Crypto News: Supply Lines: How tariffs backfire

The US debate about tariffs has often focused on either who pays for them or the broader economic impact. What gets less attention: The way they can end up being used as cudgels in messy commercial fights.

Consider what happened after the US in 2021 imposed anti-dumping tariffs on the humble trailer chassis — those steel frames on wheels used to carry shipping containers behind big rigs. They got their 15 minutes of fame during the pandemic because they fell into short supply. Now they're the main character in a new feature in the annual economics issue of Bloomberg Markets magazine.

Here are the key players:

China International Marine Containers, or CIMC, is a Chinese firm that dominates the global shipping container market. At its height CIMC sold more than 45,000 new Chinese-made chassis annually in a US market of 70,000 to 80,000. That business dried up when the tariffs went into place. CIMC didn't give up, though. It shifted production to the US. It also created a new non-Chinese supply chain.

A US competitor, Pitts Enterprises, was part of the coalition that lobbied for the tariffs and decided not just to ramp up US production but to team up with a Vietnamese company to import almost 18,000 new chassis.

In a saga that played out in small-town America, both companies were were part of separate investigations into the sourcing parts from China and circumventing the tariffs. CIMC was eventually cleared, and Pitts is still fighting its ruling.

What's the lesson learned? Tariffs sound simple enough when politicians threaten them, but they often turn costly and complicated not just for the targets of the levies but those they're meant to protect, too.

—Shawn Donnan in Washington

Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Port project | Somalia's coastal town of Hobyo will see the start of construction of a new port in December, with the facility ready for use in three years. Metag Holding, a Turkish company based in Ankara, will work with Hobyo Investment to build the harbor that would be about 435 miles northeast of the capital of Mogadishu, company representative Mohammed Ali Warsame said. The firms have allocated $70 million for the first phase of the project.

Maersk and Hapag-Lloyd, the two container giants starting a vessel-sharing cooperation called Gemini on Feb. 1, plan to begin the partnership sailing south of Africa, indicating they expect the Red Sea to remain unsafe well into 2025.
Inditex's CEO said the Spanish company is positioned to meet sustainability targets, including reducing the bulk of emissions along its supply chain. Separately, Honda said it's open to altering its electrification roadmap if demand for pure battery cars continues to wane.
The US trade deficit narrowed in August to the smallest in five months, helped by a larger services surplus and a pickup in merchandise exports. Separately, Canada recorded a C$1.1 billion trade deficit in August as crude oil exports fell.
Hurricane Milton churned toward Florida's west coast as a dangerous Category 5 storm, with flooding and high winds expected to inflict widespread damage and put lives at risk.
Airbus' already-reduced annual delivery goal has increasingly become a long shot. Separately, a UK aerospace supplier warned of lower near-term sales to Airbus and Boeing amid supply chain issues and a crippling strike at the US planemaker.
Mexico's new president plans to lay out clear rules for private investment in the power sector.
France's wine production for 2024 is seen dropping 22% in 2024 due to bad weather across all growing areas.

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Port congestion in Asia could ease gradually in coming weeks after the US dockworker strike was over in just three days, minimizing the potential global disruptions, according to Bloomberg Intelligence.
Chinese Premier Li Qiang will pay an official visit to Vietnam from Oct. 12 to Oct. 14, according to a statement on Vietnamese government's website.
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
See DSET CHOKE for a dataset to monitor shipping chokepoints.
For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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