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Tariffs impacting US seaborne imports

Tariffs imposed by the Trump administration on China and the European Union have already begun to have a "significant" effect on seaborne imports, according to a report from Panjiva Research, a division of S&P Global Inc.

Should President Trump follow through on his Sept. 7 announcement that the U.S. is set to impose tariffs on $200 billion of Chinese imports at any moment and could impose tariffs on another $267 billion of Chinese imports, the impact on import volume will likely deepen.

According to the Sept. 6 report, total seaborne imports fell by 1.4% in August compared with July, marking the first drop on that monthly basis since 2013 and just the third such instance over the past 11 years. Seaborne imports in August rose by just 1.4% year over year, following an average 6.9% rise in the prior three months.

Perhaps most telling is the 1.4% drop in imports from China in August on a year-over-year basis, due mainly to the imposition of 25% tariffs on $34 billion of Chinese goods on July 6 and $16 billion of Chinese goods on Aug. 23. Imports from China had been rising. For the three-month period of May through July, imports from China rose 6.9% compared to the same period a year earlier.

Panjiva does not expect the slowdown in import growth to end.

With Trump's potentially imminent decision to impose a 25% tariff on the $200 billion of Chinese goods — by far the largest of any floated tariff measures thus far against China — shipments could fall even further because of the sheer amount of consumer products included, such as mattresses, furniture, handbags, vacuums, hats and tilapia.

However, import figures for September may be higher due to stockpiling ahead of potential implementation. Trump could impose those tariffs as soon as Sept. 7.

"The underlying effect will likely continue in September as the full month impact of the existing tariffs take effect, though a race to beat duties on a further $200 billion of productions will likely also be underway," according to the report.

The first tranche of tariffs on $34 billion of Chinese goods included automotive parts as well as PC components and fuel components, while the $16 billion tranche included several types of consumer products including e-cigarettes, fans, charging cables and other electronics.

Imports from the EU also rose by just 1.4% in August year over year, a much slower pace of a 9.7% increase for the prior three-month period leading up to August compared the same period a year earlier, according to Panjiva. The Trump administration imposed tariffs of 25% and 10% on steel and aluminum from the EU on June 1.

But there are not all losers in the Trump administration's various trade spats, including alternate suppliers.

According to the report, imports from Vietnam are up 10.2% over the past three months and imports from India are up by 6.5% over that same span.

Although companies may look to these countries, many companies and producers throughout the various Chinese tariff public comment periods held by the Office of the U.S. Trade Representative have warned that they would be unable to source elsewhere due to logistics and cost hurdles.

Instead, several said they would have to continue to source from China while absorbing higher costs and passing them on to consumers, which could reduce demand for the products and overall imports from China.

Despite the tariffs, the National Retail Federation forecast that a monthly record in retail port imports will be set in August.