12/2/2024–|Last updated: 12/2/202406:37 PM (Mecca time)
Exporters from China, Canada and Mexico are racing against time to advance shipments of their goods to the United States after President-elect Donald Trump pledged to impose new tariffs on goods from the three countries on his first day in office.
Representatives of logistics companies said, during the Supply Chain Expo in Beijing last week, that the number of customers asking about providing shipments increased in the wake of Trump’s threat to impose an additional 10% tariff on Chinese goods.
Expedite shipping
The Financial Times quoted Mao Ping, director of operations at the logistics company Haotong Group, based in Hunan, southern China, as saying: “We received a lot of inquiries,” referring in particular to the two days after Trump published the tariff data on his account on Truth Social on November 25. November.
Nissan Sinotrans International Logistics representative Zhang Junkai said there had been an increase in customer consultations, adding that customers hoped to have their goods shipped “before the end of the year and before Trump takes office.”
Within 24 hours after Trump announced he would impose 25% tariffs on all goods from Mexico and Canada, the logistics group had “countless” meetings with customers, said CH Robinson, vice president of the Americas.
“Some shippers were already loading cargo in advance of a potential strike at U.S. ports and a potential increase in tariffs on goods imported from China,” Lakshmana said. “Now, we can add a potential increase in goods imported from Mexico and Canada to the list of reasons shippers are exploring to advance shipping dates.” Their own,” according to what was reported by the British newspaper.
According to the newspaper, signs of preloading had already begun to appear a few days after Trump won the US presidential elections last month, and during the campaign, Trump threatened to impose 60% tariffs on goods from China, which he blames for the US trade deficit, and up to To 20% of all other countries.
Trump’s threat to impose additional tariffs on the United States’ three most important trading partners came at a time when he criticized their inability to prevent illegal drugs and immigrants from entering the United States.
“The announcement is more reminiscent of the first Trump administration, when such tariffs were announced as a negotiating tactic,” Goldman Sachs said in an analysis note.
At the China International Supply Chain Expo in Beijing, representatives from two major shipping lines said customers had begun pre-loading their exports even before Trump’s latest threats.
A Chinese shipping line representative said the president-elect’s pledge to impose additional 10% tariffs had heightened uncertainty, adding: “Customers are all saying we need to rush as much cargo as possible into the United States before Trump enters the White House on 20 January.
China’s exports
Another representative said the preloading trend was not reflected in rising freight rates, partly due to increased new ship capacity across the industry.
China’s exports rose 12.7% year-on-year in October, the fastest pace in more than two years, but some economists questioned the amount of front-loading that month in shipments to the United States, which has seen its trade deficit shrink due to lower imports.
When asked about their customers’ intentions even before Trump promised to act on “Day One,” several logistics executives said they were making plans to beat any new tariffs.
“We will see extreme demand,” said a logistics executive at a global shipping company. “(Merchants) will get as much of their needs as possible from China… It will definitely get very chaotic.”
The newspaper quoted the director of the shipping company Cetus Maritim, Mark Young, as saying that Trump’s victory made people rethink their longer-term shipping plans.
CH Robinson’s head of global shipping, Mike Short, said some exporters were simply trying to figure out the timing, adding: “One customer asked what was the last day their shipments could leave Asia and arrive in the US before the new tariffs came into effect.”
Signs of pre-loading are evident in American ports, and the Executive Director of the Port of Los Angeles, Gene Seroka, says that 905,000 shipping containers were transported in October, an increase of 25% over last year.
“Some shippers are loading cargo in advance as a precaution against potential new tariffs,” he said, but added that other factors, including labor issues at ports in the Gulf of Mexico and on the U.S. East Coast, also contributed.
Simon Heaney, senior director of container research at maritime consultancy Drewery, expects trans-Pacific shipping rates to rise sharply due to increased demand for advance shipments as more details emerge about Trump’s tariff schedule.
Chinese manufacturers have also begun to explore new markets and production centers.
Alternative base
An electronics group based in Guangdong in southern China, which supplies American home appliance manufacturers with components, said it is considering Morocco as an alternative foreign production base. An executive said that the company has postponed its plan to expand production lines in Mexico, expecting that Trump “will close the proximity loophole that Chinese companies are exploiting there.” .
HSBC’s chief Asia economist, Fred Newman, said exporters will have some time to consider their options as most of Trump’s tariff increases will only take effect in the second half of next year due to legal action.
“The most likely approach is a stepwise process,” Newman said.
