Chinese goods are racing against time to head to the United States at full speed, hoping to enter customs before U.S. President Trump’s import tariffs are implemented.
On the sea and in the air, the US-China trade war provoked by the US president has triggered a cargo frenzy. Ships of Hyundai Merchant Marine Co., Ltd. are loaded with goods from Chinese ports to the United States. The volume of cargo arriving at California ports in the United States has soared, and the freight rate for trans-Pacific voyages has reached a four-year high.
New tariffs set to take effect on Monday will make the stocking period before the holiday shopping season particularly busy. Chinese manufacturers are scrambling to get toys, bicycles, auto parts and other goods to U.S. stores before the tariffs hit. Air China’s cargo business to the United States is booming.
In Jiangsu Province, Zhenjiang Yidi Optoelectronic Lighting Co., Ltd. sent a batch of car lights to Los Angeles by sea at the end of August, earlier than originally planned.
Melissa Shu, the company’s export manager, said it will take about 25 days on the road and hopes to arrive in time. She said the company is also accelerating orders for another U.S. customer, who is prepared to pay additional air freight costs if new tariffs can be avoided.
Consumer Benefits
Starting Monday, $200 billion of Chinese goods exported to the United States will be subject to an additional 10% tariff, which is Trump’s biggest move so far in the trade war between the two countries. After that, U.S. importers need to stock up on more Chinese goods before the end of the year because the tax rate will increase to 25% next year.
As companies rush to ship goods from China, American consumers may benefit: household products from retailers such as Walmart and Target may not increase in price in the short term. In China, this advance export pushed the trade surplus with the United States to a record in August.
Trump has threatened to impose tariffs on another $267 billion of Chinese goods, which could cover almost all other consumer goods, including mobile phones, shoes, hats and clothing. Deutsche Bank said in a report this week that it could also spur U.S. companies to snap up purchases in advance. The National Retail Federation warned that the tariffs would lead to higher prices and even product shortages.
Toy Export
In Dongguan, an important industrial town in South China, Hasbro’s supplier Longchang Group is being pursued by American customers.
“In the past two months, more customers have asked us whether we can deliver goods in advance to avoid the upcoming tariffs,” said Liang Lin, chairman of Longchang Group. He said that for small high-tech toys with higher retail prices, some customers are willing to upgrade from sea shipping to air shipping.
These expedited orders are helping drive business at U.S. West Coast ports. Import volume at the Port of Oakland in northern California increased by 9.2% in August, making it the busiest August in the port’s 91-year history. At the Port of Long Beach, container imports increased 9.4% in the first eight months of this year, following record business in 2017.
According to the Drewry World Container Index, as of the week of September 13, the freight rate for a 40-foot container from the Port of Shanghai to the Port of Los Angeles reached US$2,362, the highest level since December 2014.
