Latest news with #internationalTrade
Forbes
5 days ago
- Business
- Forbes
How do tariffs Impact climate adaptation
Recently, Jefferies, a big investment bank, invited me to give a webinar on tariffs and rising trade protectionism to their clients working on sustainability. What became clear from that webinar is that there is a real curiosity about how regulatory measures such as tariffs shape our ability to adapt to a warming world. The curiosity is timely as the recent months of international trade have been unlike anything the world has seen before. To the extent that Richard Baldwin, a famous trade economist who has been studying and publishing on international trade for several decades, in a recent LinkedIn post questioned why Trump is negotiating tariffs with himself—in public. This line may seem funny initially, but one cannot ignore the point: the US introduced tariffs with several countries and then brought them down or put them on hold a few weeks after they were announced. One thing that is being impacted by this tariff drama, however, is our efforts to adapt to a warming world. Climate adaptation is a term scientists use to reduce climate risk and vulnerability, mainly by adjusting existing systems. A related term is climate-resilient development, which integrates adaptation measures and enabling conditions, such as governance, finance, capacity building, and decision-making processes. Adaptation and climate-resilient development are the foundations of our coping strategies for a warming world. Tariffs adversely impact climate adaptation by creating higher challenges. Estimates from the Intergovernmental Panel on Climate Change show that scenarios of an increase in protectionism lead to emissions that are at least three times higher than in a sustainability-focused scenario. Emissions are higher because such protectionism slows the pace of the transformations needed to address a future climate crisis. Let's examine what these transformations involve and how they can be impacted. Adaptation finance is already underfunded, with estimates showing a gap of $215 to $387 billion by 2030. The estimates are from the UN Adaptation Gap Report calculated based on submissions made by countries in their national adaptation plans and modeled adaptation costs. The highest financial needs are in agriculture, water, and infrastructure. In terms of regions, many low-income countries are particularly vulnerable, but developing countries overall have a larger adaptation finance gap. The gap for the former, i.e., low-income countries, is narrowing as public finance is beginning to prioritize them, according to the report. With the increase in tariffs, and as many developed countries prioritize their national interests by retaliating against US tariffs, the indirect effects could further limit available funding for adaptation—both national and international funds—to vulnerable sectors and regions under public finance. Private finance is also not at the level required. Only 1 in 3 companies have disclosed plans to adjust to the physical impacts of climate change. According to a recent S& P analysis of 1,200 most prominent companies, projected cumulative costs from climate exposure through 2050 could be as much as 74% of their total revenue—or 31% of the total market capitalization of these companies in 2024. These costs are driven by physical climate risks such as extreme heat, water stress, and drought. Among the sectors that have made slower progress are healthcare companies and communication services. This slow progress is concerning as the adaptation needs of these sectors are essential. For instance, hospitals in coastal areas may need to adapt to rising sea levels, and communication services that rely on physical infrastructure may need to adapt to rising temperatures. Investments in climate adaptation must increase to cope with the rising costs of worsening climate hazards. However, with increase in retaliatory tariffs as companies go into survival mode to maintain stable margins amid the tariff tug-of-war, everything else can expect to take a back seat. Experts are already expressing this uncertainty, as highlighted in a recent report by Quantum Commodity Intelligence. Increasing tariffs can divert attention from inherent vulnerabilities in our systems. One area where this becomes evident is in the soy markets. Some news outlets have already reported that one of the first supply chains to feel the impact of rising tariffs was the soybean supply chain between China, the United States, and Brazil. Due to uncertainty in trade with the US, Brazil's share of soybeans supplied to China has increased over the years. To understand that better, it is helpful to look into some numbers. China's soybean imports account for about 62% of global soybean imports. The US is among the key suppliers to the Chinese soy market. However, with the uncertainty around retaliatory tariffs, this status is changing. In 2000, Brazil's share of the Chinese soybean market was 20% compared to the US at about 50%. Today, Brazil accounts for 71% of China's soy imports, while the US has dropped to 21%. The numbers speak volumes on how tariffs are rerouting soft