President Trump announces new China tariffs of 10pc on September 1
THE trade war is back following the announcement by US President Trump that beginning September 1, a tariff of 10 per cent would be placed on the remaining US$300 billion of Chinese imports that had not previously been subject to tariffs
THE trade war is back following the announcement by US President Trump that beginning September 1, a tariff of 10 per cent would be placed on the remaining US$300 billion of Chinese imports that had not previously been subject to tariffs.
US Treasury Secretary Mnuchin and US Trade Representative Lighthizer recently returned from China with no progress on trade talks. President Trump also complained that China has not fulfilled its pledge to crack down on the illicit trade in fentanyl, a deadly opiate behind many overdose deaths in the United States.
These new tariffs are expected to hit consumer wallets harder - the tariffs will be placed on items like electronics, apparel and household goods, and the costs are more likely to be passed on in the form of higher prices, reports New York's FreighWaves.
Because the tariffs are expected to be imposed at the beginning of next month, there will be little time - about a week - for shippers to load container vessels with freight in time to beat the tariffs.
Transit times from Shanghai to Los Angeles are about 21 days. But if shippers believe that the Trump administration might increase those tariffs from 10 per cent to 25 per cent, as happened with other classes of commodities, they could still be motivated to pull freight forward on container ships.
Regardless of the prospect of further escalations, FreightWaves expects shippers to take advantage of low air cargo rates to quickly move goods to the United States.
Freight markets have been resistant to steamship lines' general rate increases, as any attempts to bump ocean rates have quickly deteriorated. These tariffs, coming ahead of peak season, may reverse that trend.
The problem is that there still isn't much warehousing space in major port cities. According to Cushman & Wakefield data, warehouse vacancy rates in Los Angeles are about 2 per cent compared to the long-running national average of 5.8 per cent (the current national average is 4.5 per cent). Savannah is even tighter, running at about a 1 per cent vacancy rate.