Chinese import volumes have remained robust, contributing to growing congestion at ports in both China and the US, a situation that is expected to persist. The Biden administration’s effort to impose a 10% tariff on all Chinese imports, as reported by the BBC’s Ross Atkins, aims to enhance self-reliance and protect US consumers from inflated prices caused by overseas suppliers. However, the effectiveness of the 25% tariffs implemented since 2018 has been questioned, especially as recent data indicates significant delays at ports in both countries.
Fraser Robinson, CEO of Beacon, noted that average vessel anchor times surged in anticipation of the Lunar New Year, particularly in major ports such as Shanghai, where average anchor times approached 21 hours in January, significantly up from December levels. Meanwhile, US East Coast ports also experienced increased delays, with Charleston and Savannah showing similar trends. These port conditions signal a potential year of unpredictability for container shipping, exacerbated by pressures from tariffs and potential changes in service through the Suez Canal.
Initially, the 25% tariffs were introduced in mid-2018 on various imported goods from China. A 2020 trade agreement intended to strengthen ties required China to purchase an additional $200 billion in US goods and services. However, the Peterson Institute for International Economics (PIIE) reported that China only managed to fulfill 58% of this commitment, showing that the trade deal, touted as “historical,” has largely failed.
Trade analyst Antonella Teodoro emphasized the long-standing trade imbalance between the US and China, noting that in 2017, China shipped significantly more containers to the US than vice versa. In 2021, US imports from China soared to nearly 12 million twenty-foot equivalent units (TEUs), driven by pandemic recovery and high consumer demand, while US exports to China fell to only 1.73 million TEUs and slightly lower in the following year.
The trade wars and subsequent pandemic have created turbulence in trade flows, with forecasts for 2024 suggesting a slight recovery in China-to-US trade. However, US exports remain weak. According to MDS Transmodal, US imports from China were 10.6 million TEUs in 2017, declining to 10.4 million TEUs by 2024. Exports followed a similar downward trend, reducing from 2.78 million TEUs in 2017 to 1.65 million TEUs by 2024.
Despite the overall declines, Teodoro points out nuances in tonnage data. US imports from China reached 82 million tonnes post-tariff but fell to 70.5 million tonnes by 2024. Conversely, US exports to China peaked at 127.4 million tonnes in 2021 before declining to 99.3 million tonnes last year. This indicates that while commodity-driven US exports may be under pressure, container-heavy and value-driven Chinese exports have faced sharper declines.
In summary, while tariffs and trade policies were intended to enhance US trade self-sufficiency, they have not visibly improved trade balances, leading to continued congestion and unpredictability in shipping logistics. The future may hold both challenges and slight recoveries as trade dynamics evolve.
