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Freeing goods from tariffs would revitalise transpacific box trade

THERE is optimism that a partial truce, termed 'Phase One' by the Trump administration, could be signed soon, bringing a de-escalation of the US-China trade war that has been having a negative effect on transpacific container shipping volumes

Freeing goods from tariffs would revitalise transpacific box trade

THERE is optimism that a partial truce, termed 'Phase One' by the Trump administration, could be signed soon, bringing a de-escalation of the US-China trade war that has been having a negative effect on transpacific container shipping volumes

07 November 2019 - 19:00

THERE is optimism that a partial truce, termed 'Phase One' by the Trump administration, could be signed soon, bringing a de-escalation of the US-China trade war that has been having a negative effect on transpacific container shipping volumes.

'The crucial point from a container shipping perspective will be whether the US will cancel the planned December 15 tariffs, and remove some of the current tariffs in line with China's demands,' Sea-Intelligence chief executive Alan Murphy was quoted as saying in a report by London's Lloyd's List.



'If these issues are not resolved, it is very likely that the Phase One deal will collapse, although current analyst consensus seems to point towards a deal.'



Tariff List 4b is critical for container shipping, as the commodity groups covered are highly seasonal goods where China represents 92 per cent of all containerised imports into the US.



'This means that for the List 4b goods, it is not simply a question of scaling up production elsewhere, as these goods are simply not being produced anywhere else at present, so completely new production facilities and sourcing processes would be required,' said Mr Murphy.



'If that is not enough of a challenge, the highly seasonal nature of these goods provides additional complications. We will be crossing our fingers for a trade deal, but if one is not reached, the 2020 peak season will require a complete redesign of central supply chains.



'The impact of List 4b may therefore turn out to be very different than for the other tariff implementation rounds, so carriers, freight forwarders and importers should plan accordingly.'


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