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Reuters
17 hours ago
- Business
- Reuters
Breakingviews - Transshipment is the new dirty word of trade
HONG KONG, July 21 (Reuters Breakingviews) - Where is it from? It's one of the top questions customs officials must ask of every shipment, alongside what it is and how much it is worth. Donald Trump's trade war could turn this inquiry on the origin of $3.3 trillion of U.S. goods imports into a quagmire. The dizzying spread of tariffs the U.S. president is imposing on American trading partners – ranging from a baseline duty of 10% secured by the United Kingdom to the threat of a punitive 50% charge on imports from Brazil – opens up a large arbitrage. Exporters, particularly in China, have a big incentive to misrepresent where their goods are from. The president is attempting to counter this risk by saying goods that are "transshipped" through lower-tariff countries will face higher charges. For example, the U.S. has imposed a 20% import duty on products originating in Vietnam, but will charge double that figure for goods routed via the Southeast Asian country. Transshipment is not a new word or concept. In trade, it simply means moving goods between vehicles such as airplanes, trains and lorries. Trump, however, is using it as a shorthand for tariff evasion or fraud. He has good reasons to be concerned. Just look at what happened when the president slapped duties on China in 2018. The share of U.S. imports arriving from the People's Republic fell by 8 percentage points to 13.4% between 2017 and 2024. However, China's total share of total global merchandise exports rose about 1.5 percentage points to 14.2% over a similar period. One reason is that some Chinese manufacturers dodged U.S. duties by re-routing everything from electronics to footwear through other countries, in particular Mexico and Vietnam. The exact size of the problem is a subject of intense debate and study among economists. Trump's new trade regime makes it even more complicated. The existing global trading system is based on applying a standard tariff on imports, and then granting goods from certain countries, or groups of countries, preferential access. Under Trump's new system, however, the U.S. will no longer have a standard non-preferential tariff, nor one of the world's lowest tariff regimes. Instead, the charges on goods arriving from different countries could vary by as much as 40 percentage points, depending on where U.S. tariffs end up. Separate levies that Washington intends to apply on semiconductors and pharmaceuticals will add further complexity. This raises the stakes for customs officials trying to determine where a product is from. So-called "rules of origin" were first introduced to help countries collect statistical data, and have proliferated over the past 30 years to support bilateral and regional free trade agreements. These rules are also supposed to help countries implement other policies, such as anti-dumping measures. The classic rule of origin is based on the concept of "last substantial transformation". This means the correct tariff depends on the country where the character of the product was last changed. This principle sounds simple but is anything but. Take clothing. Say a company sends a Chinese-made shirt to Hanoi, adds a "Made in Vietnam" label, and then ships it to the United States while paying the lower Vietnamese tariff. Most trade lawyers would agree that is fraud. But what if brands making clothing in Vietnam like Nike (NKE.N), opens new tab, Lululemon Athletica (LULU.O), opens new tab and Fast Retailing's (9983.T), opens new tab Uniqlo, use dye, cotton, buttons or zips from China? Determining a product's true origin becomes a complex and ever-changing mystery. The U.S. Department of Commerce tries to clarify the difference using the example of mixed frozen vegetables and cookies, opens new tab. Vegetables which are grown in various places and taken to another country to be mixed and frozen were not substantially transformed, so the mixture must be labelled with the origin of each ingredient. But if sugar, dairy products, and nuts from different countries are made into a cookie, the country of origin is the location where the ingredients are baked or processed. Today's supply chains are much more globalised and complicated. For motor vehicles produced by Ford Motor (F.N), opens new tab, General Motors (GM.N), opens new tab and Stellantis ( opens new tab, origin depends on the value of the contents. To qualify for the United States-Mexico-Canada Agreement, for example, at least 70%, opens new tab of a vehicle producer's steel and aluminum purchases must originate in North America. Tariffs can also vary depending on a product's American content. U.S. Customs and Border Protection says, opens new tab for imports where at least 20% of the value is from the United States, the reciprocal tariff will not apply to the U.S. components. Verifying the origin of goods requires cooperation. U.S. customs officials will get some help from countries including Malaysia, Thailand and South Korea, which are stepping up their effort to crack down on blatant re-labelling of goods. This is in their interest because cheap Chinese products are threatening to hollow out local industries. Support for the U.S. measures will drop, however, if Trump is serious about trying to squeeze China out of supply chains. The People's Republic accounts for nearly 29% of value added in U.S. imports from Cambodia, and almost 19% of those originating in Vietnam, according to research by Sonal Varma and Si Ying Toh at Nomura. Chinese investors are also big owners of factories across Southeast Asia. Despite the proliferation of rules of origin, the World Trade Organization estimates that 74% of global trade, opens new tab still flows under its "most favoured nation" terms, a principle whereby member countries treat imports equally regardless of their origin. For now, it looks like other economies are moving in the opposite direction from the United States. The European Union and Indonesia are moving ahead on finalising a free trade deal; China has extended zero-tariff treatment to 53 African countries; while talks over an EU-India trade pact are slated to continue in September. Trump could have satisfied some of his stated goals of reducing U.S. trade deficits, raising money and isolating China by imposing high duties on the world's second-largest economy, and a single lower tariff on the rest of the world. Indeed, that may yet be where the president's tariffs end up: On Wednesday, he said he would send letters to more than 150 'smaller' countries notifying them their tariff rates could be 10% or 15%. But that would still potentially leave more than 40 countries facing wildly diverging rates. Expect the new dirty word in trade – transshipment – to be used much more often in future. Follow Una Galani on Linkedin, opens new tab and X, opens new tab.
