New US tariffs could trigger trade war retailer body warns
New tariffs on steel and aluminium imports imposed by the US last week could spark an international trade war and also result in a negative impact on containerised imports in the longer term, according to the US National Retail Federation (NRF).
As reported in Lloyd’s Loading List earlier this month, foreign manufacturers of certain products including washing machines and solar panels have been ramping up shipments to the US in order to boost inventories aheadof the proclamations signed President Trump on Thursday imposing a 25% penalty on steel imports and 10% penalty on aluminium imports.
Retaliation against the tariffs, which are due to come into force within 15 days, are expected from rival steel producers including the EU.
“With steel and aluminium tariffs already in place, new tariffs on goods from China being threatened and the ongoing threat of NAFTA withdrawal, we could very quickly have a trade war on our hands,” said Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy.
“The immediate impact would be higher prices for American consumers that would throw away the gains of tax reform and put a roadblock in front of economic growth.
“But in the long term we could see a loss in cargo volume and all the jobs that depend on it, from dockworkers on down through the supply chain.”
Ben Hackett, founder of maritime strategy and trade logistics consultancy, Hackett Associates, said a potential trade war would have a negative impact on cargo growth to the detriment of both consumers and US industry.
“The likelihood of an increase in exports evaporates as well, killing off any chance for an improvement in the balance of trade,” he added.
The latest Global Port Tracker produced by the National Retail Federation and Hackett Associates forecasts that US imports to major retail ports would dip slightly this month - but this would be due to annual Asian factory shutdowns for Lunar New Year holiday rather than the new tariffs on steel and aluminium.
Ports covered by Global Port Tracker handled 1.73 million TEU in January, the latest month for which after-the-fact numbers were available. That represent a 0.2% increase from December and was up 1.8% year-on-year.
February was estimated at 1.66 million TEU, up 13.7% year-over-year; March was forecast at 1.53 million TEU, down 1.8% from last year; while the April forecast of 1.7 million TEU would represent a 4.7% year-on-year gain. Additional year-on-year gains of 2.5%, 4.7% and 4% are forecast, respectively, for May, June and July.
“The February and March numbers are skewed by variations in when Lunar New Year falls each year and Asian factories close for periods ranging from a week to a month,” said the report.
Total US box imports in first half of 2018 are expected to total 10.2 million TEU, an increase of 4.1% over the first half of 2017.