What does a 60% drop in US imports from China look like? | Forexlive

Ryan Petersen from Flexport today highlights that it’s been 3 weeks since large US tariffs were put on China and that ocean container bookings are down over 60% across the industry.

He notes that the US imports $600 billion in goods (though I think the correct number is $460 billion) from China annually and those goods retail for around $2 trillion.

He said the first ships carrying goods that will be hit with the full rates arrived on Monday and the decline in freight will start to hit in the following weeks, though it will take awhile to hit retail because of a build in inventories.

Petersen also worries that an undoing of the tariffs will eventually cause a separate set of problems as ships are now being repositioned globally and that a surge in orders later could overwhelm the network — particularly if a reprieve in China tariffs is seen as temporary.

I don’t think anyone really knows how this will play out as many of the imports are intermediate goods and components for finished products. My guess is that this ultimately ends in a boom for transshipment and smuggling but it could easily be covid all over again or result in surprisingly little downsides. It’s truly uncharted waters.

“It’s a strange time in the logistics world as we have to plan for the unimaginable (autarky in the United States) while hedging for regression to the mean (relatively normal trade relations),” Petersen writes.