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EU Weighs Tariff Response; Customs-Fraud Queries Climb; a Rare New U.S. Copper Mine

By Mark R. Long

 

Note: Total trade is imports plus exports. Source: U.S. Census Bureau

The European Union is readying a fresh list of U.S. products to hit with retaliatory tariffs if a trade deal isn’t reached by President Trump’s Aug. 1 deadline.

The WSJ’s Kim Mackrael writes that the new EU list—ranging from aircraft to alcoholic beverages to medical devices—covers American imports valued at roughly $84 billion last year. EU officials circulated the list to the 27 member states after Trump threatened 30% blanket tariffs over the weekend. That revived a debate over whether and how forcefully the bloc should fight back if the two sides can’t reach a deal. In April, the EU froze an initial package of retaliatory tariffs against the U.S. after Trump said he would limit blanket duties on most countries to 10% for 90 days.

The new list covers about $77 billion worth of industrial imports and about $7 billion worth of agricultural and food products, such as fruits and vegetables, wine, beer and spirits. Officials with America’s biggest trading partner are debating what would trigger those tariffs, and whether to prepare additional measures that could put duties or other restrictions on American service, not just goods.  

  • Trump threatened to impose “very severe tariffs” on Russia if there is no peace deal with Ukraine in 50 days. (WSJ)
  • U.S. imports from Russia during the first five months of this year totaled just $2.1 billion, but these included a critical nuclear-reactor fuel and metal used in catalytic converters. (WSJ)
  • Frozen concentrate orange juice futures have risen about 25% since Trump said he would impose 50% tariffs on imports from Brazil starting next month. (WSJ)
  • The U.S. said it was placing a 17% duty on most fresh Mexican tomatoes after talks ended without a deal. (Associated Press)

PHOTO: KEVIN LAMARQUE/REUTERS

WSJ VIDEO: Trump vowed that tariffs will reach "extremely strong" levels and claimed that the U.S. made $25 billion last month, which he partially credited to the duties.

 
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Quotable

“Let’s be honest, an idea of a 30% tariff rate is effectively prohibitive to mutual trade.”

— Maros Sefcovic, the European Union’s top trade negotiator
 

Trade Fraud

Importers can illegally pay lower tariffs by lying about a product’s value or country of origin. PHOTO: ANGEL GARCIA/BLOOMBERG

As tariffs surge higher, so, too, do the incentives not to pay them. Clients are inundating trade lawyers with questions about the line between lawful loopholes and fraud, the Journal’s Corinne Ramey writes. The Justice Department is shifting its white-collar priorities to pursue tariff and customs-related cases more aggressively. And lawyers say they have seen a sharp increase in calls from whistleblowers looking to file their own cases about alleged wrongdoing.

There are several ways importers typically seek to evade tariffs illegally. Companies can misclassify a product, for instance, by claiming that nightstands are living-room furniture. An importer could lie about a product’s value or what country it is coming from to pay a smaller tariff. Yet companies can use similar methods to avoid tariffs without running afoul of the law, muddying the waters for importers.

 
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Critical Materials

Ivanhoe Electric drilled 329 holes to assess copper reserves at its planned mine south of Phoenix. PHOTO: IVANHOE ELECTRIC 

U.S. copper prices surged to records last week ahead of the 50% tariff Trump promised to impose on imports Aug. 1. Even without tariffs, prices are expected to climb on booming demand for data centers, renewable-energy installations and electric cars, the Journal’s Ryan Dezember writes.

There are only two operating smelters in the U.S. Mining output also has declined and proposed mines have been mired in delays. That makes Ivanhoe Electric’s Santa Cruz site in Arizona all the more welcome. It is on track to potentially be the first big new U.S. copper mine in more than a decade. Construction is due to start early next year and cathode sales are expected by the end of 2028. The mine is on an unusually fast track as a result of being on private property along a booming industrial corridor between Phoenix and Tucson.

 

Number of the Day

95.6

The Truckstop.com Market Demand Index for the U.S. truckload spot market for the week ending July 11, up from 70.9 the week before to its highest level in eight weeks

 

In Other News

China’s exports rose 5.8% in June from a year earlier, stronger than many economists had predicted and an improvement from the 4.8% year-over-year increase in May. (WSJ)

Malaysia has tightened rules around the movement of artificial-intelligence chips from the U.S. to close regulatory gaps and prevent potential illegal trade. (WSJ)

A new survey found 37% of consumers in the U.S. and Canada had decided against buying something because of concerns about plastics and unsustainable packaging. (WSJ)

Food banks straining under rising demand are worried that federal funding cuts will leave many more Americans hungry. (WSJ)

J.B. Hunt Transport Services is assessing peak-season surcharges of up to $1,500 per container in Southern California. (Journal of Commerce)

Port of Los Angeles Executive Director Gene Seroka said the port handled about 892,000 containers, as measured in 20-foot-equivalent units, in June, up 32% from May. (Bloomberg)

Honda Motor and Nissan Motor are in talks to standardize software that controls their vehicles. (Nikkei Asia)

The search for crew members missing from the bulk carrier Eternity C, which was sunk by Yemen’s Houthi militants, has been called off. Nine seafarers are confirmed or presumed dead. (Lloyd’s List)

Norfolk Southern and the Justice Department reached a settlement in principle over a lawsuit alleging the railroad regularly failed to give an Amtrak passenger train preference over freight trains, as required. (Trains.com)

Daimler Truck executives said the company was reducing battery-electric and hydrogen fuel cell undertakings while increasing diesel powertrain investment. (Transport Topics)

The U.S. Coast Guard officially renamed its nine operational districts, abandoning a number system dating back to World War II in favor of geographic names. (Waterways Journal)

 

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.

 
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