Chinese imports to US ports up amid tariff threat
LOS ANGELES Chinese imports to US ports rose more than expected last month, suggesting some retailers moved up orders to insulate themselves from an intensifying trade war that threatens to send up costs on consumer products.
Retailers such as Walmart and Amazon face uncertainty due to US President Donald Trump's threat to impose more tariffs on Chinese goods, and the jump in imports from the country was likely because of "pre-emptive buying in anticipation of the tariffs", said Mr Ben Hackett, founder of international maritime consultancy Hackett Associates.
"This is a bump that isn't quite normal," he said.
The US container port peak season is traditionally driven by orders for Chinese-made clothing, electronics and toys for the back-to-school season running from June to September, and then the winter holiday season.
The volume of loaded shipping containers from China to all US ports was up 6.3 per cent in June from a year earlier after falling 6.9 per cent in May and 3.9 per cent in April, said Mr Gene Seroka, executive director of the Port of Los Angeles, the top hub for ocean trade with China. His data was sourced from IHS Markit's Piers.
China said on Friday last week that exports unexpectedly accelerated last month. The Commerce Ministry confirmed Chinese exporters were front-loading shipments to the US to get ahead of expected tariffs.
Mr Trump has vowed to reset the US' global trade agreements, which includes a threat to impose tariffs on more than US$500 billion (S$682 billion) worth of Chinese goods.
Retailers who place orders for general merchandise up to a year in advance can offset additional costs by raising prices or finding new suppliers.
On July 6, the US imposed 25 per cent tariffs on US$34 billion of Chinese goods, including flash drives, remote controls and thermostats, from a list of US$50 billion in products first proposed in April.
China fired back with tariffs on an equal value of US goods, including soya beans, whisky, cotton and automobiles.
Those are unlikely to immediately affect retailers.
The Trump administration raised the stakes in the trade battle on Tuesday last week with a plan to add 10 per cent tariffs on US$200 billion worth of Chinese goods, including furniture, handbags, pet food, textiles and auto parts.
That new round could hit during the autumn lead-up to the crucial Christmas and winter holidays. Many products purchased for that season will have arrived at ports well ahead of the imposition of the new levies.
There are some indications that other industries have employed forward buying to avoid tariffs.
Automakers hailed more ships in May in an apparent scramble to bring vehicles to the US to pre-empt potential tariff increases. The ports of Baltimore, Jacksonville and Brunswick - the leading US ports for importing automobiles - unloaded a combined 23,000 more cars than they did a year earlier.
Mr Michael Binetti, an analyst at Credit Suisse, said the latest round of proposed tariffs, if implemented, could catch retailers such as Restoration Hardware, Williams-Sonoma, Michael Kors and Tapestry in the crosshairs.
In the long run, said Mr Binetti: "I don't think the US ports will be any kind of issue.
"The boats will be coming in from Vietnam instead of from China in the same volumes."
- REUTERS
Get The New Paper on your phone with the free TNP app. Download from the Apple App Store or Google Play Store now
