Donald Trump\u2019s trade war with Beijing is starting to affect the wider US economy as container port operators and air freight managers report sharp declines in goods transported from China.<\/p>\n
Logistics groups said container bookings to the US have fallen sharply since the introduction of 145 per cent tariffs<\/a> on Chinese imports to the US.<\/p>\n The Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals in the week starting May 4 to be a third lower than a year before, while airfreight handlers have also reported sharp falls in bookings.<\/p>\n Bookings for standard 20-foot shipping containers from China to the US were 45 per cent lower than a year earlier by mid-April, according to the latest available data from container tracking service Vizion.\u00a0<\/p>\n John Denton, secretary-general of the International Chamber of Commerce, said the upheaval in China-US trade flows reflected traders \u201ckicking decisions down the road\u201d as they waited to see how quickly Washington and Beijing could reach a deal to lower tariffs.<\/p>\n A survey of ICC members conducted in more than 60 countries after Trump\u2019s April 2 \u201cliberation day\u201d tariff announcement showed expectations that trade would be permanently impacted, whatever the result of coming negotiations. <\/p>\n <\/picture><\/a><\/figure>\n<\/div>\n The cost of access to the US market would be the highest since the 1930s, Denton said. Referring to the baseline tariff for all countries, he said there was \u201calmost an acceptance that 10 per cent will be the minimum charge to access US market, whatever other uncertainties there may be\u201d.<\/p>\n Washington and Beijing showed signs of starting to feel the effects \u2014 with both sides announcing some tariff exemptions<\/a> this week on important products for their respective economies and Trump predicting the 145 per cent tariff would \u201ccome down substantially\u201d. However, China said<\/a> on Friday it was not in talks with the US.<\/p>\n As the first container shipments from China to face tariffs are due to land in the US in the coming week, freight operators said supply chains were shifting.<\/p>\n Nathan Strang, ocean freight director at US logistics\u00a0group Flexport, said companies were\u00a0waiting to ship goods\u00a0in anticipation of Washington and Beijing agreeing a deal to mitigate the levies.<\/p>\n US importers are looking to use up stockpiled inventories before importing fresh stock from China, said logistics executives. They are also holding stock in bonded warehouses where inventory can be stored duty-free with taxes paid on withdrawal, or diverting it to other nearby countries such as Canada. <\/p>\n \u201cThey\u2019re sitting on goods at origin, sitting on goods at destination,\u201d Strang said, warning that if a deal was done to cut tariffs, shipping rates would then jump sharply. <\/p>\n Hapag-Lloyd, one of the world\u2019s largest container shipping lines, said Chinese customers had cancelled roughly 30 per cent of its bookings out of China. <\/p>\n Hong Kong-listed Taiwanese container shipping company TS Lines has suspended one of its Asia to US west coast services in recent weeks. \u201cDemand is not there,\u201d one person at the group said. <\/p>\n The declines in order volumes have fed through to landings in Los Angeles, according to shipping data analysts Sea-Intelligence, which reported a surge in \u2018blank sailings\u2019, where scheduled vessels from China were being cancelled.<\/p>\n Almost 400,000 fewer containers are booked on Asia to North America routes during the four weeks from May 5 than planned \u2014 a 25 per cent drop from the amount scheduled for the same period at the start of March, before tariffs were imposed.<\/p>\n The Port of Los Angeles alone expects 20 blank sailings in May, representing more than 250,000 containers \u2014 up from six in April.<\/p>\n That is a sharp fall from this week, when arrivals were up by 56 per cent year-on-year \u2014 a sign that importers have been frontloading deliveries from other south-east Asian manufacturing hubs such as Cambodia and Vietnam that are enjoying a 90-day \u201cpause\u201d in tariffs.<\/p>\n Container prices reflected the supply chain shift, according to data from logistics hub Freightos, with a 15 per cent increase in the price of a 40-foot container from Vietnam compared with a 27 per cent fall on major China-US routes.<\/p>\n![\"Column](\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2F18001410-238b-11f0-ae7f-c1ac2dcdd725-standard.png?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1\")
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