Air Freight News

Trump tariff threat helps lift US ocean imports

When U.S. presidential candidate Donald Trump started talking about new import tariffs on the campaign trail, Danny Reynolds checked the tags on wedding dresses in his bridal salon and sped up some shipments to his independent clothing store in Indiana.

"I was grabbing tags specifically to look at the country of origin and it was China, China, China, China, China, China," said Stephenson's of Elkhart boutique owner Reynolds, who moved deliveries of around 20 bridal gowns ahead by about two months. 

Trump has threatened to slap tariffs of at least 10% on goods from China and to impose levies of 25% on products from both Mexico and Canada, prompting importers like Reynolds to import early to avoid higher costs that are often passed on to consumers.

Shipping containers are stacked on a pier at the Red Hook Terminal in Brooklyn, New York, U.S., September 20, 2024. REUTERS/Brendan McDermid

A potential second round of Trump tariffs once he takes office on Jan. 20 is the latest addition to a laundry list of factors - including healthy U.S. consumer spending, federal investment in electric vehicle manufacturing and the risk of strikes at East and Gulf Coast seaports - prompting a surge in U.S. imports.

Citing examples of front-loading behavior, container-tracking software provider Vizion said Walmart, the biggest user of container shipping, has increased bookings consistently each week beginning with the third week of September. 

It also said Columbia Sportswear has shown consistently higher year-over-year bookings each week since the U.S. presidential election on Nov. 5. 

Those retailers did not immediately respond to requests for comment.

"In November, U.S. manufacturers, particularly in the consumer goods sector, increased their safety stocks to help blunt any immediate tariff increases," John Piatek, a vice president at procurement and supply-chain software provider GEP, said in a statement.

U.S. imports of containerized goods notched a 12.8% year-over-year increase in November, according to trade data supplier Descartes Systems Group.

Imports from China, which are subject to new tariffs under President Joe Biden and possibly more from Trump, were up 13.3% last month, Descartes said.  

Elevated import levels could extend through the first quarter of 2025 as shippers seek to avoid any new tariffs under Trump, BMO Capital Markets analyst Fadi Chamoun said in a client note. 

Importers have not disclosed how much more cargo they are bringing in due to the varied factors that are driving front loading.

Companies expect Trump will usher in a "very fast implementation of new tariffs," said Port of Los Angeles Executive Director Gene Seroka, adding that the country's busiest container seaport is on track for its busiest December on record.

If the first Trump tariffs in 2018 through 2019 are a guide, those importers could slam on the brakes in the coming months, Seroka said.

"We saw a run-up of cargo before tariff milestone or implementation dates, and then a huge drop off," Seroka said.

"Everybody's very uncertain as to what to expect," retailer Reynolds said, adding that his key suppliers also include Canada-based sportswear brands Joseph Ribkoff, Frank Lyman and Tribal, which did not respond to requests for comment. 

"The best hope is that some of this is, for lack of a better way to put it, scare tactics on the President-elect's part," he said. 


Reuters
Reuters

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