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Retail Cargo Imports to Set Record in July Even as Tariffs Take Effect

Driven by increased consumer demand and strong retail sales, imports at the nation’s major retail container ports are expected to set a new record this month even as new tariffs on goods from China went into effect, according to the monthly Global Port Tracker report released Monday by the National Retail Federation and Hackett Associates.

“Retailers cannot easily or quickly change their global supply chains, so imports from China and elsewhere are expected to continue to grow for the foreseeable future,” Jonathan Gold, vice president for supply chain and customs policy at NRF, said. “As tariffs begin to hit imported consumer goods or the parts and equipment needed to produce U.S. goods, these hidden taxes will mean higher prices for Americans rather than significant changes to international trade.”

However, on Friday, the Commerce Department’s Office of Textiles & Apparel reported that U.S. textile and apparel imports from China fell 2.2% to $2.92 billion worth of goods in May, compared to a year earlier. Apparel imports were hit the hardest, falling 2.23% to 805 million square meter equivalents in the month compared to May 2017, while textile imports from China were down 0.2% in value to $1.12 billion.

Commenting onto the imposition of U.S. tariffs on $34 billion in Chinese products that took effect on Friday, Hackett Associates founder Ben Hackett said, “July 6 was the beginning of the United States’ trade war. There will be no winners, only losers–particularly consumers–as costs increase.”

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As the wave of summer merchandise began to arrive, ports covered by Global Port Tracker handled 1.82 million Twenty-Foot Equivalent Units in May, an 11.6% increase from April and up 4.3% from a year earlier. A TEU is one 20-foot-long cargo container or its equivalent.

June cargo shipments are estimated at reach 1.83 million TEU, up 6.8% year-over-year, while July imports are seen increasing 3.8% to 1.87 million TEU. Heading into back-to-school and earlier fall goods arriving, August shipments are predicted to rise 4.2% to 1.91 million TEU, with September imports growing 2.1% to 1.82 million TEU, October’s increasing 5.3% to 1.89 million TEU and November’s climbing 2.6% to 1.81 million TEU.

The June number tied the record of 1.83 million TEU imported during a single month set in August 2017 and the forecast for July would break that record, while August should set yet another record, the report noted. While cargo numbers do not correlate directly with sales, the record imports mirror strong results seen by retailers this spring and expectations of continued growth through the remainder of the year, it added.

Retail sales calculated by NRF, excluding automobiles, restaurants and gasoline stations, were up 5.6% year-over-year in May and 4.6% on a three-month moving average. NRF is forecasting that total 2018 sales will be up between 3.8% and 4.4% over 2017.

Retail cargo imports in the first half should reach 10.3 million TEU, an increase of 4.9% over the first half of 2017. The total for 2017 was 20.5 million TEU, 7.6% more than 2016’s previous record of 19.1 million TEU.

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.