Ahead of more tariffs taking effect in December, apparel cargo imports at major U.S. container ports are expected to hit peak levels again in November, according to the Global Port Tracker report released Thursday by the National Retail Federation (NRF) and Hackett Associates.
That will come after several inclines and declines that generally follow the scattered pattern of punitive tariffs imposed and threatened by the White House on imports from China.
“This is the last chance to bring merchandise into the country before virtually everything the United States imports from China comes under tariffs,” Jonathan Gold, vice president for supply chain and customs policy at NRF, said. “Retailers are doing all they can to mitigate the impact of tariffs on their customers. The effect on prices will vary by retailer and product during the holiday season, but ultimately these taxes on America businesses and consumers will result in higher prices.”
Global Port Tracker noted that 15 percent tariffs on a wide range of consumer goods from China took effect at the beginning of September and are scheduled to be expanded to additional goods on Dec. 15, covering about $300 billion in imports. In addition, 25 percent tariffs on $250 billion worth of imports already imposed over the past year are scheduled to increase to 30 percent on Oct. 15.
Hackett Associates Founder Ben Hackett said even though U.S. trade policies and enforcement mechanisms “have directly caused a global slowdown in economic growth,” imports are continuing to grow as retailers bring merchandise into the country to beat the tariffs.
“The strength of retail consumption will push any meaningful slowdown in imports into next year, when the full impact of the tariff wars will be translated into a consumption tax felt by consumers,” Hackett said.
U.S. ports covered by Global Port Tracker handled 1.97 million 20-foot-equivalent units in August, up 0.2 percent from July and 3.9 percent higher year-over-year. It was also the second-highest number of containers imported during any month of the year after October 2018’s record of 2 million. A TEU is one 20-foot-long cargo container or its equivalent.
As the new tariffs took effect in September, cargo imports ticked up 1.6 percent to an estimated 1.9 million TEU. But October’s shipments are forecast to fall 5.1 percent from last year’s record volume for the month to 1.93 million TEU.
An expected push to beat the December tariffs has Global Port Tracker predicting November cargo reaching U.S. ports to rise 8.9 percent year-over-year to 1.97 million TEU, which would tie August as the second-highest number of containers in a single month. But imports are seen falling to 1.78 million TEU in December, down 9.3 percent year-over-year.
The report noted that the expected drop from November will come as December’s tariffs take effect, but the month historically sees a falloff in imports because most holiday merchandise has already arrived by that point.
The first half of 2019 totaled 10.5 million TEU, up 2.1 percent over the first half of 2018, and 2019 is expected to see a new record of 22 million TEU. That would be up 1.2 percent from last year’s previous record of 21.8 million TEU.
Looking ahead in 2020, January cargo imports are forecast to decline 1.9 percent year-to-year to 1.86 million TEU. February–traditionally the slowest month of the year due to New Year factory shutdowns in Asia–is forecast at 1.59 million TEU, down 1.8 percent from a year ago.
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.