commodity supply chains. These trade shifts are causing environmental degradation. Data indicates that deforestation in Brazil's Pampas biome increased following the 2018 US-China trade war, one reason for that was China's growing demand for soy. Traceability in the soy imported from Brazil is already challenging, so there are limited means to know whether or not the soy is coming from deforested regions. According to the Coller FAIRR Protein Producer Index of the FAIRR Initiative, an investor network that raises awareness of the material risks and opportunities in the global food sector, disclosures on deforestation by some of the biggest Chinese companies are already low 75 % of the Chinese companies in the above Index—lack a deforestation-free target for soy. Deforestation not only releases the carbon stored in trees into the atmosphere but also creates challenges for adaptation by increasing the incidence of droughts, making it more difficult for local communities to cope with rising temperatures. For example, throughout the Amazon, 69% of municipalities have been recording drought rates even more intense than those of 2023—a 56% increase over the same period last year. There were also reports that 209 pink and grey river dolphins were found dead in Lake Tefé, in Amazonas state, mainly due to the overheating of the waters. Tariffs divert attention from the transformations needed to address climate and nature impacts. It's vital that our decision-makers—in both private and public sectors—do not let the tariff drama come in the way of long-term progress needed for adapt to a warming planet
Yahoo
7 days ago
- Business
- Yahoo
Amid rising anti-globalism, Baumgartner defends U.S. role in the world
May 28—Four months into a presidential administration that has sharply pivoted into a more aggressive stance with foreign nations, slashed foreign aid and proposed deep cuts to the State Department, Rep. Michael Baumgartner met in Spokane Wednesday with former ambassador Ryan Crocker and retired Vice Admiral Mike LeFever to argue America should not retreat from the world stage — though largely without any pointed criticism of the White House. "America today faces a more complex set of national security challenges, I think, at any time since World War II," Baumgartner said. "There's almost no issue that happens anywhere in the world that doesn't have impacts everywhere else, so, truly, we are all connected." The freshman GOP congressman expressed concern that Americans, including those in Eastern Washington, have become increasingly detached from world affairs, such as the war in Yemen, simmering tensions between Israel and Turkey, counterterrorism operations in Syria, the likelihood of increased refugee emigration in the future and more. The invite-only panel, hosted by the international affairs-focused organization U.S. Global Leadership Coalition, drew a relatively small crowd of business, military, religious, university and political representatives. In info sheets laid out on each guest's seat, the coalition laid out Washington's dependence on international trade — $61.2 billion in exports in 2023 supporting more than 930,000 jobs — and made arguments in support of international aid that appeared tailored to try to appeal to a White House that has gutted USAID, placing nearly all of its staff on leave and terminating 85% of that agency's outstanding grant awards and 80% of its global health awards. "MYTH: All U.S. foreign assistance goes to 'woke' or progressive programs focusing on cultural issues that many partner countries don't want anyway," one pamphlet read. "FACT: The vast majority of U.S. international assistance programs strongly align with Secretary (Marco) Rubio's imperative to make America safer, stronger, and more prosperous." The coalition argues that foreign aid and civilian initiatives can buoy the country's global position alongside its military operations, encapsulated in a banner outside Wednesday's event, in which former Secretary of Defense James Mattis was quoted as saying that cutting the State Department's budget meant the military needed to buy more ammunition. LeFever strongly agreed, saying that U.S. relief efforts in Pakistan following the devastating 2005 Kashmir earthquake had boosted America's approval rating in that country to its highest ever. Crocker noted he still saw the positive impact of that operation in America's standing in that region 20 years later. Baumgartner agreed that foreign aid could be strategically beneficial to the U.S. and argued that Rubio and the White House fundamentally felt the same, but echoed the sentiment that "identity politics" in USAID's programming had burdened the office's budget and caused domestic sentiment to sour on foreign aid. "I mean, I certainly am not in favor of some of the transgender operas in Peru and this sort of thing that the previous administration has done," Baumgartner said, echoing and somewhat garbling a claim made in February by White House press secretary Karoline Leavitt. A $25,000 grant awarded in 2021 under the Biden administration was for a university to produce an opera that would "raise awareness and increase... transgender representation," though