chemical, cement, coal, fertilizer, biofuel, oil and natural gas, and agriculture. Irrigation Components International Inc. (Daphne, Ala.): Is the world’s leader in center pivot spare parts sales. ICII has been providing irrigation parts to dealers, distributors and OEMs for more than 30 years. It serves more than 35 countries worldwide. Keet Consulting Services LLC (Pelham, Ala.): Has been serving the Geographic Information Systems industry since 1999, with export markets that include Australia, Canada, Poland, Spain and the United Kingdom. The company provides a wide range of services, including application development, GIS implementation and RouteMan, which is sold internationally and helps companies manage route delivery and route sales. North Alabama International Trade Association (Huntsville, Ala.) Is a business-driven nonprofit membership organization committed to increasing activity in international trade in North Alabama for the past 35 years. The organization is managed by and partners with the Madison County Commission International Trade Development Center. Regitar USA Inc. (Montgomery, Ala.): Is a major manufacturer and distributor of automotive electronics, power tools and mobile safety products. It exports around the world, with primary emphasis on North, Central and South America, the Caribbean, the Middle East, Australia and New Zealand. Alabama SBDC Day During the Governor’s Trade Excellence Award Ceremony, Ivey also recognized the Alabama Small Business Development Center, which helped more than 3,000 small businesses last year. In the past five years, the Alabama SBDC program has helped small businesses create more than 4,800 jobs and access more than $368 million in new capital. Hosted at the University of Alabama, the Alabama SBDC partners with eight other universities in Alabama, in a network that leverages university expertise from the respective colleges of business to provide management and technical assistance to small businesses. The governor issued a proclamation, designating March 21, 2018 as “Alabama SBDC Day.” The organization has 30 professional business advisers who cover all 67 Alabama counties from 10 field offices. “The SBDC is a strong resource partner for the Alabama Department of Commerce’s Office of International Trade and its Office of Small Business Advocacy,” noted Ivey. “This organization also works closely with ADECA’s Small Business Credit Initiative. In addition, the University of Alabama’s International Trade Center helps companies that are new to exporting learn how to become successful exporters like our award winners. They also help in encouraging these companies take advantage of the Alabama Department of Commerce’s trade expansion programs.” Export Benefits Alabama’s exports climbed to a record level of $21.7 billion in 2017, with automobiles, aircraft components, chemicals, paper and minerals fueling the increase. “Exporting is a driving force of Alabama’s economy, which benefits in the form of new jobs and investments for those exporters here at home,” Secretary of the Alabama Department of Commerce Greg Canfield added. “We congratulate today’s winners and are preparing to help them and other companies increase their global sales plans this coming year.” Hilda Lockhart, Director of Commerce’s Office of International Trade, said this year’s award winners are models for peers which may be looking to follow a similar path in exporting their goods and services overseas. “Each of these companies are driven by a desire to compete on the global stage, and their creativity, hard work and strategic planning have helped them achieve those goals,” she said.
Could patented golden kiwifruit be Alabama’s next export success?
