Transpacific trade won’t recover for at least a couple of years, says an article in the Loadstar.
Most of the tariffs remain in place. And much trade has shifted from China to other Southeast Asia countries, like Vietnam, rather than returning to China. US container imports from China are off by more than 8% compared with last year. Vietnam was up 33%, to 1.4m teu; Thailand was up 18%, to 570k teu, and Malaysia was up 27%, to 335k teu. But total trade from the region is down.
And US consumers have already overpaid by $38 billion for goods from February of 2018 to September of 2019. That is the typical story in trade wars; the consumer pays for the war through increased prices for purchases. It’s a premise of trade economics; when trade is restricted, the consumer must buy at higher prices because they can’t get them from the lower-cost location.
And it’s not clear at all that the trade deal between the US and China will change that trend away from China, and down in general. Of course, we don’t know what is really in the deal yet, or which things will actually happen. And we know there’s been little advance on the intellectual property front, and the US has ceded the opportunity to gain support for dumping claims through the WTO.
Not a pretty picture for the Transpac trade.Mike Wackett