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By Paul Page 

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The White House may have provided a template for new trade agreements in the pact just struck with South Korea. The deal came in part because the two allies have a bigger common challenge ahead in disarming North Korea, the WSJ's Kwanwoo Jun writes, but it also sets a potential framework for other negotiations the U.S. has underway or may be coming in the future. One trade expert in Seoul says the new deal provides an "exemplary case" for Canada and Mexico to follow, for instance, in renegotiating the North American Free Trade Agreement. Seoul officials say they made only "modest" concessions, and the deal is unlikely to shift trans-Pacific trade flows much if at all. U.S. auto makers appear to be the biggest winners, for instance, getting sharply higher quotas for exports to South Korea. But the car makers are nowhere near reaching even the current quota. South Korea also won a permanent exemption to new U.S. steel tariffs, demonstrating the tariffs will likely be on the table in negotiations with other countries.

Kansas City Southern's focus on international transport may prove costly under the new U.S. tax law. A provision in the law aimed at overseas income earned by U.S. technology and pharmaceutical firms is hitting some unexpected companies, the WSJ's Richard Rubin report, potentially including KCS freight rail operations that lean heavily on U.S.-Mexico trade. KCS says the new minimum tax will cost the company $25 million annually, the result of a measure aimed at trademarks and patents held by tech and pharma firms. KCS's assets are railcars, not patents, but the provision resets the math on foreign tax credits that companies use to calculate the taxes they pay abroad, and hits companies in high-tax countries -- like Mexico. It's a quirk of the new tax code, and it comes with another twist: U.S. companies could lessen the impact by transferring some spending to a foreign country, and out of the U.S.

China's automotive supply chain is getting much more global. Volvo Cars plans to start producing sport-utility vehicles for the business it jointly owns with Zhejiang Geely Holding Group Co., the WSJ's William Boston reports, the latest step by the Chinese company to take its Geely Auto business international. Under the new plan, Sweden-based Volvo will produce vehicles at a plant in Belgium for Lynk & Co, the business launched last year under Volvo and Zhejiang Geely. The new operation follows the announcement last month that the owner of Zhejiang Geely Holding had amassed a nearly 10% stake in Germany's Daimler AG, the owner of Mercedes-Benz cars, and it extends the technology and operational tie-ups that are pushing the Chinese auto maker onto the bigger international stage. Volvo will use technology it developed for its own compact SUV in the new Lynk vehicle, saving on costs and allowing the company to ramp up production quickly.

SUPPLY CHAIN STRATEGIES

Sometimes suppliers just have to draw a line. Newell Brands Inc., the maker of Sharpie markers and Paper Mate pens, has been fighting in the aisles with Office Depot Inc., contending the office-supply store wasn't doing enough to showcase its products and even pulling back shipments to the retailer over the past year. The WSJ's Sharon Terlep reports the impact hit Newell's fourth-quarter sales, triggered a string of director resignations and drew interest from activist investors. It's the latest and perhaps most extreme example of the fraying relations between vendors and store operators in a fast-changing retail environment. Office-supply outlets are increasingly under pressure as customers head online to buy staples, cutting into foot traffic and sales of other products. Historically, retailers and manufacturers have worked together to bolster sales. But conflicts are growing as retailers lower prices to win back shoppers from Amazon and other online sellers.

QUOTABLE

IN OTHER NEWS

The Federal Reserve Bank of Chicago's measure of U.S. economic growth rose at a sharp rate in February. (WSJ)

China's central bank guided the yuan to its strongest level against the U.S. dollar since its devaluation more than 2 1/2 years ago. (WSJ)

Cosco Shipping Ports Ltd. more than doubled its net profit in 2017 to $512 million. (WSJ)

The Mexican government's airport company raised around $1.6 billion to partly finance construction of a new Mexico City airport. (WSJ)

Britain's JD Sports Fashion is buying U.S. retailer Finish Line Inc. for $558 million. (WSJ)

Building-materials supplier USG Corp. rejected a buyout offer from Germany's Gebr. Knauf KG. (WSJ)

New Zealand's imports rose to a new high for a February. (MarketWatch)

Singapore's manufacturing output jumped 8.9% last month on strong semiconductor production. (Channel NewsAsia)

FedEx Corp. reserved 20 Tesla Semi trucks to test in its FedEx Freight fleet. (Memphis Commercial Appeal)

Amazon.com Inc. is stepping up collections of state sales tax but often leaves city taxes out of the mix. (New York Times)

Walmart Inc. named Simon Belsham, formerly of British retailer Tesco PLC, as president of its Jet.com e-commerce business. (TechCrunch)

Apple Inc. supplier Huayou Cobalt Co. is joining a group promoting the ethical sourcing of cobalt. (Bloomberg)

Yang Ming Marine Transport Ltd. swung to a $10.8 million net profit in 2017 on a 13.6% gain in revenue. (The Loadstar)

Bulk carrier Polaris Shipping entered the tanker sector under a vessel-pooling agreement with Navig8 Ltd. (IHS Fairplay)

A Romanian state-owned group will buy a controlling stake in the Daewoo Mangalia Heavy Industries shipyard. (MarineLink)

Shipping tycoon Evangelos Marinakis was charged in Greece with drug trafficking and financing a criminal enterprise. (The Guardian)

Persistent congestion at the Port of Montreal is delaying shipments and raising shipping costs. (Journal of Commerce)

DP World will spend up to $1 billion to build a deepwater port at the Democratic Republic of the Congo. (Port Technology)

Businesses run by two freight brokers will pay $900,000 to settle a federal investigation into accusations they cheated owner-operators. (Commercial Carrier Journal)

Starbucks Inc. will test blockchain technology for tracking its coffee beans. (Supply Chain Dive)

ABOUT US

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

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

(END) Dow Jones Newswires

March 27, 2018 06:46 ET (10:46 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.