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US retail imports surge again ahead of new tariffs

Sep 10, 2019 (MarketLine via COMTEX) --

Imports at major US retail container ports reached unusually high numbers just before new tariffs on goods from China took effect 1 September - and are expected to surge again before another round of tariffs takes effect in December.

New 15% tariffs on a wide range of consumer goods from China came into place at the beginning of this month and are due to be expanded to additional goods on 15 December – covering a total of about US$300bn in imports. In addition, 25% tariffs on $250bn worth of imports already imposed over the past year will increase to 30% on 1 October.

"Retailers are still trying to minimise the impact of the trade war on consumers by bringing in as much merchandise as they can before each new round of tariffs takes effect and drives up prices," explains Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF). "That's the same pattern we've seen over the past year, but we're very quickly going to be at the point where virtually all consumer goods will be subject to these taxes on American families. The upcoming October talks with China are an opportunity to put a stop to this escalation, repeal the tariffs that have been imposed and focus on growing the economy."

The latest Global Port Tracker report released by the NRF and Hackett Associates shows US ports handled 1.96m Twenty-Foot Equivalent Units (TEU) in July, the latest month for which after-the-fact numbers are available. That was up 9.1% from June and up 2.9% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.

Numbers were high again in August, which was estimated at 1.93m TEU, up 1.8% year-over-year. September is forecast at 1.85m, down 0.7% from last year, while October is at 1.92m TEU, down 5.5%. Looking further ahead, November is forecast at 1.97m TEU, up 8.8%, and December at 1.77m TEU, down 9.8%.

Likely driven by the new tariffs scheduled for December, November's 1.97m TEU would be the highest monthly total since the record 2bn TEU seen in October 2018.

The first half of 2019 totalled 10.5m TEU, up 2.1% over the first half of 2018, and 2019 is expected to see a new record of 21.9m TEU. That would be up 0.7% from last year's previous record of 21.8m TEU, which rose 6.2% over 2017.

Looking to next year, January 2020 is forecast at 1.81m TEU, down 4.5% from January 2019.

"The tariff war with China closely resembles a poker game, with each country continually upping the ante," adds Hackett Associates founder Ben Hackett. "As each side eyes its hand, things can only get worse."

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