BG Bunge Global SA

By Paul Page 

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U.S. agriculture exporters may be concerned about tough talk on trade, but they're not seeing the impact in overseas markets. The chief executive of Bunge Ltd., one of the world's big commodities traders, tells the WSJ's Jacob Bunge the balance between price and supply remains the major factor that purchasers of U.S.-grown crops consider in moving goods around the world. Agricultural traders have watched warily as Mr. Trump ratcheted up criticism of trade policies, and some are looking at the risks to their supply chains. Archer Daniels Midland Co. says it is prepared to adjust its grain-processing operations in the event of new trade waves. Recent figures from U.S. ports suggest exports are steaming ahead: the ports of Los Angeles and Long Beach reported a combined 20.5% year-over-year increase in outbound flows in January. Still, the volume was down from the previous three months, a slowdown that may get the attention of some exporters.

Manufacturers of pickup trucks have special reasons to be worried if the U.S. scuttles the North American Free Trade Agreement. Companies including General Motors Co., Toyota Motor Corp. and Fiat Chrysler Automobiles NV could see the immediate end to an exemption from a 25% duty the U.S. imposes on all pickup trucks and some work vans produced outside the country, the WSJ's Robbie Whelan reports. The exemption to what's known colorfully as the "chicken tax" is included in Nafta, and trade experts say it would disappear if the trade agreement is gutted -- highlighting the way Nafta's many provisions have been embedded into the costs of products. The tax originated in a trade dispute between the U.S. and West Germany back I the 1960s over American poultry exports. For pickup truck makers and buyers, dropping it would amount to more than chicken feed: Last year through November, the U.S. imported $18.5 billion worth of vehicles from Mexico that would be subject to the tax.

The U.S. business community in China is starting to line up behind calls for a tit-for-tat approach with Beijing on trade and investment. After years of caution, the WSJ's Mark Magnier and Josh Chin report, the companies are embracing some of the Trump administration's tough talk in hopes of gaining better access to China's markets. Shipping and logistics companies would certainly like better access. Many Western freight operators that once sought big returns in China have tamped down investment and expectations as they've grown frustrated along with other companies at the country's restrictive industrial and economic policies. Now, the American businesses say they want reciprocity. Some point as an example to Chinese e-commerce giant Alibaba Group Holding Ltd., which is able to run its own data center in Silicon Valley while rival Amazon.com Inc. and other U.S. companies are only allowed to invest in Chinese cloud businesses with local partners.

ECONOMY & TRADE

U.S. consumers and factories are doing their part to match the growing shipping demand. New reports this week point to more goods moving through the economy, the WSj's Ben Leubsdorf reports, suggesting solid momentum to start the year. Retail sales expanded 5.6% year-over-year in January and even picked up from December, growth that came as retailers maintained imports at a healthy pace following the holidays in an apparent display of confidence in the consumer economy. The sales expansion comes as retailers seem to have exerted greater discipline in stocking -- the industry's inventory-to-sales ratio has been at relatively low levels after store owners piled up goods far beyond demand earlier last year. The economic growth isn't changing some bigger underlying trends however: department store sales fell last month from a year ago while sales at "non-store retailers," including e-commerce companies, saw sales grow 12%.

A battle over online payments in the European Union is a fresh reminder that e-commerce regulation remains a work in progress. Business groups are slamming a European Union proposal that would require customers to enter extra security information for online purchases above a nominal amount, the WSJ's Todd Buell reports, saying tighter controls could cut online sales by more than $11 billion a year. Credit-card companies and e-commerce associations worry customers will abandon online purchases if they become too cumbersome, while consumer groups insist there shouldn't be tradeoff in protections against fraud. The battle comes as retail groups in the U.S. are still seeking changes that would make it easier for states to collect sales taxes on online purchases. With forecasts of strong growth in cross-border e-commerce demand, those questions will only grow larger as more consumers shop beyond their home countries.

QUOTABLE

IN OTHER NEWS

Japan's SoftBank Group is buying Fortress Investment Group LLC, which owns regional railroads Florida East Coast Railway and RailAmerica. (WSJ)

Retail-industry executives told President Donald Trump at a White House meeting a proposed import tax would have "profound implications" as it raises prices for consumers. (WSJ)

European Union lawmakers approved a preferential trade deal with Canada. (WSJ)

The eurozone recorded its largest annual trade surplus since the euro currency was established in 1999, helped by expanding exports late last year. (WSJ)

Canadian factory sales surged at a surprising 2.3% pace in December. (WSJ)

U.S. motor-vehicle fatalities rose 6% last year to the highest level since 2007, as vehicle miles traveled rose 3%. (WSJ)

U.S. Steel Corp. is withdrawing a legal claim that hackers in China stole a key recipe for high-tech steel. (WSJ)

The European Parliament voted to include international shipping in Europe's emissions trading system. (Ship & Bunker)

CMA CGM SA joined Maersk Line in agreeing to sell container shipping space through Alibaba Group Holding Ltd. (The Loadstar)

Mediterranean Shipping Co. is in talks to acquire a stake in Italy-based cargo vessel operator Linea Messina. (Reuters)

Japan Post is planning job cuts at the Toll Group amid reports the freight business it acquired in 2015 is foundering. ( Australian Financial Review)

Wal-Mart Stores Inc. denies a report in the Korea Times that the retailer has terminated contracts with South Korean ocean carriers. (American Shipper)

Amazon.com Inc. is opening a bookstore in Walnut Creek, Calif., its first move into the San Francisco Bay area. (San Francisco Chronicle)

Amazon will lease a 1 million-square-foot distribution center in Eastvale, Calif., in the state's Inland Empire due to open next year. (Chain Store Age)

Roll-on/roll-off cargo, which includes farm and construction equipment, fell nearly 8% at the Port of Baltimore last year. (Baltimore Sun)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

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Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

February 16, 2017 06:56 ET (11:56 GMT)

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