A small community in eastern Alabama is home to the nation’s only commercial golden kiwifruit orchard, an innovative operation that could lead the way in establishing a new specialty crop for growers across the southeastern United States. The Southeast Kiwi Farming Cooperative, established in 2014 and based in Tallapoosa and Macon counties, grows varieties of golden kiwifruit developed and patented at nearby Auburn University, and aims to export them to far-flung global markets. Golden kiwifruit, in contrast to its green counterpart, has bright yellow flesh and smooth, not fuzzy, skin. It also has a sweeter, more mellow flavor than the tart taste of green kiwifruit. “The goal is to get it overseas to places like Japan and Southeast Asia where gold kiwifruit is in high demand,” said Clint Wall, co-op vice president and manager. Export ‘highway’ To launch the developing orchard, the horticulture graduate of Auburn’s College of Agriculture is drawing his on eight years of experience working in New Zealand, a global hub of kiwifruit production. If the orchard is successful, it could boost the fortunes of other fruit and vegetable growers across Alabama. Kiwifruit is extremely profitable, particularly golden kiwifruit, Wall said. Once the orchard’s vines mature, a sophisticated harvest system will be installed to pick, pack, process and cool the kiwifruit in preparation for shipment overseas. That same system could also be used for peaches, satsumas, blueberries and other Alabama-grown produce. “I think it’s time that that sort of intensity is brought to the fruit-growing sector here in Alabama,” Wall said. “You know those Chilton County peaches that run down your chin when you take a bite? There could be a huge export market for them. “If we pave a road for our fruit to Japan, we can put other things on that highway.” Auburn connection So just how did a kiwifruit orchard come to Alabama? Wall says he gets a few strange looks when he tells people what he does for a living. “People are usually just surprised that kiwifruit grow in Alabama. They think it’s tropical, but it’s not. It doesn’t grow in a tropical climate,” he said. China is the world’s largest kiwifruit producer, while Italy and Chile are also major players in the global industry. New Zealand has a fairly small footprint of total acres devoted to kiwifruit, but the country is No. 1 in production per acre. In the U.S., all kiwifruit orchards are in California, except for the Southeast Kiwi Farming Cooperative in Reeltown. Alabama and kiwifruit connect through Auburn, where horticulture professor Billy Dozier has long pursued a dream to turn kiwifruit varieties he has patented into a viable niche crop for southeastern growers. Several years ago, Dozier, along with nursery owners and brothers Wayne and Jimmy Bassett, formed Gold Kiwi Group LLC, with the exclusive right to propagate, grow and sell five patented cultivars Dozier and others developed at Auburn. The partners bought land for the orchard from former Auburn football coach Pat Dye. They then tapped Wall, who wanted to return to the U.S. to be closer to family, to run the operation. A former student of Dozier’s, Wall used his industry connections to help land the support of investor Sun Pacific, the largest kiwifruit producer in the U.S. The Reeltown orchard is the company’s first foray into golden kiwifruit. Growth area A recent study by the global kiwifruit industry identified the southeastern U.S. as a possible new growth area, specifically a swath running through Alabama and into Georgia and South Carolina. Among the benefits of the region are a frost-free growing season, abundant rainfall, plenty of lakes and rivers and a favorable soil profile. Another plus is that the U.S. has never had an outbreak of a devastating bacterial canker that nearly wiped out the global kiwifruit supply in 2011. The study results did not surprise Wall. “I always kind of knew that. Auburn has been growing kiwifruit at the Alabama Agricultural Experiment Station’s Chilton Research and Extension Center near Clanton since the mid-1980s. It was just never commercialized,” he said. The Reeltown operation is still in the developmental phase, since it takes about four years for a kiwifruit vine to produce well. Currently, the orchard has about 40 acres of vines that are that age, but it won’t fully produce on the entire 180 acres until 2022. Creating a pathway The coming year will be one of experimentation, Wall said, as he tries to figure out some growing issues with the help of graduate students from Auburn. They plan to study the use of trap crops, rotating organic and nonorganic pesticides, and how to improve pollination using honey bees and bumble bees. “By 2019, we would like to make an informed decision about how we proceed,” he said. “Do we plant more acres? Do we not? Do we try to do it somewhere else? It will be an interesting couple of years.” If the Southeast Kiwi Farming Cooperative is successful and has to create the infrastructure to get its products to market, Wall said he would love to see other Alabama-grown commodities go to market through a similar pathway. “It’s a big world with high demands out there, and it would be unfortunate for such fantastic commodities to be undervalued by keeping them here,” he said. “We could introduce them to a greater audience, which would be thrilled, and that thrill is going to turn into dollars.” This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website. Republished with persmission from the Alabama NewsCenter.
