U.S. retailers expected to stock up inventories
Imports at the United States’ major retail container ports are expected to continue to increase this summer as retailers stock up their inventories to get ahead of higher tariffs, according to the monthly Global Port Tracker report released Friday by the National Retail Federation and Hackett Associates.
The Trump administration last month announced 10% tariffs across $200 billion worth of Chinese goods in 2017 import value would increase to 25%, effective June 15. The administration is also collecting 25% tariffs across $50 billion worth of goods in import 2017 value. A fourth tranche of tariffs that could reach as high as 25% also was announced last month that would cover about $300 billion worth of goods in yearly import value.
In addition, the administration recently removed both Turkey’s and India’s status as beneficiaries of 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,” said Jonathan Gold, NRF vice president for supply chain and customs policy.
“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,” Gold said.
Escalating tariffs against Mexico starting at 5% had been planned to start Monday, “but those goods travel by truck or train and do not affect cargo numbers at U.S. seaports,” according to the Global Port Tracker announcement.
U.S. ports covered by the Global Ports Tracker handled 1.75 million TEUs in April, the latest month for which after-the-fact numbers are available. It represented an 8.4% increase over March and a 6.9% year-over-year growth, but was slightly below the 1.76 million TEUs estimated in the May tracker.
The tracker estimated ports handled 1.88 million TEUs in May, a 3% year-over-year increase but down from the 1.9 million forecast last month. It forecasts June at 1.86 million TEUs; July at 1.93 million TEUs; August at 1.95 million TEUs; and September at 1.89 million TEUs, all of which would be year-over-year increases but lower than last month’s forecasts.
October is forecast at 1.95 million TEUs, which is 4.4% lower than 2018.
“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,” according to the announcement.
The Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast.
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