Quantcast
Connect with us

US ports brace for surge of imports ahead of new tariffs on China

Published

on

The latest lurches in President Donald Trump’s trade war with China set the stage for a potential repeat of late 2018 when goods flooded into America’s ports to beat new tariffs.

US importers, retailers and shippers are bracing for a new round of punitive duties on Chinese goods set to hit in two steps, September 1 and December 15, likely to drive a rush to get products before the holiday shopping season as they did last year.

ADVERTISEMENT

The surge in late 2018 helped major US ports notch all-time cargo records. But the rush also raised costs as importers raced to get their items in under the wire, only to be forced to let them sit for exceptionally long periods on ships or in warehouses, where tight capacity meant premium rates.

“Folks didn’t need the goods that were coming in. It was simply a financial play to avoid the higher taxation,” said Gene Seroka, executive director of the Port of Los Angeles.

Now the ports on the frontline of the grinding US-China trade war, are feeling some deja vu, with Trump’s latest tariff announcement tailor-made to produce another year-end holiday rush.

But some experts think the import surge could be more modest this time around.

– More time for importers –

ADVERTISEMENT

Trump announced on August 1 his plan to impose 10 percent tariffs on $300 billion in Chinese goods on September 1 — targeting all products not hit by earlier tariff rounds.

But after an outcry from retailers over the impact on consumers, Trump last week relented and delayed tariffs on more than half the list, sparing toys, cell phones, laptops and other items until December 15.

The new schedule provides a big enough window for shippers to consider frontloading their orders cargo, accelerating their orders to beat the new taxes.

ADVERTISEMENT

Shippers are asking themselves “Can the factories produce quickly enough, can we advance orders?” Seroka told AFP. “It’s a similar conversation to the ones we had last year.”

AFP/File / Mark RALSTONThe Port of Long Beach, California is not convinced it will see a big surge from China like last year since trade has been depressed

Joe Shamie, owner of Delta Enterprises, a New York retailer specializing in cribs, baby gear and children’s furniture plans to accelerate orders again this year, although he describes the benefits as marginal.

ADVERTISEMENT

“We will frontload,” Shamie told AFP. But, he said, “There’s limits to how much I can finance. There’s limits to what I can store.”

The December 15 tariffs include infant walkers, highchairs and bouncers — all items sold by Delta.

In 2018, Delta ordered more than 10,000 cribs to beat 25 percent tariffs that were expected to take effect January 1, 2019, but were not imposed until May. Delta increased prices to offset the hit, Shamie said.

ADVERTISEMENT

– A big bump for ports? –

Los Angeles is among the ports that scored record volumes in 2018 and has continued to report impressive numbers in 2019, offsetting declining trade with China with increased volumes with Vietnam, Thailand and other Asian countries, Seroka said.

AFP / Gal ROMAUS-China tariff hikes

Situated on the West Coast, Los Angeles and the neighboring Port of Long Beach comprise the San Pedro Bay Port Complex that have relied on China for the vast majority of its trade by value.

Ports in the Northeast, Southeast and Gulf Coast benefited to a lesser extent from frontloading, experts said.

ADVERTISEMENT

Jonathan Gold, a vice president of supply chain and customs policy at the National Retail Federation, said importers are still poring over tariff lists released only last week to decide their next steps.

“Retailers are still trying to figure out their strategy,” he said.

But they are mostly out of luck when it comes to the goods on the September 1 list because some were already in transit when Trump announced the tariffs.

“It’s very difficult to go back and negotiate with your vendors when product is already on the water,” Gold said.

ADVERTISEMENT

Limited warehouse capacity at US ports nationwide provides another challenge, while new international low-sulfur fuel standards going into effect on January 1, likely will take some vessels out of service late in the year for upgrades, said Walter Kemmsies, a managing director at Jones Lang LaSalle, a commercial real estate firm.

Still, Kemmsies expects another surge, saying “I think it’s going to be every slot filled.”

A strong US consumer ensures strong demand for product, but depressed trade with China due to earlier tariff rounds of 25 percent tariffs could soften the impact on ports. Recession fears in the US also could dampen demand.

Daniel Hackett, a partner at Hackett Associates, a trade consultancy, predicted less frontloading this time compared with the 25 percent level last year.

“I think we’ll see a slight bump,” he said, adding in an email that “it’s really hard to tell what’s real when policies are announced via Twitter.”

ADVERTISEMENT


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

‘People’s lives will be lost’: Psychiatrist warns ‘sociopath’ Trump is ‘getting worse’ — and failing in coronavirus response

Published

on

President Donald Trump's psychological problems are getting worse and could be consequential as America faces a potential COVID-19 coronavirus pandemic.

MSNBC's Lawrence O'Donnell on Thursday interviewed Dr. Lance Dodes, a former assistant clinical professor of psychiatry at Harvard Medical School.

"As you pointed out, Lawrence, this man is about himself. He really is not about the country, he's not about public health," Dr. Dodes said of Trump.

"Although he has already severely damaged the country by being a psychopath or sociopath -- in many ways, he's damaged democracy -- I think people's lives will be lost now," he warned. "Individual lives will be lost because of the way he's mishandling the coronavirus issue."

Continue Reading

2020 Election

‘Something really rotten’: Here’s the evidence of extensive voter suppression in Georgia’s notorious 2018 election

Published

on

As the 2020 presidential campaign cycle grinds on, there’s renewed concern about the 21st century’s newest form of warfare: cyber-sabotage of government systems, including elections and online disinformation intended to incite unrest. But as Suppressed: The Fight to Vote, a documentary from Brave New Films, makes clear, partisan voter suppression tactics with 20th-century roots remain and can thwart multitudes of voters from changing their state’s political leaders.

Continue Reading
 

Breaking Banner

The real story behind Trump’s new lawsuit against the New York Times

Published

on

Wednesday was an ominous day for freedom of the press in this country, and I want to tell you why.

You may have heard or seen that President Trump filed a libel suit against the New York Times. Perhaps you weren’t surprised: the president is known to frequently disparage the Times even as he reads it obsessively. Borrowing a page from what I’ve referred to before as a Mount Rushmore of totalitarians, Robespierre, Hitler, Stalin and Mao, Trump loves to call the press the “enemy of the people.”

Continue Reading
 
 
close-image