it was in Colombia and not issued by USAID, but by a different office in the State Department. That same office also issued a $32,000 grant to a Peruvian organization to fund a comic book that featured "an LGBTQ+ hero to address social and mental health issues." In 2024, USAID's budget was $21.7 billion. Overall, foreign spending totaled nearly $72 billion, according to the Pew Research Center. As the coalition emphasized in one of its packets, the U.S. international affairs budget accounts for roughly 1% of the federal budget. Baumgartner did praise certain USAID programs, including the 2003 "President's Emergency Plan for AIDS Relief," or PEPFAR, which the congressman called "the best thing America has done, from an altruistic standpoint, in the last 20 years." "And my early indications from Secretary Rubio or in the administration is that — obviously there's a lot of high-profile political stuff going on, but they fundamentally understand the need to fund assistance as well," Baumgartner said. The Trump administration's February stop-work order initially froze funding for PEPFAR programs, though the State Department did issue a limited waiver specifically for PEPFAR, allowing certain treatment programs to continue but not others, such as HIV prevention and ones for orphans and vulnerable children, according to a May report from health policy organization KFF, formerly known as the Kaiser Family Foundation. Hundreds of other HIV-related USAID grants were terminated. In one of the few critical comments of the event, Crocker argued that the White House's efforts to use Biden-era programs to justify gutting USAID was an example of the "extreme polarization that we're seeing in American politics." "The USAID, like any executive agency, is the tool of the executive," Crocker said. "That's what it exists to do, to carry out the policies of the president of the United States as resourced by Congress." "What we've now gotten ourselves into, I think, and as we look at the wholesale destruction of USAID, I think it is unfortunately the poster child for polarization," Crocker continued. "Those programs were not the creation of USAID, they were the creation of the previous administration. And I greatly fear at this juncture we are doing ourselves great institutional damage by effectively eliminating USAID, and fasten your seatbelts at the State Department; that's happening next." Baumgartner did caution against the "lure of isolationism," which he argued both parties faced. "I think everyone in this room understands that there's some ongoing political challenges for both parties on this lure of isolationism, that if we just come home, we can save money and we won't have to get trapped and everything will be fine," Baumgartner said. "And I think it's just an illegitimate viewpoint and a misunderstanding of the world." The U.S. needs more foreign alliances, not fewer, Baumgartner said — and one way to do that, he argued, is cutting red tape that slows down the sale of military equipment to foreign countries. "We sell equipment to other countries, we bind them to us," he said. "We can work with them, and we help our local economy, and people really want American military equipment." But Baumgartner lamented that "like many things in the U.S. government," the process to sell weapons overseas had become too "bureaucratic and problematic to actually implement," adding that he was working in Congress to make that process speedier.
Entrepreneur
28-05-2025
- Business
- Entrepreneur
Understanding the First Sale Rule in U.S. Customs Law
The first sale rule is a significant provision in U.S. customs law, offering importers a strategic advantage when calculating duties on imported goods. This legal concept allows businesses to base... This story originally appeared on Due The first sale rule is a significant provision in U.S. customs law, offering importers a strategic advantage when calculating duties on imported goods. This legal concept allows businesses to base their duty calculations on the lowest cost of goods in a multi-tiered transaction, potentially resulting in substantial savings for companies engaged in international trade. Under standard customs procedures, importers typically pay duties based on the price they pay to acquire goods from foreign suppliers. However, the first sale rule creates an alternative pathway to reduce these costs in specific supply chain structures significantly. How the First Sale Rule Works The rule applies to multi-tiered transaction chains where goods change hands multiple times before reaching the U.S. importer. In such scenarios, the rule permits importers to calculate duties based on the 'first sale' price—the amount paid in the initial transaction between the manufacturer and the middleman—rather than the higher price paid by the U.S. importer to the middleman. For example, if a manufacturer in Asia sells products to a trading company for $80 per unit, and that trading company then sells to a U.S. importer for $100 per unit, the first sale rule would allow duties to be calculated on the $80 price rather than the $100 price. This calculation method can create significant savings, especially for high-volume