US-China Trade War Led to Record Growth in Trade
CALIFORNIA – January 9, 2019
Though the US and China are busy waging a trade war, if you look at the activity that occurs in US trading ports, it seems that there is no war in sight.
The challenge that the President Trump threw at globalization has had quite the opposite impact on world trade flows: participants in retail and other industries seeking to make good deals before the new tariffs will come into force. This trend is especially noticeable in the volume of US imports from China.
Warehouses throughout the US are packed to the rafters with Chinese goods – ranging from air conditioners and microwaves to footwear and furniture. Representatives of the port of Los Angeles administration say that due to such a high load, there may be problems with logistics.
The value of China clothing exports to the United States jumped 7.9% to $494.83 billion for the January to October period, according to an analysis of customs data from logistics technology firm Descartes Systems Group Inc.
Retailers have “brought in much of their spring merchandise early to protect consumers against higher prices that will eventually come with tariffs,” said Jonathan Gold, NRF’s vice-president for supply chain and customs policy.
Meanwhile, as expected, the sharp growth in 2018 will be replaced by a negative trend in 2019. US ports expect a decline in activity next year.
Imports at major container ports in the US are levelling off after retailers’ months-long rush to bring in Chinese merchandise before higher tariffs hit, according to a retail trade report.
US ports covered by the National Retail Federation (NRF) and Hackett Associates’ Global Port Tracker handled 1.81 million twenty-foot equivalent units (teu) in November, according to the latest data issued on Tuesday.
That was up 2.5% year-over-year, but down 11.4% from the record of 2.04 million set in October.
The report landed as the United States and China held talks aimed at ending the trade war that is roiling global financial markets.
The Global Port Tracker forecasts that 2018 imports will have risen 5.3% to a record 21.6 million teu before cooling in the early months of the new year, when imports typically soften due to the post-holiday drop in demand and Lunar New Year factory shutdowns in Asia.
The deceleration is expected to continue into 2019 as the stand-off between the world’s two largest economies ripples through the global economy.
FedEx Corp slashed its 2019 fiscal forecasts citing a slowdowns in China and Europe, while grains trader Cargill Inc said the trade tensions hit its bottom line.
The United States and China agreed to a 90-day truce in December that is set to expire on March 1, when tariffs on Chinese goods imported to the US could be increased from 10% to 25%.
“We are projecting … an overall weakness in imports for the first half of the year,” Hackett said.