Retail imports remain high despite trade war

14 August 2019 2 min. read

Imports at major retail container ports are projected to remain at near-record levels this year despite a new round of tariffs on Chinese goods, according to the monthly Global Port Tracker report conducted by consultancy Hackett Associates for the National Retail Federation.

President Trump announced a new 10% tariff on an additional $300 billion in Chinese goods that will take effect September 1st. In combination with the 25% tariffs imposed on $250 billion in imports over the past year, the new round will mean tariffs on nearly all US imports from China. American importers paid $6 billion in tariffs in June, up 74% year-over-year, according to data from the Tariffs Hurt the Heartland Coalition.

Retail imports at US ports, nonetheless, remained high, according to the NRF report. US ports covered by the Global Port Tracker handled 1.8 million twenty-foot equivalent units (TFEU) in June, down 2% from May and down 3% year-over-year. July is slated to see 1.86 million TEU, down 2.6% year-over-year, while December is projected to see 1.81 million TEU for a decrease of 7.9%.

Retail imports remain high despite trade war

The year-over-year declines are largely because of high volumes in 2018 as retailers scurried to make imports before the scheduled tariffs took effect, according to the report. Overall, the report projects 2019 TEU imports to be only 0.4% less than 2018’s record 21.8 million TEU.

“Even with virtually everything American imports from China soon to be subject to tariffs, it isn’t quick or easy for retailers to change their supply chains,” Jonathan Gold, NRF VP for supply chain and customs policy, said. “That means American families are ultimately going to pay more for goods they can’t do without. And even if sourcing eventually shifts away from China, it will simply come from other countries.”

As a result of the Trump administration’s trade war with China, many manufacturers have been eyeing relocation from China to other countries. Approximately 41% of American companies are considering shifting manufacturing from China, according to the American Chamber of Commerce in China. Apple is considering moving iPhone production to India, and Dell and HP are mulling the movement of their PC production to Southeast Asia, according to the Nikkei Asian Review.

“The uncertainties of the administration’s tariff policies continue to vex the markets,” Hackett Associates founder Ben Hackett said. “Our overall outlook is more pessimistic than last month, underlining that trade wars are not harbingers of good things to come.”

The Hackett-conducted Global Port Tracker report covers more than ten major US ports on the West, East, and Gulf Coasts. Virginia-based Hackett Associates delivers consulting, research, and advisory services to the maritime industry, government agencies, and international institutions.