Reuters
05-07-2025
- Reuters
Singapore like a local
To outsiders, Singapore is often thought of as a typical financial capital, with clean streets, efficient services and a high standard of living. While that image holds some truth, it only tells part of the story. Beneath its polished surface is a multicultural society and flourishing creative scene, where global ideas are constantly reimagined through local perspectives. Its rapid pace of urban renewal means there is always something new to discover — if you know where to look. I work as a data visualization columnist at Reuters Breakingviews in Britain, but I grew up in Singapore and my frequent trips back home often involve revisiting old haunts across the city. Some places no longer exist, but thankfully most have stuck around. Here's my guide to exploring the island like a local: Getting around: Singapore's public transportation system is renowned for its reliability — so much so that rare service disruptions often make national headlines. Several new Mass Rapid Transit (MRT) train lines have sprung up in recent years, making it even easier to get around. But for a slower and more scenic journey, try the the 48 bus route, which takes you from the eastern housing estates through to the tree-lined East Coast Parkway, where the view eventually opens out over the Benjamin Sheares Bridge, flanked by the Singapore Strait and the Kallang Basin, before you enter the city proper. What to eat: There is no single definitive dish in Singaporean cuisine, so the most appropriate way to get acquainted with the local palate is to visit a hawker centre. In the 1960s, street food vendors were corralled into a more formal market, leading to the creation of these state-built centres that function as community dining rooms with affordable prices. Most, if not all, of the 122 hawker centres dotted across the city-state serve variations of the same theme — regional cuisines with a Singaporean sensibility. Lagoon Food Village, commonly referred to as Lagoon, stands out. A first visit to this place by the seaside on the East Coast can be overwhelming, with billowing barbecue smoke and brightly lit stalls demanding your attention. Popular dishes include sambal kangkong (water spinach stir-fried with a spicy sauce), sambal stingray, orh luak (small oysters mixed into an omelette), or hokkien mee (egg noodles stir-fried with seafood), all paired with fresh sugarcane or coconut juice. After your meal, complete your visit by taking a walk by the beach on Lagoon's doorstep. Not every stall is open during the weekdays, so making a weekend trip is key for the full experience. It's not a fast-food outlet, so be prepared to wait, and return your tray at the end. Note that locals will often save seats by placing packets of tissue paper on the table. For those looking to dive deeper into hawker culture, make a trip down to the bustling Bedok Interchange. A personal favourite here is the family-run Inspirasi (Malay for 'inspiration') stall that has been serving Malay classics like soto ayam and mee rebus (noodles submerged in a chicken broth and a thick gravy made from sweet potatoes, fermented soybeans and dried shrimp, respectively) since 1970 at prices that have somehow defied inflation. Treat yourself to an extra side of bergedil (fried potato patties) for just $0.50 and ask for extra sambal if you have a high tolerance for spice. The nearby Fengshan Food Centre in Block 85 also offers stalls serving Chinese-leaning dishes like prawn noodles, satay bee hoon (vermicelli noodles served with peanut sauce), and oyster cakes, all of which have established a loyal following. What to see: For a crash course in Singapore's history, head to City Hall. The corridors of the sprawling neoclassical building have witnessed pivotal moments, from the surrender of the Japanese Imperial Army at the end of World War Two to the swearing-in of the country's first elected government in 1959. Today, the building hosts the National Gallery, the world's largest collection of Southeast Asian art, and a leisurely afternoon exploring its many nooks and hallways is a great way to escape the heat outside. The permanent collection featuring regional artists from the mid-1800s through to the post-colonial era is a must-see, as is the Rotunda Library, filled with zines and booklets from long-forgotten art collectives. A deeper history of the city as a trading port and its centuries-old links with Southeast Asia can be found in the Asian Civilisations Museum nearby, where artifacts speak to the sheer diversity of the region. For more contemporary perspectives, the Singapore Art Museum, temporarily situated at the Tanjong Pagar Distripark, is always worth a trip, while Cuturi Gallery on Aliwal Street is an excellent place to discover emerging artists from Singapore and elsewhere. Wind down the day by visiting the many cafes and bars of Katong, a once-sleepy neighbourhood that has retained its charm despite significant development in and around the area in recent years. A brief escape: With enough planning, you can get to the beaches of Malaysia and Indonesia on budget airlines in less than two hours. Alternatively, for around $15, a ferry ride to Singapore's southern islands — St John's, Lazarus, Kusu, and Sisters' — offers a peaceful day-trip escape from the city. On weekdays, you might even have the whole island to yourself if you're lucky. The tropical, green spaces of Bukit Timah Nature Reserve and Sungei Buloh Wetland Reserve also make for great getaways from the concrete jungle — just be sure to pack insect repellent. CITY MEMO DATA POINTS Population: 6.04 million Size: 735.7km², or 240 square miles Weather: Permanent summer with tropical levels of humidity and rainfall Price of a cup of coffee: A cup of kopi c (black coffee with milk) from a hawker centre will cost you roughly $1.80, while cafes can charge upwards of $6. Great place to see a sunset: East Coast Beach, or the open areas on the boardwalk right by the Fullerton Bay hotel.
