US retailers are advancing orders from China to secure holiday inventories before anticipated tariff increases, according to Reuters.
US retailers have advanced orders from China by four to six weeks to secure inventories for holiday sales before expected tariff hikes later this year, reported Reuters.
Shipping executives stated that this move comes as Washington's universal 10 percent tariff, imposed in February, is set to expire on July 24. The US Trade Representative has proposed a 12.5 percent levy following an investigation into forced labor, which Beijing denies.
Tony Meng of XPD Global noted that importers are rushing to bring goods in before tariffs rise. Orders that usually peak between July and September were higher in May and June, resulting in increased shipping prices. US imports from China grew by 35 percent in May, up from 11 percent in April, and are expected to remain strong in June.
China's top exports to the US in May included smartphones, lithium-ion batteries, solid-state drives, toys, and festival products. Shipping group Maersk reported that container space has tightened since mid-May due to stronger demand and earlier seasonal bookings.
Executives indicated that back-to-school items and early Christmas stockpiling contributed to the surge, alongside World Cup-related orders such as jerseys, flags, and TVs. Drewry data showed spot rates from Shanghai to New York at US$7,149 per 40-foot container on June 25, reflecting a 6 percent increase from the previous week and a 25 percent increase from the previous year.
Outdoor furniture maker Jin Chaofeng expressed concerns that passing on higher shipping costs to customers would be difficult given thin margins. Kyle Henderson of Vizion warned that tariffs continue to weigh on overall demand, which remains below the three-year average, and he expects volumes to drop after July as inventories are already landed and costs rise.