importers or those dealing with products with higher duty rates. Requirements for Using the First Sale Rule Importers seeking to take advantage of this provision must meet several key requirements: The initial sale must be a genuine 'arm's length transaction' between unrelated parties The goods must be destined for export to the United States at the time of the first sale The importer must maintain detailed documentation proving the transaction values The middleman must act as more than just a paper company, adding real value to the transaction Customs authorities scrutinize first sale claims, requiring importers to provide substantial evidence supporting their valuation method. This typically includes sales contracts, purchase orders, invoices, proof of payment, and other documentation establishing the legitimacy of the transaction chain. Strategic Importance for Importers The first sale rule represents a valuable duty-saving opportunity for businesses with complex global supply chains. When properly implemented, this strategy can reduce customs costs by 10-20% or more for companies importing high-duty items or dealing in large volumes. The savings can be dramatic,' notes one trade attorney who regularly advises clients on customs matters. For companies importing millions of dollars in goods annually, even a slight percentage reduction in duty rates translates to a substantial bottom-line impact. The rule has gained increased attention recently as tariff rates have risen on many products, particularly those from China. As companies face growing pressure to control supply chain costs, customs strategies like the first sale rule have become more central to financial planning. Despite its advantages, the first sale rule remains underutilized by many importers due to its documentation requirements and the need for careful supply chain structuring. Companies considering this approach should work with customs experts to ensure compliance with all regulatory requirements while maximizing potential savings. The post Understanding the First Sale Rule in U.S. Customs Law appeared first on Due.
Associated Press
27-05-2025
- Business
- Associated Press
Geopolitical tensions lead to increasing risks for shipping sector globally
SINGAPORE - Media OutReach Newswire - 27 May 2025 - The fast-changing geopolitical landscape is creating new risks and challenges for a shipping industry already juggling the energy transition and the legacy of the Covid-19 pandemic, according to Allianz Commercial's Safety and Shipping Review. The industry faces an increasingly volatile and complex operating environment, marked by attacks against shipping, vessel detentions, sanctions, as well as the fall-out from incidents involving damage to critical sub-sea cables. Furthermore, the ripple effect of increasing protectionism and tariffs threatens to remake supply chains and shake up established trade relations. Given 90% of international trade is transported across oceans, those developments are concerning, especially as the industry continues to see the potential for large claims from traditional risks such as fires, collisions and groundings, which are still the main drivers for total losses of large vessels. However, there is also good news. The shipping industry has made significant improvements when it comes to maritime safety in recent years. During the 1990s the global fleet was losing 200+ vessels a year. This total had halved 10 years ago and is now down to a record low of 27 as of the end of 2024 (from 35 in 2023). 'The relevance of political risk and conflict as a potential cause of maritime loss is increasing with heightened geopolitical tensions. Total losses from traditional causes may have reduced over time, but we could be in a position where this positive trend is potentially offset by war and other political-related exposures. As an industry, we are in a better position with regards to traditional risks, but there is a renewed focus on geopolitical risks,' says Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. US-China trade conflict and growing shadow fleet bring uncertainty and challenges China has been the biggest target of the protectionist measures of the US administration with tariffs reaching 145%, before both countries agreed to reduce them for 90 days. Developments have significantly impacted global maritime trade with approximately 18% of it subject to tariffs as of mid-April 2025, compared with 4% in early March, and dramatic declines in shipments reported in the immediate aftermath of the 'Liberation Day' announcements. While the future of US trade-focused policies remains uncertain, another phenomenon is posing an increasing challenge for the maritime and insurance industries: the shadow fleet. Since the start of the war in Ukraine, the size of the shadow fleet has grown significantly. Today, around 17% of the world tanker fleet is thought to belong to the shadow fleet: estimates indicate there are close to 600 tankers trading Russian oil alone. Shadow fleet vessels have been involved in tens of incidents around the world including fires, collisions and oil spills. 