Imports at major US retail container ports will remain at high levels this summer but are expected to grow only modestly compared with last year’s rush to bring merchandise into the country ahead of scheduled tariff increases.
President Trump announced after meeting with China’s President Xi Jinping last month that he would hold off on additional tariffs on an extra US$300bn in Chinese goods while negotiations between the two countries resumed. Coupled with tariffs imposed over the past year, the new round would tax almost all goods imported into the United States from China.
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“Retailers still want to protect their customers against potential price increases that would come with any additional tariffs, but with the latest proposed tariffs on hold for now and warehouses bulging, there’s only so much they can do,” says NRF vice president for supply chain and customs policy Jonathan Gold.
“We will still see some near-record numbers this summer, but right now no one knows whether there will be additional tariffs or not. We hope the restarted negotiations with China will result in significant reforms rather than more tariffs that tax American companies and consumers.”
US ports covered by Global Port Tracker handled 1.85m Twenty-Foot Equivalent Units (TEU) in May, the latest month for which after-the-fact numbers are available. That was up 6% from April and up 1.4% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.
June was estimated at 1.87m TEU, up only 0.8% year-over-year. July is forecast at 1.93m TEU, up 1.3%, while August is at 1.96m TEU, up 3.4%.
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By GlobalDataLooking further ahead, September is forecast at 1.89m, up 1.1%; October at 1.94m TEU, down 4.5%; and November at 1.88m TEU, up 4.3%.
The August number would equal the total seen last December just ahead of a scheduled 1 January tariff increase that was ultimately delayed until this spring, and would be second only to the 2m TEU record set last October. But the small year-over-year increases expected in the next few months compare with double-digit growth in multiple months last year as retailers rushed to import Chinese merchandise ahead of expected tariff increases.
Imports during 2018 set a record of 21.8m TEU, an increase of 6.2% over 2017’s previous record of 20.5m TEU. The first half of 2019 totalled an estimated 10.6m TEU, up 2.8% over the first half of 2018.
“Imports of consumer goods continue to grow as importers purchase items in expectation of further increases in tariffs, the cost of which will be borne by the American consumer,” Hackett Associates founder Ben Hackett adds. “Trade has become the sharp end of foreign policy, and we continue to believe that this will ultimately damage both sides of the conflict in a lose-lose situation.”
