Mhlnews 10972 Container Shipping

Retailers Continue to Stock up Inventory to Get Ahead of More Tariffs

June 12, 2019
It’s time to stop using American families as pawns in negotiations for better trade deal, ” said Jonathan Gold of National Retailer Federation.

Imports at the nation’s major retail container ports are expected to continue to grow this summer as retailers stock up inventory to get ahead of higher tariffs, according to the monthly Global Port Tracker report recently released by the National Retail Federation and Hackett Associates.

“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.

“Tariffs are taxes paid by American businesses and consumers, not foreign governments,” Gold added. “ Retailers will continue to do everything they possibly can to mitigate the impact of tariffs on consumers, but if we see a 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.”

The administration 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.

The government 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.

In addition, the administration announced a 5% escalating tariff on all imports from Mexico, but those goods travel by truck or train and do no effect cargo numbers at U.S. seaports.

“One must wonder who the Trump administration is trying to punish with its growing enthusiasm for tariffs,” Hackett Associates Founder Ben Hackett said. “The tariffs are offsetting much of the savings from tax cuts, and if this continues there could be tough months ahead.”

U.S. ports covered by Global Port Tracker handled 1.75 million Twenty-Foot Equivalent Units in April, the latest month for which after-the-fact numbers are available. That was up 8.4% from March and up 6.9%. May was estimated at 1.88 million TEU, up 3% year-over-year.

Looking at the upcoming months here are the forecasts:

June -1.86 million TEU, up 0.3%

July -- 1.93 million TEU, up 1.1%

August - 1.95 million TEU, up 3.3%

September-- 1.89 million, up 0.9%

October -- 1.95 million TEU, down 4.4%.

The August and October numbers would be the highest monthly totals since the 2 million TEU record set last October as retailers rushed to bring merchandise into the country ahead of expected tariff increases.

Imports during 2018 set a record of 21.8 million TEU, an increase of 6.2% over 2017’s previous record of 20.5 million TEU. The first half of 2019 is expected to total 10.6 million TEU, up 3% over the first half of 2018.

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