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U.S. Retail Imports Expected to Surge Ahead of December Tariffs, NRF Says

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October 10, 2019

FILE PHOTO: A container ship arrives at Yusen Terminals (YTI) on Terminal Island at the Port of Los Angeles in Los Angeles, California, U.S., January 30, 2019. REUTERS/Mike Blake/File Photo

Imports at the nation’s major retail container ports are expected to hit their highest level of the year again next month ahead of new tariffs set to take effect in December, according to the Global Port Tracker report released Wednesday by the National Retail Federation and Hackett Associates.

New 15 percent tariffs that took effect at the beginning of September on a wide range of consumer goods from China are scheduled to be expanded to additional goods on December 15, covering a total of about $300 billion in imports. In addition, 25 percent tariffs on $250 billion worth of imports already imposed over the past year are scheduled to increase to 30 percent on October 15.

“This is the last chance to bring merchandise into the country before virtually everything the United States imports from China comes under tariffs,” says NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “Retailers are doing all they can to mitigate the impact of tariffs on their customers. The effect on prices will vary by retailer and product during the holiday season, but ultimately these taxes on America businesses and consumers will result in higher prices.”

U.S. ports covered by the NRF’s Global Port Tracker handled 1.97 million Twenty-Foot Equivalent Units in August, up 0.2 percent from July and up 3.9 percent year-over-year, ranking August as the second busiest for containerized imports after last October’s record of 2 million.

Numbers dipped in September as new tariffs took effect, coming in at an estimated 1.9 million TEU, up 1.6 percent year-over-year.

The Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. 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.

While October imports are forecasted to be down 5.1 percent to 1.93 million, November is actually forecasted to see an 8.9 percent year-over-year increase with 1.97 million TEU, which would tie it with August as the second-highest number of containers in a single month.

According to the NRF, however, imports are forecasted to fall significantly in December to 1.78 million TEU, a decrease of 9.3 percent year-over-year, as December 15 tariffs hikes take effect. The NRF notes that by that point most holiday merchandise has already arrived, typically leading to a slower December.

The first half of 2019 totaled 10.5 million TEU, up 2.1 percent over the first half of 2018, and 2019 is expected to see a new record of 22 million TEU. That would be up 1.2 percent from last year’s previous record of 21.8 million TEU, the NRF notes.

January 2020 is forecast at 1.86 million TEU, down 1.9 percent from January 2019. February – traditionally the slowest month of the year because of Lunar New Year factory shutdowns in Asia – is forecast at 1.59 million TEU, down 1.8 percent from a year ago.

“Let there be no doubt, U.S. trade policies and enforcement mechanisms have directly caused a global slowdown in economic growth,” Hackett Associates Founder Ben Hackett said. Nonetheless, imports are continuing to grow as retailers bring merchandise into the country ahead of tariffs. “The strength of retail consumption will push any meaningful slowdown in imports into next year, when the full impact of the tariff wars will be translated into a consumption tax felt by consumers.”

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