'Although recent sanctions are making it harder for these vessels to trade, the shadow fleet continues to pose a serious risk to maritime safety and the environment, as many are likely to be older vessels that are poorly maintained and inadequately insured. In case of an oil spill involving a shadow fleet tanker, cleanup costs could be as much as US$1.6bn,' says Justus Heinrich, Global Product Leader, Marine Hull, Allianz Commercial. Red Sea rerouting: older vessels and riskier routes in addition to higher costs With ongoing geopolitical volatility in the Middle East, many ship operators have rerouted vessels around the Cape of Good Hope, adding time and cost to transits between Asia and Europe. For example, this rerouting adds around $1mn in costs and at least 10 days to a typical transit between China and Europe. According to estimates, cargo volumes in the strait had fallen by two-thirds by September 2024, with rerouting costing the global economy some US$200bn that year. The quality and safety of vessels may also be impacted as a result of this rerouting. 'With container capacity under pressure, some shipowners have gone out to the market to meet supply, purchasing tonnage that is often older and second best. This has helped push up values and seen vessels scheduled for scrap and older tonnage stay in the market longer. The concern is that when called back into service, these vessels may not be in the best state to operate safely on longer sea routes and in rough weather,' says Captain Nitin Chopra, Senior Marine Risk Consultant, Allianz Commercial Asia. Fires and mis-declared cargo remain a top concern for large vessels Large vessel fires are still a major concern for hull and cargo insurers. There were seven total losses reported across all vessel types during 2024, the same number as a year earlier. The number of incidents overall was up year-on-year to a decade high of 250, again across all vessel types. Around 30% of these fire incidents occurred on either container, cargo or roll-on roll-off vessels (ro-ros) (69). More than 100 total losses of vessels have been caused by fires in the past decade. Efforts to mitigate these risks are underway, with regulatory changes and technological advancements aimed at addressing mis-declared cargo, a primary contributor to such fires. This is critical as the electrification of the global economy poses further challenges given the growing number of lithium-ion batteries and battery energy storage systems being transported. 'There is little doubt the shipping industry is becoming more resilient against the risks associated with large vessels, although we can by no means say they are under control. However, only 27 total losses during 2024 underlines the positive trend. To put this into perspective: there are over 100,000 ships (100GT+) in the global fleet. However, uncertainty and multiple risks persist. Cyber-attacks and GPS interferences are increasing. Ceasefires have raised hopes, but the Red Sea security threat and supply chain disruption will likely remain. Meanwhile, the green transition requires much work. The coming years will be decisive and will determine the path of the sector and global trade,' explains Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. Hashtag: #shipping #allianzcommercial The issuer is solely responsible for the content of this announcement. Allianz Commercial Allianz Commercial is the center of expertise and global line of Allianz Group for insuring mid-sized businesses, large enterprises and specialist risks. Among our customers are the world's largest consumer brands, financial institutions and industry players, the global aviation and shipping industry as well as family-owned and medium enterprises which are the backbone of the economy. We also cover unique risks such as offshore wind parks, infrastructure projects or film productions. Powered by the employees, financial strength, and network of the world's #1 insurance brand, we work together to help our customers prepare for what's ahead: They trust us in providing a wide range of traditional and alternative risk transfer solutions, outstanding risk consulting and Multinational services as well as seamless claims handling. Allianz Commercial brings together the large corporate insurance business of Allianz Global Corporate & Specialty (AGCS) and the commercial insurance business of national Allianz Property & Casualty entities serving mid-sized companies. We are present in over 200 countries and territories either through our own teams or the Allianz Group network and partners. In 2024, the integrated business of Allianz Commercial generated around €18 billion in gross premium globally.
ABC News
26-05-2025
- Business
- ABC News
How IKEA is tackling Trump's tariff tirade
The global trading system is going through one of its most tumultuous periods in recent history as President Donald Trump continues his tariff regime. Less than 48 hours after he announced a 50 per cent tariff on European countries, President Trump paused it, to give more time for trade negotiations. So how are international companies navigating this uncertainty and what will it mean for global supply chains? GUEST: Karen Pflug, Chief Sustainability Officer, Ingka Group, IKEA franchisee
