Trump: Splitting Tariffs, news by Hebei Longsheng
| The main event in trade policy in the past week was the Trump administration's decision to split the next round of tariffs in two, potentially limiting the impact on consumers and shipping but doing little to defuse tensions. There's evidence from U.S. import price and customs duty data that there's some burden sharing going on - with Chinese companies cutting export prices. Corporate reactions to tariffs continue to focus on price increases (eg Funko, Lenovo and Inventec) while Maersk has quantified the impact of tariffs on global shipping volumes. The back-to-school shopping season may face disruptions. Elsewhere in trade policy we focused on Brexit - with less than 80 days to go - including the impact on the autos, food, healthcare and logistics sectors. Other research this week covered: the freight forwarders' performance; electric vehicle sales; biodiesel; and Alaskan fishmeal. Report of the week - Trump’s de-escalation may reduce peak shipping disruption The Trump administration has modestly de-escalated the trade war by splitting the so-called “list 4” tariff group – where duties of 10% were due from Sept. 1 – into two parts. The minority part, worth $108.8 billion in terms of imports in the 12 months to Jun. 30 and known as list 4A will have duties of 10% applied from Sept. 1. The leading product lines include certain apparel lines worth $38.8 billion and TVs/monitors worth $8.6 billion. List 4B, which covers $154.8 billion of products. includes phones, laptops, toys and the remaining apparel items. Tariffs on those products will be delayed until Dec. 15 at a 10% rate. Importantly the restructuring reduces the risk of interrupting seasonal peak shipments. Imports of the list 4B apparel items typically peaked in August in the past three years. Shipments of toys normally reach a maximum in October while phones peak in October or November; and laptops peak in November or December. So far only laptops showed signs of stockpiling with a 39.1% year over year rise in June – likely after earlier talks failed in May – with all other list 4B items down 0.1%. |
