There was deep concern that the decision of the United States to impose import duties on Chinese goods would have a severe negative impact in the volumes of imports from that part of the world.

However, President Donald Trump’s war of words with China is having an effect on its trade volumes in a way that not many analysts might have expected. Container traffic across the Pacific has jumped. Ships are completely full.

The Financial Times reported that any lack of comprehension among government officials in turn has led to uncertainty among those companies that export to the US. Judging from the surge in the price to ship a standard 40ft container, Chinese exporters and their customers have decided to fulfil orders before US trade tariffs become more widespread. Late last month, the US added 10 per cent tariffs on to $US200 billion worth of Chinese imports, on top of the $US50b already in place. Container rates between Shanghai and Los Angeles are up 40 per cent year on year as of September, according to Drewry, a consulting firm.

Meanwhile, shipping costs to Europe have fallen. Bigger fleets in Europe make a difference, but the key driver is probably the import tariff concern. This trade battle could also encourage a shift in production away to south-east Asia. Wages in China have already increased 11 per cent annually since 2008. Routes from there to the US west coast have also risen in price. While China-to-US rates may taper off in the coming year, those from south-east Asia should keep steaming ahead.

PhotoTransport

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