A look back at 2018
2018 was a challenging year for customs brokers. Indeed, several events have complicated trade, particularly between Canada and the United States. Whether it is the issue of surcharges on steel and aluminum, the trade dispute between the United States and China or the renegotiations surrounding NAFTA, there has been uncertainty for both importing and exporting industries. Here is a brief retrospective of some of the issues that marked the year 2018.
NAFTA 2.0: Canada-United States-Mexico Agreement
Of course, we cannot summarize the year 2018 without mentioning the long renegotiations of NAFTA. These took place in a rather tense climate, more precisely because of the difficult demands to reconcile between the three parties. On several occasions, we believed that there would simply not be an agreement between the countries involved; quite often, the American President threatened to tear up the agreement or abandon the renegotiations. Finally, after several rounds of renegotiations, an agreement was finally reached on September 30, 2018, and the agreement was signed on November 30, 2018. The agreement was named by the United States the United States-Mexico-Canada Agreement, or USMCA. For its part, Canada prefers to call it the Canada-United States-Mexico Agreement, or CUSMA. To learn more about the issues in resolved disputes, see this article.
Surcharges on steel and Aluminum
Another issue that has received a lot of attention is the issue of surcharges on steel and aluminum. In response to the surcharges imposed by the U.S. government, Canada has also imposed surcharges on certain steel and aluminum products and on a variety of other U.S. Items. While many saw a link between the protracted NAFTA renegotiations and the imposition of these surcharges by the United States, negotiators have always claimed to treat these two issues separately. In addition, although a new free trade agreement has been concluded between Canada, the United States and Mexico, surtaxes have not yet been abolished. However, there are ways to apply for rebates for companies that are subject to these surcharges.
Trade dispute between the United States and China
The trade dispute between the United States and China was a hot issue during 2018. The American president first pointed to China for its unfair practices in relation to foreign investors’ intellectual property. This was followed by an escalation of customs duties between the two countries. In total, $300 billion in imports were overtaxed. Despite this rise in tensions, the two countries finally declared a trade truce at the beginning of December 2018 and decided not to impose additional tariffs on each other. Both sides are giving themselves 90 days to try to reach an agreement that will put an end to this trade war.
What does 2019 have in store for us?
If 2018 was a rather turbulent year, what does 2019 have in store for us? Stability, we hope! Indeed, what better stability than stability for importing and exporting companies that want to invest abroad without having to deal with sudden tariff changes? In any case, the W2C team will remain on the lookout for upcoming developments and changes to keep you informed of what is happening in the customs environment.
Happy New Year 2019 to all!