Imports at U.S. retail container ports could be threatened by the global tariffs on U.S. aluminum and steel imports imposed by President Donald Trump, according to a National Retail Federation report.
In its March 9 "Global Port Tracker," the NRF and maritime consulting firm Hackett Associates said the tariffs, combined with threats on Chinese products and the uncertainty of the future of the North American Free Trade Agreement, could reduce retail cargo shipments.
"With steel and aluminum tariffs already in place, new tariffs on goods from China being threatened and the ongoing threat of NAFTA withdrawal, we could very quickly have a trade war on our hands," Jonathan Gold, NRF vice president for supply chain and customs policy said in the report. "The immediate impact would be higher prices for American consumers that would throw away the gains of tax reform and put a roadblock in front of economic growth. But in the long term we could see a loss in cargo volume and all the jobs that depend on it, from dockworkers on down through the supply chain."
The comments come on the heels of what was a record-setting year for U.S. retail port imports. In the Feb. 9 "Global Port Tracker" report, the NRF and Hackett said U.S. ports handled 20.5 million twenty-foot equivalent units, or TEUs, in 2017, breaking the previous record of 19.1 million TEUs in 2016 by more than 7.6%.
The U.S. ports reviewed in the report handled 1.66 million TEU of imports in February, a 13.7% rise year over year. The groups said the substantial February increase — and a predicted 1.8% dip in March — are a result of variation in the Lunar New Year, which fell on Feb. 16. Asian factories close from between a week and a month for the holiday, they said.
In its own analysis of port imports, Panjiva Research, a division of S&P Global Market Intelligence, found that container shipments at U.S. ports climbed 13.5% year over year in February, which it said is the greatest single month of growth since February 2016. However, that trend may not continue, Panjiva said.
"The underlying strength of imports is one reason for the emergence of tariffs on imports from the Trump administration," the report read. "The threat of these overhangs port activity."
"I wouldn't disagree with the broad concept that tariffs could be bad for port activity," Panjiva research analyst Christopher Rogers said in an interview.
On March 8, Trump signed orders enacting tariffs of 25% on global steel imports and 10% on aluminum that would go into effect in 15 days, citing national security concerns stemming from overreliance on foreign-made steel and aluminum for American military machinery.
NRF President and CEO Matthew Shay warned in a March 8 statement that the tariffs will raise the cost of certain consumer products, including canned goods, cars and electronics, adding that the retail industry is "extremely concerned" about the possibility of an ensuing trade war. The European Union has already threatened retaliatory measures against U.S. exports as a result of the tariffs, while both China and Japan have said the tariffs will harm trade relations.
In the "Global Port Tracker," Hackett Associates founder Ben Hackett said the negative impact on cargo growth from a potential trade war would be "to the detriment of both the consumer and U.S. industry."
"The likelihood of an increase in exports evaporates as well, killing off any chance for an improvement in the balance of trade," he added.
"Global Port Tracker" covers 14 U.S. ports, including the ports of New York/New Jersey, Miami, Los Angeles/Long Beach, and Seattle and Tacoma.
