♠ Posted by Emmanuel in
China,
Trade
at 11/12/2018 03:51:00 PM
 |
| "In the Red[s] corner, the heavyweight exporting champion of the world..." |
The veritable explosion of exports from the PRC to the United States is definitely related to the Trump administration's tariff-slapping ways. At the moment, the Yanks have applied 10% tariffs to $250B worth of China-made goods. At the start of 2019, if matters do not change substantively, these rates are scheduled to be raised to 25%. Having established supply chains deep in the PRC, what's an American importer to do? So far at least, may have decided to
front-load imports while tariffs are still *only* 10%:
China’s imports into the U.S. hit a monthly record in September, with the fourth quarter setting up for more potential records. Along with
container import and
trucking demand data from U.S. import gateways, the trade figures show the first round of tariffs on $250 billion in Chinese goods have done little to dissuade U.S. customers.
Instead, they sparked a “pull forward” effect by shippers to beat deadlines for tariffs on Chinese goods. The effect has not been uniform across all imports, with only some segments showing unusual growth. But the effect could pick up speed though the rest of the year as higher tariffs start in 2019.
The total dollar value of Chinese goods imported into the U.S. hit $50 billion in September, according to Department of Commerce figures released last week, up 10% year-on-year. Year-to-date, the dollar value of Chinese goods coming to the U.S. are up 8% to $394.7 billion.
As front-loading implies, there will be
hell to pay once this surge ends with the presumed imposition of 25% tariffs forthcoming as PRC-US trade dries up:
Analysts have said the practice by Chinese
exporters of accelerating production and shipment now to avoid the
upcoming tariff increase – or “front-loading” orders – is one probable
reason behind China’s strong export performance since Washington started
to levy its first round of tariffs on Chinese imports in early July.
The practice may be widespread, because Chinese
exports of chemicals, non-ferrous metals, plastics and special
industrial machinery were the fastest-growing Chinese export categories
in September, according to Chinese customs data, despite all of them
being included on US tariff lists. But fulfilling next year’s orders so far in
advance could lead to a significant slowdown in future sales if US
clients reduce their next orders accorditongly. China’s official
purchasing manager’s index has shown new export orders have been
contracting since June.
“Increased demand for shipments has pushed up shipping rates and some
exporters are even having trouble finding any space on cargo ships,”
Ding said. But the situation could quickly turn bad next year, he
warned, as exporters face a double blow from fewer new orders and a
sharp depletion of existing orders.
Where Chinese firms used to sending stuff Stateside will go to next if tariffs are hiked once more is an open question. For now, though, it's as though PRC concerns are making and shipping stuff to America like there's no tomorrow...or at least next to no orders come early 2019.