Alabama exports set new record in 2017
Gov. Kay Ivey announced on Thursday that in 2017 Alabama exports reached a record setting $21.7 billion, up 6 percent from 2016’s export total of $20.5 billion. “We’ve seen Alabama exports continue to expand in recent years, strengthening our economy at home and creating more opportunities for our citizens,” said Ivey. “The companies sending Alabama-made products to markets across the world are not just large, multinational companies, but also small and medium-sized companies located in communities across the state, setting a new annual export record is just another example of the economic success that Alabama is enjoying right now.” Alabama exports have grown 21 percent since 2011, and 50 percent in the last ten years. “Exporting is a fundamental economic pillar that supports growth in our state, and increasing demand for Alabama-made products around the globe underscores the success of our dynamic manufacturing sector,” said secretary of the Alabama Department of Commerce, Greg Canfield. “Growing export activity contributes economic vitality and spurs job creation across the state.” Alabama businesses exported goods to over 180 countries. According to a press release from the governor’s office, the top five markets were: Canada: $4.14 billion China: $3.62 billion Germany: $2.94 billion Mexico: $2.9 billion Japan:$682.6 million Exports to China and Mexico both grew by 10 percent, while shipments to Japan jumped 30 percent. Transportation machinery was Alabama’s No. 1 export, cars were the largest export in this category. Aircraft, spacecraft and auto parts, were the other top exports. Other exports were chemicals, minerals and paper. “With much of the world’s purchasing power located outside the U.S., Alabama companies are looking at markets beyond our borders for growth opportunities, exports enhance the quality of life for all Alabamians and elevate prosperity in the state. Creating jobs through exports for the state’s citizens is key to accelerating Alabama globally.” said director of the Commerce Department’s Office of International Trade, Hilda Lockhart. In 2017, Alabama ranked No. 22 in the nation in export volume, moving up one spot from 2016.
Alabama shatters export record at $20.6 billion in 2016
Alabama’s exports broke an all-time record in 2016 with $20.6 billion in goods and services shipped abroad from the Yellowhammer State, a 6.4-percent increase from 2015. The total exceeds the state’s previous annual export record of $19.58 billion, set in 2012. Alabama-made products such as automobiles, aircraft parts, chemicals and metals were shipped to 189 countries last year, according to Alabama Department of Commerce’s Office of International Trade. “The increases in these numbers show Alabama companies are prospering in the global economy. These exports continue to be powerful growth engines for out state by supporting their communities through job creation,” said Governor Robert Bentley. “We will continue to support Alabama businesses as they grow to reach new markets and new customers because when businesses succeed, Alabama succeeds.” Alabama shipped goods across the globe to reach 2016’s record total, with their top export markets in Canada, China, Germany, Mexico and the United Kingdom, according to Commerce Department data. Among the many shipped goods, transportation equipment — which includes automobiles and parts, aircraft components, and boats, among other products — was the number one export category. These exports climbed 15 percent in 2016 totaling nearly $10.7 billion. Other top Alabama exports were chemicals, primary metals, paper products and some types of machinery. “Alabama’s dynamic manufacturing base turns out a wide range of great products that consumers in markets around the world want to own, which creates jobs and opportunity here at home,” said Greg Canfield, secretary of the Alabama Department of Commerce. “Setting a new record for exports last year shows that ‘Made in Alabama’ is not a slogan but a fundamental economic pillar supporting economic growth in our state,” Canfield added. According to state Commerce Department data, 2017 is poised to be another great year for Alabama exports, as exports from Alabama companies have risen 48 percent since 2006, and are expected to continue to rise in the future. “Exports are a key component of the state’s economic growth and make for a more prosperous Alabama,” said Hilda Lockhart, director of Commerce’s Office of International Trade. “It is encouraging to see this continued rise in exports because we know that it is growing jobs and sustaining our companies in a great multitude of industry sectors.”
