Q&A: Paul Bingham, Director, IHS Markit Economics and Country Risk /
Following comments made by United States Trade Representative Katherine Tai last week week, regarding the White House’s new approach to the United States-China bilateral trade relationship, Logistics Management Group News Editor Jeff Berman caught up with global trade Paul Bingham, Director, IHS Markit Economics and Country Risk / Transportation Consulting.
In his role at IHS Markit, Bingham leads business advisory services product teams, advises on client engagements and report delivery, analyzes and forecasts freight transportation demand and infrastructure requirements, and drives business innovation. Paul primarily focuses on North American freight transportation markets, including the international trade of North America. Paul manages multimodal freight transportation market analysis and forecasting for public and private sector clients.
Bingham provided Berman with an overview of the USTR’s comment, the state of U.S.-China trade, as well as other topics. Their conversation follows below.
LM: What, in your opinion, are the supply chain and logistics takeaways of recent comments made by the United States Trade Representative Katherine Tai about the state of U.S.-China trade relations?
Bingham: I think it was great to hear what she included in terms of the U.S. relationship with China. From a trade perspective, it obviously has potentially enormous supply chain implications, but the bottom-line takeaway of that, in terms of how it would actually affect a shipper or the functioning of logistics, is some point in the future. It is not going to address the crisis we face now and it is probably not going to change some of the decisions people have to make.
LM: What types of decisions are those?
Bingham: If you are a BCO now, you are thinking that this is another layer of potential complication of the sourcing of goods into my supply chain…like they had to do when the Trump administration was imposing rounds of tariffs. There were deadlines imposed, and you had to pay attention to which commodities were covered and when those deadlines were going to take effect, and then you had to take action right away. There was nothing that specific in Tai’s comments that said “because of this, here is an action item takeaway with a deadline and a specific scope that I have to follow through on with no delay. There were some elements of that, though, with some potential changes to some of the tariffs. They are obviously going to look at the tariffs in place, and there was some language saying that there may be some additional changes down the road without defining what is included right now and what is in the queue to be looked at as the additional category later. I think she was alluding to—but did not say specifically—that there have been a number of industry complaints saying “you are penalizing U.S. companies because you have this one particular line- item tariff still in place. Give us an exemption for this.”
LM: How does this all fit in, or match up, with what is happening now?
Bingham: One example is the international import container chassis being still subject to tariffs right now. So, the cost of those with that 25% additional tariff is substantial for the leasing companies and others that are looking at spending the capital trying to alleviate the chassis shortage, which is part of the problem with port congestion and even the intermodal terminal congestion. Most shippers and BCOS are aware of that but may not realize that part of that problem is the tariffs that the U.S. imposed on those chassis under the Trump administration, which the Biden administration has kept in place. The USTR did not say that chassis are amongst those things that are constrained, in terms of how expensive they are right now. Nor did she get into some of the details for looking at domestic producers of those to expand production. It is something on the radar, as per the supply chain executive order issued by…