As the US-imposed 10 percent tariffs on $200 billion worth Chinese goods is set to take effect Monday, the race is now on to get Chinese goods into the U.S.
By plane, train, and sea, a frenzy has begun, resulting in surging cargo traffic at US ports, booming air freight to the US, and urgent dispatch of goods from Chinese companies earlier than planned. Getting in under the wire before Trump’s tariffs bite could mean hundreds of thousands saved on single shipments.
Bloomberg describes this week that cargo rates for Pacific transport are at a four-year high as manufacturers rush to get everything from toys to car parts to bikes into American stores.
This rush, which comes on top of a typically already busy pre-holiday season, is expected to continue well after next week as the tariff will leap from 10 to 25 percent after the new year.
US importers are expected to stockpile Chinese products before the 2019 25% mark. There’s currently widespread reports of companies scrambling to pay expedited air freight fees to dodge the new tariffs, as well as move up their orders.
Bloomberg relates the following on both sides of the Pacific:
Describing the tariff-induced rush, Rahul Kapoor, an analyst at Bloomberg Intelligence in Singapore, said “We have a rush game with the tariff,” and noted instances of cargo actually left behind at Chinese docks because ships were packed so full ahead embarking for the US.
The world’s 10 busiest ports captured by satellites from 530-km space
3. Shenzhen Port, China
A collection of ports along Shenzhen’s 260-km coastline, one of the busiest & fastest growing container ports in the world, hosting 40 shipping companies with 131 intl. container routes. pic.twitter.com/44S4zYXx3y
— Space View (@bjspaceview) September 12, 2018
If there’s one bright spot for Americans, it’s that initially the trade war — which has this week seen China with its own tariffs on $60 billion worth of US goods — is not expected to hit consumer check books right away.
With accelerated shipments from China in the short term in order to beat the tariff deadlines, the anticipated price hikes at retailer giants like Walmart and Target will likely be delayed due to the surplus of items coming in.
Meanwhile China, for its part has had its trade surplus with the US pushed to record levels in August due to the front-loading of exports.