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Cargo Imports Remain Strong Ahead of Potential Chinese Tariff Hike

Cargo imports at major U.S. retail container ports have slowed down from a pre-holiday peak, but remain at high levels as retailers strategically bring in merchandise before a threatened 25 percent tariff increase on Chinese goods imports set for January, according to the monthly Global Port Tracker report released Friday by the National Retail Federation and Hackett Associates.

“Imports have usually dropped off significantly by this time of year, but we’re still seeing numbers that could have set records in the past,” said Jonathan Gold, vice president of supply chain and customs policy at NRF. “Part of this is driven by consumer demand in the strong economy, but retailers also know that tariffs on the latest round of goods are set to more than double in just a few weeks. If there are shipments that can be moved up, it makes sense to do that before the price goes up.”

The latest tranche of tariffs, if imposed, is expected to include apparel that has been spared in previous tariff rounds against China. President Trump is scheduled to meet Chinese President Xi Jingping on Dec. 1, when a resolution to the trade conflict could be reached, although most trade and political experts consider that unlikely.

“President Trump’s trade war with China and the threat of even higher tariffs in 2019 have created a mini-boom in imports and businesses have rushed to bring goods into the country ahead of the tariffs,” Hackett Associates founder Ben Hackett said. “We are clearly in a politically motivated trade environment.”

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U.S. ports covered by Global Port Tracker handled 1.87 million 20-Foot Equivalent Units in September, down 1.3 percent from August but up 4.6 percent year over year. A TEU is one 20-foot-long cargo container or its equivalent.

October imports were estimated at 1.89 million TEU, a 5.5 percent year over year gain. November shipments are forecast to rise 2.8 percent to 1.81 million TEU and December cargo imports are seen increasing 3.8 percent to 1.79 million TEU. Heading into the new year, January shipments are forecast to be up 2.8 percent to 1.81 million TEU, while February’s shipments are projected to rise 0.4 percent to 1.7 million TEU and March cargo imports are expected to increase 3.3 percent to 1.59 million TEU.

Global Port Tracker noted that imports set a monthly record of 1.9 million TEU in July ahead of 10 percent tariffs on $200 billion in goods from China that took effect in September. While not overall records, October, November and December’s numbers are each the highest on record for those months. Before this year, the highest monthly number on record was 1.83 million TEU set in August 2017.

The first half of 2018 totaled 10.3 million TEU, an increase of 5.1 percent over the first half of 2017. The total for 2018 is expected to reach 21.4 million TEU, an increase of 4.4 percent over last year’s record 20.5 million TEU.

The report said while cargo numbers do not correlate directly with sales, the imports mirror this year’s strong retail spending. The NRF forecast last week that 2018 holiday season core retail sales will increase between 4.3 percent and 4.8 percent over last year. Retail sales for all of 2018 are forecast to be up at least 4.5 percent over 2017.

Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach and  Oakland, Calif., and Seattle and Tacoma, Wash., on the West Coast; New York/New Jersey; Port of Virginia; Charleston, S.C.; Savannah, Ga., and Port Everglades, Miami and Jacksonville, Fla., on the East Coast, and Houston on the Gulf Coast.