With retail sales rising and President Trump planning to both increase and broaden tariffs on goods from China, imports at major US retail container ports are expected to see unusually high levels the remainder of this spring and throughout the summer, new figures show.
The US added an additional 10% tariff on US$200bn worth of Chinese goods last September, with an increase to 25% scheduled for 1 March. The rush to bring merchandise into the country that was seen through much of last year slowed down after Trump postponed the hike and then put it on hold indefinitely as trade talks with China showed signs of progress.
But the rise is now set to come into force today (10 May) after a notice was published to the Federal Register by the Office of the United States Trade Representative (USTR), four days after President Trump took to Twitter to reveal his plans to raise the tariffs because talks between the US and China to try to resolve the issue have been moving too slowly.
The President says he also plans to impose new 25% tariffs on most remaining Chinese goods at an unspecified date.
Jonathan Gold, NRF vice president for supply chain and customs policy, said while much of the “unusually high levels” of imports at major US retail container ports is driven by consumer demand, retailers are likely to resume stocking up merchandise before new tariffs can take effect.
“Tariff increases and new tariffs will mean higher costs for US businesses, higher prices for American consumers and lost jobs for many American workers,” he added. “We encourage the Administration to stay focused on a trade agreement, and we hope the negotiations will get back on track. It would be unfortunate to undermine the progress that has been made with more tit-for-tat tariffs that only punish Americans.”
According to the monthly Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates, major US retail container ports handled 1.61m Twenty-Foot Equivalent Units (TEU) in March, the latest month for which after-the-fact numbers are available. That was down 0.6% from February but up 4.4% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.
April was estimated at 1.76m TEU, up 7.7% year-over-year. May is forecast at 1.9m TEU, up 4.2%; June at 1.92m TEU, up 3.7%; and July at 1.96m TEU, up 3%.
Meanwhile, looking further ahead, August is forecast at 1.98m TEU, up 4.6%, and September at 1.91m, up 2%. Imports have never before hit the 1.9m TEU mark earlier than July. And the August number would be the highest monthly total since the record 2m TEU record set last October.
Imports during 2018 set a new record of 21.8m TEU, an increase of 6.2% over 2017’s previous record of 20.5m TEU. The first half of 2019 is expected to total 10.7m TEU, up 3.9% over the first half of 2018.
Hackett Associates founder Ben Hackett added: “Consumption is facing the potential of increased tariffs on Chinese imports if President Trump’s tweets are anything to go by. One can only hope that this is a simple negotiating tactic that will run out of steam.”