Breaking Waves
- The mind boggles. Club Med has invested in a ski resort in China. Way up in the northeast, in Heilongjiang Province, Club Med has bought into a financially-strapped ski resort. This may be an intriguing clash of cultures.
- President Obama’s approval of loan guarantees for two nuclear reactors in Georgia has split the unions. Construction unions love it, but the approval is drawing fire from the United Steelworkers because some 20% of the package will buy critical components from steelmakers in China or South Korea. The union is trying to create doubts about the safety of Chinese steel, but we are not talking about consumer goods here. China has been successfully manufacturing reactors, while our own industry has been moribund for thirty years. Why should we expect to be competitive on something with which we have little experience?
- We had the pasta war, several chicken wars, even the turkey ball war. But the toilet paper war is just beginning. Unions in Australia are challenging imports of cheap toilet paper from China and Indonesia, saying the product is being dumped (I’m not going to touch that pun). Having had personal experience with cheap toilet paper in both Indonesia and China, this dispute is self-limiting. Australian consumers are only going to buy it once.
- Brazil now exports more to China than it does to the United States, a reflection, of course, of the recession. The problem is that China buys a vastly different group of products than Brazil sells to U.S. customers. Brazil’s trade with the United States is mainly in industrial goods, but China is mostly buying commodities such as soybeans and iron ore. This destroys the value-added business of Brazilian product companies and sends Brazil back to the days of simply being a commodity supplier. This will presumably end when the U.S. economy moves into recovery. In the meantime, not everybody is dancing in Brazilian streets. For more, see the article in Asia Times.
- The recession also hurts the Cuban cigar trade. Sales were down by 8% in 2009, reflecting reduced international travel (which, of course, cuts sales at duty-free airport shops) and Spain’s economic downturn. Spain has historically been Cuba’s largest cigar market, but … up in smoke.
- A suit brought by Totes-Isotoner alleging gender discrimination in customs classifications was tossed out by a Federal appeals court this week. The company argued that having different duty rates for men’s and women’s clothing (a time-honored practice around the world) discriminated against whichever gender got the higher rate on a particular item of clothing. I would guess this is about gloves. The court in New York disagreed. Totes-Isotoner says they will appeal to the Supreme Court. (note: these classifications are set, at the 4-digit level, by international agreement – not by any one country.)
- Shipping lines complain loudly about all the empty containers they have to move westbound across the Pacific. So what do they do about it? They raise their westbound rates. What a novel idea – raise prices to attract business. Gotta think about that.
This entry was posted
on Saturday, February 27th, 2010 at 6:56 am and is filed under Brazil, China, Cuba, Finance & Investment, Korea, Shipping, Trade Policy.
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