US imports reach new high as retailers rush to beat tariffs
Imports at US retail container ports have hit a record high as retailers continue to rush merchandise into the country to beat the timeline for increased tariffs coming into effect.
According to the monthly Global Port Tracker from the National Retail Federation (NRF), imports reached two million containers in a single month for October as retailers continued to bring merchandise into the country ahead of a now-postponed increase in tariffs on goods from China. The result is up 9% on September and 13.6% up year-on-year.
Last week the US and China declared a 90-day ceasefire in the US-China trade war following a meeting between President Trump and President Xi on the sidelines of the G20 in Argentina. The move allows talks to take place between the two sides. Had a deal not been struck, tariffs on US$200bn worth of Chinese goods would have risen from 10% to 25% at the start of 2019.
That said, official action to delay the tariff increase has yet to be announced
"President Trump has declared a temporary truce in the trade war, but these imports came in before that announcement was made," says Jonathan Gold, NRF vice president for supply chain and customs policy.
"We hope that the temporary stand-down becomes permanent, but in the meantime, there has been a rush to bring merchandise in before existing tariffs go up or new ones can be imposed. China's abuses of trade policy need to be addressed, but tariffs that drive up prices for American families and costs for US businesses are not the answer."
The October number was the highest for a single month since Global Port Tracker began counting cargo in 2000, topping the previous record of 1.9m twenty-foot equivalent (TEU) units set in July, which in turn had beat a record of 1.83m TEU set in August 2017. A TEU is one 20-foot-long cargo container or its equivalent.
November was estimated at 2.01m TEU, a 14% year-over-year increase that would have been a new record if not for the October number.
December – normally a slow month with holiday merchandise already on the shelves – is forecast at 1.83m TEU, up 6.1% year-over year. Those numbers would bring 2018 to a total of 21.8m TEU, an increase of 6.5% over last year's record.
However, year-over-year growth rates and total volume had been expected to slow considerably in January, when 10% tariffs on $200bn worth of Chinese products that took effect in September had been scheduled to increase to 25%.
January 2019 is forecast at 1.72m TEU, down 2.1% from January 2018; February at 1.67m TEU, down 1% year-over-year; March at 1.57m TEU, up 1.7% and April at 1.7m TEU, up 3.7%.
"We see a significant slowdown in import growth in 2019 as the market adjusts to higher prices due to the Trump tariffs and the impact on consumer and industry confidence going forward," says Hackett Associates founder Ben Hackett. "We project that imports at our monitored ports will have grown significantly in 2018 but that there will be no import growth in the first half of 2019 compared with the same period in 2018."