Retailers stock up inventory to get ahead of higher tariffs.
US box imports are expected to continue to grow this summer as retailers stock up inventory to get ahead of higher tariffs, according to the monthly Global Port Tracker report issued by the National Retail Federation (NRF) and Hackett Associates.
“With a major tariff increase already announced and the possibility that tariffs could be imposed on nearly all goods and inputs from China, retailers are continuing to stock up while they can to protect their customers as much as possible against the price increases that will follow,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.
“Tariffs are taxes paid by American businesses and consumers, not foreign governments. Retailers will continue to do everything they possibly can to mitigate the impact of tariffs on consumers, but if we see further escalation in the trade war, it will be much more difficult to avoid higher price tags on a wide range of products. It’s time to stop using American families as pawns in negotiations for better trade deals,” he added.
The Trump administration increased 10% tariffs on $200 billion worth of Chinese goods to 25% in May, with the increase applying to imports that arrive in the United States after June 15.
The administration has also proposed to implement new 25% tariffs on $300 billion worth of Chinese goods and recently removed India and Turkey from the Generalized System of Preferences program, which allows certain items to be imported duty-free.
“One must wonder who the Trump administration is trying to punish with its growing enthusiasm for tariffs,” Hackett Associates’ founder, Ben Hackett, commented. “The tariffs are offsetting much of the savings from tax cuts, and if this continues there could be tough months ahead.”
US ports covered by Global Port Tracker handled 1.75 million Twenty-Foot Equivalent Units (TEU) in April, the latest month for which after-the-fact numbers are available.
That was up 8.4% from March and up 6.9% year-over-year. May was estimated at 1.88 million TEU, up 3% year-over-year. June is forecast at 1.86 million TEU, up 0.3 %; July at 1.93 million TEU, up 1.1%; August at 1.95 million TEU, up 3.3%; September at 1.89 million, up 0.9%, and October at 1.95 million TEU, down 4.4%.
The August and October numbers would be the highest monthly totals since the 2 million TEU record set last October as retailers rushed to bring merchandise into the country ahead of expected tariff increases.
Imports during 2018 set a record of 21.8 million TEU, an increase of 6.2% over 2017’s previous record of 20.5 million TEU. The first half of 2019 is expected to total 10.6 million TEU, up 3% over the first half of 2018.
Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the US ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast, and Houston on the Gulf Coast
Separately, US President Donald Trump says he has suspended plans to impose tariffs on Mexico, tweeting that the country “has agreed to take strong measures” to stem the flow of Central American migrants into the United States.
“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico,” Trump tweeted last Friday, saying the “Tariffs scheduled to be implemented by the US on Monday (10 June), against Mexico, are hereby indefinitely suspended.”
There were fears that the tariffs could hurt US businesses and consumers.
Under Mr Trump’s proposal, duties would have risen by 5% every month on goods including cars, beer, tequila, fruit and vegetables until they hit 25% in October.
Source: Lloyd´s
