US Retailers Rush Imports As Tariffs Loom
Retailers are rushing to import merchandise from China before potential Trump Administration tariffs kick in, resulting in a projected 6.4 percent increase in containerized imports in April 2018 from April 2017, according to the National Retail Federation.
“With proposed tariffs yet to be officially imposed, retailers are stocking up on merchandise that could soon cost considerably more,” Jonathan Gold, NRF vice president for supply chain and customs policy, stated in the Global Port Tracker on Wednesday.
Furthermore, even as the effects of the tariffs are felt, Global Port Tracker is still projecting a 5.8 percent increase in containerized imports at major US gateways in the first half of 2018 versus the same period last year. “Despite the threats and risks to trade, we continue to see solid expansion and our models are projecting this to continue throughout the year,” said Ben Hackett, founder of Hackett Associates, which co-publishes the Global Port Tracker with the NRF.
Imports in March, the last month for which Global Port Tracker has actual numbers, were down 8.6 percent from February and down 0.7 percent year-over-year. The publication tracks containerized imports at 11 US gateways. PIERS, a sister product of JOC.com under IHS Markit, tracks imports through all US gateways. PIERS shows that imports rose 3.7 percent to 1.8 million TEU in March year-over-year, and were down 7 percent from February.
Containerized imports in March were expected to be lower than in March 2017 because of the floating Lunar New Year holiday in Asia. In 2017, the Lunar New Year was earlier, so imports in March bounced back strongly as factories in Asia returned to full production after being shut down for a week or two. In 2018, because of the factory closures that began on Feb. 16, imports fell during the post-holiday period in March. Nevertheless, imports this March were down less than 1 percent year-over-year, which indicates that retailers continue to stock their shelves to get ahead of the tariffs.
Global Port Tracker is bullish on imports in the coming months despite the trade uncertainties. It projects year-over-year increases of 4.3 percent in May, 6.1 percent in June, 5.5 percent in July, 4.6 percent in August, and 2.1 percent in September. “If tariffs do take effect, there’s no quick or easy way to switch where these products come from. American families will simply be stuck paying higher prices, and hundreds of thousands of US jobs could be lost,” Gold said.
Continued monthly increases in imports will build on the gains made in the past two years. US imports in the first quarter rose 7.6 percent to 5.7 million TEU, according to PIERS. Imports in 2017 set a record, up 7.6 percent from the previous record year in 2016, according to Global Port Tracker.
Disclaimer: Echemi reserves the right of final explanation and revision for all the information.