U.S. Imports From Asia Rises Ahead of Peak Season

US imports from Asia rose 4.2 percent year over year in July, with analysts forecasting a retraction to slight uptick in volumes in the traditionally busy August-October period.

However, eastbound spot rates to the West Coast last week fell 7.2 percent from the previous week, and were 28.7 percent lower than the same week last year, according to the Shanghai Containerized Freight Index published under the Shipping & Logistics Pricing hub. That indicates most ships leaving Asia were not full in the first 10 days of August.

US imports from Asia are up 2.1 percent from January-July 2018, according to PIERSt. Imports from China were down 2 percent in July and 4.4 percent below the same period seven-month period in 2018. Imports could drop further this fall because 10 percent tariffs on the remaining $300 billion of imports from China will take effect Sept. 1 for some items and Dec. 15 for other goods.

A separate report on the second quarter US imports from Asia in dollar terms by Sea-Intelligence Maritime Consulting shows that West Coast ports are being hit quite hard by the Trump administration tariffs, while East and Gulf Coast ports have  been "largely unaffected." The analysis, derived from US Census Bureau statistics, found containerized import cargo through the eastern ports increased 7 percent in the second quarter from the second quarter of 2018. West Coast imports declined 2 percent in the second quarter. It's not clear whether that's because last year's front-loading of imports to avoid higher tariffs was concentrated on the West Coast or due to other factors.

Laden imports in July totaled 1.543 million TEU, up from 1.480 million TEU in July 2018, according to PIERS. China accounts for more than 70 percent of US imports from Asia.

Year over year monthly comparisons of import volumes show both the seasonality of the eastbound trans-Pacific, the largest US trade lane, and the impact of the tariffs that have been phased in this year. Imports from Asia increased 5.5 percent in January 2019 from January 2018 in the traditional pre-Chinese New Year ramp-up in shipments before many factories in Asia close for the holidays.

Year-over-year imports declined 7.1 percent in February and 0.2 percent in March, due to the post-Chinese New Year lull, but also because US retailers and importers last November and December front-loaded imports ahead of the threatened 25 percent tariffs originally scheduled to take effect on Jan. 1, 2019. The front-loading reduced import volumes in early 2019.

Tariffs on imports from China increased from 10 percent to 25 percent on June 1. With shippers moving up shipments to get ahead of the tariffs, imports from Asia increased 5.8 percent in April and 5.8 percent in May from the same periods last year. Containerized imports then declined 0.1 percent in June and were up 4.2 percent in July, according to PIERS.

Source: Journal of Commerce