Reuters
19-06-2025
- Business
- Reuters
Israel-Iran crisis climbs ladder of financial risk: podcast
Follow on Apple or Spotify. Listen on the Reuters app. Read the episode transcript. The outbreak of armed conflict between the two nations is a perilous new front in the ongoing Middle East hostilities. In this Viewsroom podcast, Breakingviews columnists discuss the dissonance between a mild market response and the manifold paths to further escalation. Follow Jonathan Guilford on X and LinkedIn (The hosts are Reuters Breakingviews columnist. The opinions expressed are their own.) FURTHER READING Gulf risk goes beyond a blocked Strait of Hormuz Iran attack shunts Gulf into more volatile realm Beijing has more at stake in Iran besides just oil Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit to opt-out of targeted advertising.
Yahoo
09-06-2025
- Business
- Yahoo
Reuters unveils Reuters Open Interest, a new data-driven market and finance commentary product
By Anna Szymanski -Reuters on Monday announced the launch of Reuters Open Interest (ROI), a new source for data-driven, expert commentary on market and economic trends for financial professionals. Drawing on Reuters footprint in 200 locations around the world, ROI provides a global perspective on the biggest financial and economic topics of the day. ROI is available to LSEG customers via Workspace and to Reuters users via and Reuters newsletters. In a time of great uncertainty in the global economy and financial markets, ROI helps readers make sense of the news with a panel of experienced in-house columnists and outside experts from the financial industry and academia. Their blend of subject matter expertise, analytical capabilities and use of data visualizations will provide readers with a deeper understanding of the trends driving capital allocation decisions worldwide. New formats and offerings will continue to be added as ROI grows. ROI expands on the authoritative fact-based coverage that Reuters is known for, with distinctive takes on financial and economic topics. The new offering builds on Reuters track record of delivering incisive commentary through Breakingviews, which provides agenda-setting financial insight in real time to corporate boardrooms, investors and policymakers. Breakingviews, which celebrates its 25th anniversary this year, has continued to innovate for subscribers via new features like 'The Big View' and a newly relaunched podcast. ROI's commentary covers a range of topics, including macroeconomics, foreign exchange markets, commodities, equities, bonds and emerging markets. Columnists bring more than 150 years of combined experience and include Ron Bousso on energy, Karen Braun on agriculture, Mike Dolan on markets, Andy Home on metals, Gavin Maguire on renewables, Jamie McGeever on markets and Clyde Russell on Asia commodities. Some external experts featured on the site in recent months include sovereign debt experts Lee Buchheit and Mitu Gulati; financial author Marty Fridson; Stephanie Guild, CIO of Robinhood Markets; Eurizon SLJ CEO Stephen Jen; investment strategist Joachim Klement; Mike Peacock, former Reuters Senior Editor; Jay Pelosky, founder of TPW Advisory; Manishi Raychaudhuri, CEO of Emmer Capital Partners Limited; and Fidelity International portfolio manager Taosha Wang. For more information on ROI, search ROI on Workspace or on here. (Anna Szymanski) Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Reuters
05-06-2025
- Business
- Reuters
AI arms race is only just getting started: podcast
Follow on Apple or Spotify. Listen on the Reuters app. Read the episode transcript. Microsoft, Alphabet, and Meta Platforms are set to spend $320 bln this year on data centres and other kit to power advanced chatbots. In this Viewsroom podcast, Breakingviews columnists explain why investors are willing to support a long game that will yield a return. (The hosts are Reuters Breakingviews columnists. The opinions expressed are their own.) FURTHER READING AI power demand is generating hallucinations Microsoft's AI future is trickier to price today Capital intensity will reprogram Big Tech values Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit to opt-out of targeted advertising.
