Tariff activity continues to influence trend of increased U.S. imports, says Port Tracker

The most recent edition of the Port Tracker Report issued by the National Retail Federation (NRF) and maritime consultancy Hackett Associates late last week indicted that import levels and United States-based retail container ports are pegged to see growth in the coming months, with retailers boosting inventory levels in advance of increased tariffs.

The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, New York/New Jersey, Hampton Roads, Charleston, and Savannah, Miami, Jacksonville, and Fort Lauderdale, Fla.-based Port Everglades.

Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

The bump in tariffs stems from the White House having recently increased 10% tariffs on $200 billion worth of Chinese goods to 25% in May, with the increase applying to imports that arrive in the United States after June 15. And the report noted it has also proposed to implement new 25% tariffs on $300 billion worth of Chinese goods and recently removed India and Turkey from the Generalized System of Preferences program, which allows certain items to be imported duty-free.

“With a major tariff increase already announced and the possibility that tariffs could be imposed on nearly all goods and inputs from China, retailers are continuing to stock up while they can to protect their customers as much as possible against the price increases that will follow,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Tariffs are taxes paid by American businesses and consumers, not foreign governments. Retailers will continue to do everything they possibly can to mitigate the impact of tariffs on consumers, but if we see further escalation in the trade war, it will be much more difficult to avoid higher price tags on a wide range of products. It’s time to stop using American families as pawns in negotiations for better trade deals.”

U.S. ports covered in the report handled 1.75 million Twenty-Foot Equivalent Units (TEU) in April, the most recent month for which after-the-fact numbers are available, which was up 8.4% compared to March and up 6.9% annually. May was pegged at 11.88 million TEU, up 3% annually, and June is forecasted at 1.86 million TEU, up 0.3 percent. July is estimated to hit 1.93 million TEU, up 1.1%, and August at 1.95 million TEU, is projected to be up 3.3 percent. September and October, at 1.89 million TEU and 1.95 million TEU, are expected to see a 0.9% increase and a 4.4% decrease, respectively.  

The report stated that should the August and October volumes hit expected levels they would represent the highest monthly tallies since October 2018, which came in at 2 million TEU, which was driven by expected tariff increases.  And it added that the first half of 2019 is expected to hit 10.6 million TEU, which would mark a 3% annual gain.

Hackett Associates Founder pulled no punches in the report in addressing the negative impact of tariffs on various concerns.

“The repercussions are manifold,” Hackett wrote. “US importers, consumers and businesses are the payers of all these tariffs, including the current 25% on $200 billion of goods and the proposed new tariff of the same amount on another $300 billion. There’s not much left after that. It could also be a punishment for U.S. industry for investing in China and Asia in general as well as in Mexico. The tariffs are seen as a tool for ‘encouraging’ companies to re- locate manufacturing back to the United States. But with full employment, who is going to do the work? Perhaps the immigrants the administration wants to keep out? We are beginning to see the impacts on international trade as 2019 and 2020 trade growth projections are being pared back by international institutions and shipping companies alike. We should not be misled by the strong import numbers that were seen in the latter part of 2018 and this year’s inflows ahead of the new tariffs.”