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Oncologists, refiners get tariff break; capsized carrier hinders Hyundai

The Supply Chain Daily provides a curated overview of Panjiva's research and insights covering global trade policy, the logistics sector and industrial supply chains and draws from global shipping and freight data.

Varian, Exxon Mobil may be winners from Chinese tariff exemptions
The Chinese government has exempted 16 products from tariffs on U.S. exports. The timing of the announcement may be arranged to help smoothen negotiations with the U.S. starting from the week of Sept. 16.

U.S. exports of the products covered were worth about $870 million in the 12 months to July 31, according to Panjiva analysis. A year-over-year decline of 27.9% in the past 12 months has accelerated to a 32.4% drop in the past three months, suggesting the impact on Chinese buyers of tariffs has become more pressing.

Agricultural products were the largest category with $437 million of shipments. Exports of lubricants, potentially including those by Exxon Mobil Corp. and Valvoline Inc. according to Panjiva's U.S. seaborne data, fell 46.6% to reach $271 million.

Linear accelerators, used for radiotherapy, are the only manufactured product line to get an exemption and were worth $162 million, including Varian Medical Systems Inc.'s shipments of its Vitalbeam and Trilogy models.

(Panjiva Research - Policy)

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Glovis shipping accident hinders Kia's growth, exacerbates Hyundai's woes
The Hyundai Glovis Co. Ltd.-operated car carrier "Golden Ray" has caught fire and capsized outside of the Port of Brunswick, Ga., marking a sadly not uncommon – but thankfully declining – shipping accident. International Maritime Organization figures shows total shipping incidents globally fell 83.4% year over year in the 12 months to June 30, while fire-related events fell 21.4%.

The vehicles lost likely belong to Glovis' sister firms Hyundai Motor Co. and Kia Motors Corp. There has been a marked increase in U.S. seaborne imports associated with Kia with a 27.3% year-over-year increase in the three months to Aug. 31, possibly linked to the success of the Stinger and Telluride models. Hyundai Motor, by contrast, has seen a 21.3% slide.

(Panjiva Research - Autos)

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Global EV sales power down; exports indicate Tesla-led recovery
Global plug-in electric vehicle sales fell 0.5% year over year in July, according to data from S&P Global Platts, reversing a 27.6% surge in the second quarter due to a drop in sales in both the U.S. and China. U.S. electric vehicle makers, led by Tesla Inc., may be expecting an improvement in Chinese sales one year on from the start of tariffs under the U.S.-China trade war.

U.S. exports to China have climbed 18.8% year over year in the three months to July 31, including a 484% jump in July alone. China's new purchase tax break for Tesla imports may help absorb the extra exports.

(Panjiva Research - Autos)

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Savannah dodges downturn as LA strikes bleak outlook
The outlook for U.S. ports may be bleak, with Port of Los Angeles Executive Director Gene Seoka stating that volumes in the latter part of 2019 will be below the tariff-beating surge of the prior year, while ports also "need a negotiated settlement of the U.S.-China trade war to restore global trade stability." Containerized handling across all U.S. seaports rose by just 0.1% year over year in August due to reduced imports from China, Panjiva data shows.

Los Angeles-bound volumes rose by 3.3% that came at the expense of a 7.7% slide at Long Beach.

Savannah was an outlier. Growth of 16.5% was led by both resilience in volumes from China, which climbed 9.2%. Shipments from the rest of Asia also increased as supply chains begin to react to tariffs. An example of this is imports from Vietnam, which surged 89.1% higher.

(Panjiva Research - Logistics)

No sign of an end to steel, aluminum national security tariffs
There is little likelihood of the Trump administration's section 232 tariffs on steel and aluminum being removed in the coming year. The WTO will not complete its review of complaints against the tariffs until at least autumn 2020, while the average utilization of U.S. steel mills has fallen below 80%, according to S&P Global Platts data.

Furthermore, U.S. imports of aluminum and steel rose by 24.7% and 1.4% year over year, respectively, in July. The growth in aluminum shipments was led by improved imports from Canada – which also rose by 24.7% – after tariffs were removed in May thanks to the newly-signed USMCA agreement. Additionally, relaxed sanctions against En+ Group IPJSC likely drove an 88.1% jump in imports from Russia.

(Panjiva Research - Metals & Mining)

East beats west as Panama transits hit 7-year high
The Panama Canal saw the highest number of vessels crossing since 2012 in August, with a 10.7% year over year surge, bringing the number of transits to 1,113. That’s notable given the slowdown in Transpacific traffic due to the trade war.

There is still evidence of the value of the Panama Canal for shipping from Asia to the U.S. east coast. U.S. seaborne imports from eight major Asian economies rose 10.7% year over year in August while shipments to the west coast increased by just 0.9%.

(Panjiva Research - Logistics)

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence.

The Supply Chain Daily has an editorial deadline of 5:30 a.m. ET. Some external links may require a subscription. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.