The Friday Report: January 17th, 2020

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

U.S. and China Sign “Phase One” Trade Deal

Signed Wednesday, January 15th, the new deal mandates that China will purchase an additional $200 billion in U.S. goods and services over the next two years, based on 2017 figures before the trade war began.  In 2017, China imported in excess of $185 billion in total U.S. services and goods.

As part of the trade deal, the United States agreed to reduce tariffs on $120 billion in Chinese products from 15% to 7.5%.  Industry experts expect that China will need to reduce imports from other countries to meet the requirements in the trade deal.  The two main parts of the trade deal indicate a dramatic surge in American exports to China.  China has promised to purchase pork, cotton, wheat and soybeans, goods hit hard by the trade war in 2018.

Additional protection is provided to American companies in terms of intellectual property and trade secrets in the new agreement.  Requirements for banks which want to operate in China were reduced and anti-counterfeiting penalties imposed.

Although the Chinese government pledged to exceed its previous promises, there is no requirement for it to change laws or regulations or make alterations to state subsidies which could trigger major changes in how the Chinese economy functions.  The agreement helps China to meet one of its key objectives:  to diversify its economy and reform its financial system.

Brexit Breakout Closer

The U.K. Brexit bill passed the House of Commons earlier this week with 330 members voting for and 231 against its passage.  The Brexit bill now advances to the House of Lords where its passage would mean that the United Kingdom would formally withdraw from the European Union by the January 31st deadline.

At the current time, the and will remain bound to EU trade laws until December 31, 2020.  Prime Minister Boris Johnson has voiced optimism that the EU and U.K. will be able to generate a trade agreement that can be ratified by the deadline.  Negotiations are expected to begin in late February or March and an extension can be requested in June if a trade agreement cannot be ratified by the end of 2020.

Walmart Ordered by Court to Pay Drivers for Layover and Break Time

This week, a federal appeals court upheld a 2016 legal decision forcing Walmart to pay back $54.6 million to its company truck drivers.  In a class action suit, the Walmart truck drivers were seeking back pay for the time they spent in layover, on break or in inspections.  Layovers are mandatory and are required by the Department of Transportation.

The three-judge federal appeals court panel decided that “time drivers spent on layovers was compensable if Walmart exercised control over the drivers during those breaks” and found that the district court had correctly made its original finding.  Proof of the case was found in the Walmart driver manual which confirmed that drivers remained under Walmart’s control during the 10-hour layover at the end of a shift.

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