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Near-record levels expected for US retail imports in 2019 despite China tariffs

Retail imports at U.S. container ports are expected to continue at near-record levels during 2019 despite a new round of tariffs on Chinese imports, according to the National Retail Federation.

The first half of 2019 totaled 10.5 million 20-foot equivalent units, or TEU. That is an increase of 2.1% compared with the first half of 2018, the industry group said in its Aug. 8 Global Port Tracker report with maritime consulting firm Hackett Associates. A TEU is a 20-foot-long cargo container or its equivalent.

Full year 2019 is expected to total 21.7 million TEU, compared with 2018's record 21.8 million TEU. Although the 2019 forecast is high, many of the monthly year-over-year numbers declined since 2018 saw retailers rushing to import merchandise ahead of scheduled tariff increases, the National Retail Federation, or NRF, said.

The U.S. imported 1.8 million TEU of retail goods in June, the latest month with available data. That was down 2.9% from May and down 3% year over year. The NRF had forecast 1.87 million TEU for June.

The NRF issued the following forecasts for the coming months:

July: 1.86 million TEU, down 2.6% year over year.

August: 1.91 million TEU, up 0.6% year over year.

September: 1.85 million TEU, down 1.1% year over year.

October: 1.91 million TEU, down 6.2% year over year.

November: 1.84 million TEU, up 1.8% year over year.

December: 1.81 million TEU, down 7.9% year over year.

On Aug. 1, President Donald Trump announced that 10% tariffs on $300 billion worth of goods from China would take effect starting Sept. 1. This is in addition to the 25% tariffs imposed on $250 billion of imports from China. According to data released by the Tariffs Hurt the Heartland coalition, American importers paid $6 billion in tariffs in June, up 74% from $3.5 billion in June 2018.

However, it is not "quick or easy" for retailers to change their supply chains, Jonathan Gold, NRF's vice president of supply chain and customs policy, said in a news release. So for now, companies will continue to import their goods from China.

"That means American families are ultimately going to pay more for goods they can't do without," Gold said. "And even if sourcing eventually shifts away from China, it will simply come from other countries."

Ben Hackett, founder of Hackett Associates, said the 10% tariffs will likely not have an immediate impact on import volumes. An increase to 25%, however, "would have a significant impact and would cause us to lower our trade projections further."