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Trade confidence and shipping markets are volatile after Trump threatens to increase import taxes on Chinese imports from this Friday.
The threat in the last few days of new US tariffs on goods imported from China has raised new concerns among US importeres and their logistics representatives and caused many shipping and other stock market values to fall.
Despite positive indications last week of a possible imminent trade deal between the US and China, confidence has faltered after US President Trump threatened to increase tariffs on Chinese imports from this Friday, reportedly because the US believed the Chinese side was backtracking on some of the agreements made during the talks.
In a note to customers, the US Trade Services arm of global logistics group Geodis said: “While the US and China continue to dialogue for a trade deal, progress is insufficient and slow in the eyes of the administration. In response, President Trump unofficially announced plans to raise the trade remedy tariff currently set at 10% to 25% effective Friday.
“It appears that this will apply to all goods on the so-called List III. The President also suggested that extension of the trade remedy tariffs to all imports from China is a possibility.
“An official notice will likely be published soon and we will share that information. At this time, it is prudent to plan on the tariff increase for goods on List III effective for goods entered on or after May 10. It is important that you work with your account representative and carrier to confirm the arrival date for your merchandise, so wherever possible, the additional 15% can be avoided.”
US retail shipper group the National Retail Federation (NRF) expressed concerns about Trump’s threat to raise tariffs on $200 billion of Chinese foods from 10% to 25%. Senior vice president for government relations David French commented: “A sudden tariff increase with less than a week’s notice would severely disrupt US businesses, especially small companies that have limited resources to mitigate the impact. We want to see meaningful changes in China’s trade practices, but it makes no sense to punish Americans as a negotiating tactic.
“If the administration wants to put more pressure on China, it should form a multinational coalition with our allies who share our concerns. We urge the administration to reconsider this tax hike and stay at the bargaining table until a deal is reached.”
Neil MacKinnon, global macro strategist at VTB Capital, said investors fear the trade war negotiations could collapse, noting: “President Trump’s threat to increase tariffs on Chinese imports is denting market sentiment and creating unnecessary volatility especially in equity markets,” the Guardian reported. “Investors had been hopeful of a constructive outcome to the US-China trade talks, but a worst-case scenario of a collapse in the talks could totally undermine hopes of a recovery in world trade and global economic growth.”
The WSJ reported that the latest round of trade talks this week between the US and China will begin under a cloud — if they take place at all — noting that China has considered cancelling the new negotiating round discussions scheduled to resume on Thursday.
However, the Guardian today reported that China’s chief trade negotiator will travel to Washington this week, according to China’s commerce ministry, tempering fears that talks to resolve a protracted trade war between the US and Beijing had been scuppered.
It said Liu He, a vice-premier, will hold negotiations in Washington on Thursday and Friday, according to the Chinese ministry, which did not elaborate on the agenda.
Source: Lloyd’s
