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October 28 2019

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Spotlight 6 The Journal of Commerce | October 28 2019 A fragile peace The "phase one" trade agreement US and Chinese negotiators and announced on Oct. 11 has temporarily mitigated tensions between the two countries, but significant obstacles must be overcome before a more substantive deal is reached, according to a US-China business expert. "All this did is put a floor under the tension," Matthew Margulies, executive vice president of the US-China Business Council, told West Coast freight forwarders and customs brokers on Oct. 13. The agreement suspends a tariff increase on $250 billion of US imports that was scheduled to take effect on Oct. 15 and includes a commitment from China to purchase $40 to $50 billion in US agricultural exports. But overall, it is a "partial, skinny deal," Margulies told the Western Cargo Conference of forwarders and brokers. "This is a 'phase one' deal. We're nowhere close to getting a phase two or three deal," he said. Although US farmers may be encouraged by China's promise to purchase $40 to $50 billion worth of agricultural products, Margulies cast doubt on whether that number will be reached. He said US sales of farm products to China in 2017, before the trade war began, were $25 billion. "So, China will double that?" he asked. The bottom line for US importers is that they must continue both to evaluate their presence in the Chinese market in terms of short-term sourcing needs, and to develop a longer-term sourcing strategy that may include a shi to other countries, including in Southeast Asia. For US exporters, the challenge is to preserve the markets they worked hard to develop over the past 10 years. "Don't lose market share. Once you lose market share, you can't get it back," Margulies said. Rails nudge shippers toward trailers Two refrigerated (reefer) intermodal carriers have purchased more than 1,000 containers combined this year as part of a larger effort by some US Class I railroads to limit the use of trailers by shipper customers. Using containers instead of trailers benefits all shippers, according to the railroads, because they can fit more cargo onto each train and maximize terminal space by double stacking. The ability to stack is being pitched as a way to maximize throughput without jeopardizing terminal fluidity, according to Marten Transport and KLLM Transport. The two refrigerated carriers are the latest The Journal of Commerce Executive Editor, The Journal of Commerce and JOC Events: Chris Brooks 609 649 2181, Executive Editor, The Journal of Commerce and Mark Szakonyi 202 872 1234, Managing Editor: Benjamin Meyer 916 716 6272, Associate Managing Editor: Kevin Saville, 212 488 4282, Senior Editors: William B. Cassidy Trucking and Domestic Transportation 202 872 1228, Bill Mongelluzzo West Coast 562 428 5999, Hugh Morley Northeast, Mexico 646 679 3475, Eric Johnson Technology 213 444 9326, Janet Nodar Breakbulk and Heavy Li 251 473 2742, Greg Knowler Europe +44 7976798770, Turloch Mooney Global Ports +852 9011 9109, Associate Editor: Ari Ashe Southeast Ports, Intermodal Rail 202 548 7895, Data Analyst: Marcin Lejk +44 587416270, Shipper Engagement Manager: Dustin Braden 646 679 3450, Senior Content Editor: Alessandra Gregory Barrett, 860 248 5238 Senior Designer: Sue Abt, 862 371 3534, Designer: Bryan Boyd, 908 910 7849, Publisher: Tony Stein, 770 295 8809, Sales: Cindy Cronin, Senior Strategic Account Manager Southeast, Gulf, Canada sales, 954 260 6061 Jean Gibbons, Senior Sales Executive West Coast, Midwest sales, 706 469 7160 John Knowles, Senior Sales Executive Europe sales, +44 7779974677 Allyson Marek, Senior Sales Executive Northeast sales, 862 754 8012 Alex Remstein, Associate Sales Specialist Reprints/Classifieds/Copyrights, 646 679 3418 Mehdi Smaili, Senior Sales Executive, Asia sales, +44 7581406491 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 800 952 3839 Vice President, Maritime & Trade, IHS Markit, Peter Tirschwell Executive Director, Media & Events, Maritime & Trade, IHS Markit, Amy Middlebrook Manager, Production, Carmen Verenna Product Manager, JOC, Jesse Case ©2019 The Journal of Commerce — All Rights Reserved For more information, visit our website, Marten Transport

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