NEW YORK (AFP) – The latest lurches in President Donald Trump’s trade war with China set the stage for a potential repeat of late 2018 when goods flooded into America’s ports to beat new tariffs.
US importers, retailers and shippers are bracing for a new round of punitive duties on Chinese goods set to hit in two steps, September 1 and December 15, likely to drive a rush to get products before the holiday shopping season as they did last year.
The surge in late 2018 helped major US ports notch all-time cargo records. But the rush also raised costs as importers raced to get their items in under the wire, only to be forced to let them sit for exceptionally long periods on ships or in warehouses, where tight capacity meant premium rates.
”Folks didn’t need the goods that were coming in. It was simply a financial play to avoid the higher taxation,” said Gene Seroka, executive director of the Port of Los Angeles.
Now the ports on the frontline of the grinding US-China trade war, are feeling some deja vu, with Trump’s latest tariff announcement tailor-made to produce another year-end holiday rush.
But some experts think the import surge could be more modest this time around.
Trump announced on August 1 his plan to impose 10 percent tariffs on $300 billion in Chinese goods on September 1 – targeting all products not hit by earlier tariff rounds.
But after an outcry from retailers over the impact on consumers, Trump last week relented and delayed tariffs on more than half the list, sparing toys, cell phones, laptops and other items until December 15.
The new schedule provides a big enough window for shippers to consider frontloading their orders cargo, accelerating their orders to beat the new taxes.
Shippers are asking themselves ”Can the factories produce quickly enough, can we advance orders?” Seroka told AFP. ”It’s a similar conversation to the ones we had last year.”
Joe Shamie, owner of Delta Enterprises, a New York retailer specializing in cribs, baby gear and children’s furniture plans to accelerate orders again this year, although he describes the benefits as marginal. ”We will frontload,” Shamie told AFP. But, he said, ”There’s limits to how much I can finance. There’s limits to what I can store.”
The December 15 tariffs include infant walkers, highchairs and bouncers – all items sold by Delta.
In 2018, Delta ordered more than 10,000 cribs to beat 25 percent tariffs that were expected to take effect January 1, 2019, but were not imposed until May. Delta increased prices to offset the hit, Shamie said.