GOP-led Congress prepared to let Export-Import Bank expire
Congressional Republicans are poised to deal a sharp blow to their traditional allies in the business community by allowing the federal Export-Import Bank to go out of business at the end of the month. But it may only be temporary. The 81-year-old bank is a little-known federal agency created during the Depression that makes and guarantees loans to help overseas buyers purchase U.S. products, from airplanes to bridges to baby clothes. Over the past year it’s also become a surprising test of GOP purity, as Tea Party-backed lawmakers and outside conservative groups have denounced the bank as crony capitalism and vowed to get rid of it, pressuring fellow Republicans to go along. “It is the purest form of corporate welfare, where you have a government agency that basically exists to subsidize Boeing airplanes and GE engines and Caterpillar tractors,” said Dan Holler of Heritage Action for America, one of the conservative groups pushing congressional Republicans to stand against the bank. Supporters at the U.S. Chamber of Commerce and other business groups disagree, arguing that the agency helps many smaller companies and is necessary to keep U.S. businesses competitive, especially because key foreign competitors such as China have generous export credit agencies helping their homegrown industries. “The fact that all the major exporting countries have export credit agencies means American exporters would be competitively disadvantaged if the bank goes away,” said Boeing spokesman Tim Neale. “The opposition has thrown a lot of stuff out there that’s frankly pretty misleading.” The Export-Import Bank, which says it supported $27 billion in U.S. exports last year, still counts supporters in both parties on Capitol Hill. But a number of high-profile Republicans including Senate Majority Leader Mitch McConnell, R-Ky., and House Majority Leader Kevin McCarthy, R-Calif., have abandoned past support for the bank under pressure from the party’s conservative wing. Most of the party’s leading presidential candidates have also lined up against reauthorizing the bank. “The Export-Import Bank is essentially welfare for big corporations, both foreign and domestic,” Texas Sen. Ted Cruz, one of the GOP hopefuls, said in a Wednesday speech at the Heritage Foundation. “Do nothing, let it expire, and end the gravy train for Washington lobbyists on the Export-Import Bank.” Republican House Speaker John Boehner of Ohio, a longtime business booster, has pushed his Financial Services Committee Chairman Jeb Hensarling, R-Texas, to come up with a plan to reform the bank or wind it down. Hensarling has responded, instead, by pushing for the bank’s charter to expire without a vote June 30. With Congress heading out on recess next week and no prospect of action on the Export-Import Bank before then, Hensarling and fellow tea party conservatives will get their wish. But their victory may be short-lived. Lawmakers of both parties on Capitol Hill expect a reauthorization of the bank could move in the Senate in July. If attached to must-pass legislation extending the federal highway trust fund, it could make it through the House as well. The fate of the Export-Import Bank has become enmeshed in Congress’ contentious debate over trade after Washington Democratic Sen. Maria Cantwell withheld her support on a key trade vote last month until she said she got a commitment from McConnell to allow a vote on the bank. What exactly was agreed to is now a matter of dispute on Capitol Hill, and McConnell says he’s already fulfilled his commitment by allowing a symbolic vote on the Export-Import Bank earlier this month that allowed supporters to demonstrate they command at least 65 votes in favor. Still, McConnell and other GOP leaders sound open to adding a reauthorization of the bank to the highway bill next month. “The highway bill, of course, will be open for amendment, and it’s pretty obvious that that would be a place for this vote to occur,” McConnell said Tuesday. Asked about the issue Wednesday, Boehner said: “I think some expectation has been that it’ll come over here on some must-pass bill. The only commitment I’ve made is that if it does, it would be considered under an open process.” Some supporters seem resigned to a brief lapse in the bank’s charter. But some Democrats say even a temporary standstill will jeopardize projects and U.S. jobs. They also question whether Congress has abandoned its habit of solving problems only when a deadline looms – in favor of solving them only after the deadline has come and gone. “There’s a whole lot of people who think that it doesn’t matter; it does matter. It matters to the jobs that are out there. We have $11 billion in credit in the pipeline at the Ex-Im Bank. That $11 billion is now going to be stalled out,” said Sen. Heidi Heitkamp, D-N.D. “I hope that the message this place gets is do things on time, don’t wait.” Republished with permission of The Associated Press.
