PortandTerminal.com, August 29, 2019
New official figures from China’s Ministry of Transport show that the volume of containerized ocean freight, as measured in twenty-foot equivalent units (TEUs) through China’s 49 main box-ports in the year continue to rise despite the Washington-Beijing trade tensions.
BEIJING – So far, the effects of the US/China trade war do not appear to be showing up in the Chinese Ministry of Trade statistics.
New official figures from China’s Ministry of Transport show that the volume of containerized ocean freight, as measured in twenty-foot equivalent units (TEUs) through China’s 49 main box-ports in the year continue to rise despite the ongoing Washington-Beijing trade tensions.
In fact, Chinese Ministry of Transport containerised port throughput data shows that, in the year-to-July, the country’s national throughput stood at 132.7 million TEUs. That’s a 4.5% rise compared to the same period last year.
China’s busiest port by box throughput volumes is Shanghai. In the year to July, it has recorded throughput of 25.39 million TEUs, which is a 5.5% increase on the previous year.
Meanwhile, the ports of Los Angeles and Long Beach, which together form the nation’s largest hub for cargo trade with China, imported 789,788 20-foot equivalent units — a standard measure for container cargo — in July. That was up a mere 0.5% from the 785,901 TEUs that passed through the hub in July 2018.
“The trade war is hitting the West Coast hard,” Mario Cordero, head of the Long Beach port, said in a statement announcing July volumes. “For more than a year, the supply chain has bent under the weight, and there’s very little give left.”
President Trump though continues to Tweet that his tariffs are “hurting China more than us”, and that “We don’t need China”. But for someone who claims that we don’t need China, President Trump spends an inordinate amount of his Twitter energy focusing on them. Meanwhile, China seems to be getting on with business in spite of it all.
The President’s case for tariffs
The tariffs on Chinese goods, the Whitehouse says, will cause economic pain to China and force the Beijing government to make concessions on things like market access and stronger protections for intellectual property.
Maybe. But key American trade leaders are urging the President to step back from his spiralling rhetoric and ratcheting up of trade tariffs with China.
America threatening to stop purchasing Chinese products is like a diabetic patient threatening to stop purchasing life-saving insulin without having a backup plan.
The U.S. depends heavily on China for providing low-cost goods that enable income-constrained American consumers rely upon to make ends meet.
China is still an export-led economy, and the American consumer is its largest customer. But China’s export share of its gross domestic product has fallen from 37 percent in 2007 to slightly less than 20 percent today, an important outgrowth of a decade-long rebalancing. Exports are starting to matter less in China as its 1.4 billion domestic market continues to flourish.
The U.S. also depends on China to provide funding for its budget deficits. It is the largest foreign holder of U.S. Treasury securities – some $1.3 trillion in direct ownership and at least another $250 billion of quasi-government paper. A lack of Chinese buying could turn the next Treasury auction into a bloodbath.
On August 1, U.S. President Donald Trump announced that he would impose a tariff of 10 percent on virtually all categories of Chinese goods that have not yet been subjected to levies. Then, in a retaliatory measure, Beijing announced that it would reintroduce tariffs on American auto products and impose new tariffs on about $75 billion in U.S.-made goods. In a Twitter response, Trump said that he would increase current and planned tariffs on all Chinese goods by an additional five percent.
Business associations that oppose American tariffs and reciprocal Chinese trade measures – like the Retail Federation of America and the U.S. Chamber of Commerce – quickly voiced their objections to the new tariff announcements.
“We do not want to see a further deterioration of US-China relations,” said U.S. Chamber EVP and head of international affairs Myron Brilliant. “We urge the administration and the government of China to return to the negotiating table to complete an agreement that addresses concerns over technology transfer practices, intellectual property enforcement, market access, and the globally damaging impact of Chinese domestic subsidies.”
The American Farm Bureau, the biggest association of American farmers and ranchers, also called for calm and a return to bilateral talks. “Continuing negotiations is the best way to restore certainty to export markets farmers and ranchers depend on. We need substantive trade agreements that ensure American agriculture can provide an abundant and safe food supply for the world’s growing population,” said American Farm Bureau Federation President Zippy Duvall.
The administration is betting the health of our entire economy on a tariff strategy that is a proven loser
Americans for Free Trade, a group of 150 American business associations like the American Petroleum Institute, the American Chemistry Council and the National Retail Federation, called on Congress to intervene in the trade dispute. “The administration is betting the health of our entire economy on a tariff strategy that is a proven loser. These added tariffs will ratchet up consumer prices, stall business investment, escalate uncertainty and cost American jobs. Congress can’t sit on the sidelines any longer while jobs, retirement savings and local farms are put at risk by a trade war that gets more dangerous by the day. Enough is enough,” the group said via its public awareness campaign, Tariffs Hurt the Heartland.
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