Hello from Washington, the cicada there has disappeared for 17 years.

Our main content today is the trade tensions with Canada, the source of which may be more difficult to resolve than the trade tensions with Boeing and Airbus in Europe.

Concession watersAt the same time, the shipping industry complains that changing the rules will impose a greater burden on them, which may do more harm than good.

Ease tensions with Canada

Just got off the plane from Brussels and defeated one of the ghosts of transatlantic trade relations by End tit-for-tat tariffs Through Airbus-Boeing, U.S. Trade Representative Catherine Tay can now focus on things closer to home. Including the growing dissatisfaction of Washington’s neighbors north of the border.

It is widely expected that as Donald Trump and his trusted deputy are banished to the wilderness of Florida, the cold relationship between Ottawa and Washington will thaw. To some extent they have.Canadian Prime Minister Justin Trudeau won the coveted award and became the first foreign politician to be called by the newly appointed Joe Biden (although this is traditional practice), and the two are fighting climate change Be consistent on major issues (although Biden has caused tensions in some areas Cancel license Used for Keystone XL pipeline).

But in the trade field, everything is not satisfactory. We have noticed the increasing friction, even though the new US-Canada-Mexico trade agreement is in place. The debate now ranges from dairy products to cork lumber, solar panels, digital taxes, and perennially closed borders (strictly speaking, it is not a trade issue, but it is rumbling).

Last week, Canada requested the establishment of a group under the USCMA’s dispute settlement mechanism to resolve the 18% tariffs imposed by the United States on Canadian solar products. Mary Ng, Minister of Trade of Canada Say The tariffs imposed by the Trump era that the Biden administration has not yet cancelled are “unfounded” and undermine “the global competitiveness of our long-established, secure and deeply integrated supply chain.”

As far as the United States is concerned, it has escalated complaints about tariff quotas related to dairy products and called for the establishment of a dispute resolution team. It said that Canada has basically reserved a portion of the quota for processors, which makes it more difficult for handmade cheeses to enter Canada through the low preferential tariffs agreed in the transaction.

Then, Washington became increasingly uneasy about Canada’s flirting with the digital service tax.Despite the progress made in the OECD negotiations on international taxation, Canadian Deputy Prime Minister Christia Freeland is still keen on move forwardWashington has threatened to impose tariffs on other countries that have implemented this measure through its Section 301 investigation process, although progress in international tax negotiations—especially among G7 countries—has seen the threat being delayed. US trade officials have evaded the question of whether we consider implementing Section 301 against Canada on several occasions, but official data shows that Dai “expressed concerns about potential taxation” during his meeting with Wu.

Then there is the perennial thorn of Canadian Cork, the Airbus-Boeing in the US-Canada relationship. Although, as one of Hill’s staff said, although the permanent solution to the aircraft subsidy struggle is-after 17 years of controversy-imaginable, it is difficult to see a solution to cork wood. The United States basically believes that Canada is subsidizing its timber industry because it does not charge enough to grow trees on public land.At the end of last month, the Ministry of Commerce issued a report Announced that it will consider increasing the existing anti-dumping duties on Canadian timber from 9% to over 18%.

“There is very little news from the United States that indicates a special relationship with Canada,” said Edward Alden of the Washington-based Foreign Relations Committee. He believes that there is a lot of “potential tension.” This is surprising-Canada is almost tied with Mexico as the United States’ largest merchandise trading partner, partly reflecting the integrated supply chain.

Although this list is frustrating, we think things will stabilize.we know South Park Has the weird ability to predict the future, but we don’t think the war against Canada is an imminent threat (for those who are not fans, here is what We mean it. Warning: it is not suitable for people who are easily offended). We don’t even plan to restart the tariff war on cheese. Generally speaking, the direction of travel seems to be to resolve the tariff war, not to start a new tariff war. Fighting with allies will ultimately only burn US political capital, just as Tyin was questioned by lawmakers for a series of random tariffs by Airbus and Boeing, which hit companies in their constituency. However, the list of trade stimulus is larger than we expected. We will focus on this space.

Concession waters

The European Union proposes to update its carbon emission rules. Its goal is to reduce emissions by 55% by 2030, but there may be risks in shipping that do more harm than good.

In an interview with the Financial Times Went out yesterdaySoren Toft, CEO of Mediterranean Shipping Company, stated that unless low-carbon fuels are easily available, these measures will have the opposite effect of their intentions. According to him, the lack of green fuel in the industry will mean that operators will be forced to slow down their ships to meet reduced demand, requiring more new ships to maintain service levels. Of course, the problem is that building these new ships (possibly in Asia) will have the effect of emitting more carbon.

In some ways, people are skeptical about the accuracy of these statements-we will be interested in the reader’s own opinion of this. At the same time, before making a decision on the extent to which the rules apply to the shipping industry, the changes in the price of carbon emissions are as follows. Claire Jones

Trade ties

Paul Krugman have deal with The current major macro question: Does the Fed have the right to treat the current surge in inflation as temporary?The Fed’s view is that many of the peaks we see-some of them are related to Supply chain deadlock ——It will boil soon.our own Robert Armstrong Watching regardless The era of globalization as a deflationary force Spend in his excellent Unhedged newsletter.

More about Sino-US relations.

After months of hard talk, Joe Biden now wants to sit down with Beijing, The President of the United States promoted meetings with senior officials.what is Propose a motion So far, Secretary of State Anthony Brinken and Chinese Foreign Minister Wang Yi will meet at the G20 meeting in Italy next week. The Biden administration also told Beijing that it hopes to send Deputy Secretary of State Wendy Sherman (Wendy Sherman) to visit China in the summer and is considering talking with President Xi Jinping. This is the second contact with him.

We have been paying close attention Semiconductor storyOne of the key factors of course is that the United States wants to reduce its dependence on chips made in Taiwan.With this in mind, the Nikkei report ($) US semiconductor giant Grofand Will invest more than US$4 billion to expand its Singapore fab and increase production capacity capacityIt is hoped that this will also ease the short-term supply pressure that we still see in the automotive and other industries. Amy Williams and Claire Jones