The US/China trade war is seemingly far from over, although it has been overshadowed by ongoing supply chain disruptions.This is according to Bimco chief shipping analyst, Peter Sand, who predicts that the higher tariffs are not expected to change in the near future, despite the change of administration in the United States.He said huge volumes of goods were still being imported from China, despite the higher tariffs.In his latest analysis of trade between the US and China, Sand found that in the first seven months of 2021, the US trade balance with China worsened compared with the same period in 2020 – from a deficit of $162.8 billion to a deficit of $187.2 billion. “However, the first seven months of 2020 were severely impacted by the pandemic, creating an artificially low deficit. Compared with 2019, the trade balance has in fact improved in the first seven months of this year, aided by higher-valued exports.”In value, US exports to China had risen 34.7% in the first seven months of 2021 compared to 2019, said Sand, and at $72.4 billion, exports this year were 14.1% higher than in the same period of 2017, before trade-war tariffs were implemented. While total imports measured in value from China were also up from 2019, the total value of imports was down for the first seven months of the year.According to Sand, this is partly attributable to the Phase One Agreement, boosting US exports to China and repairing some of the damage done to trade between the world’s largest economies in the first years of the trade war.He said US exports to China had risen at a faster pace than those to the rest of the world. In the first seven months of this year, US exports to China were up 40.6%, almost twice the 22.2% export growth rate recorded in the same period to the rest of the world.“Despite the higher value and volumes, exports this year are still far from the commitments made in the agreement. In fact, it looks increasingly unlikely that the targets will be met by the end of the year. However, even if the agreement’s targets are not met, the higher exports from the US to China have added volumes and important tonne-mile demand to a struggling oil tanker shipping industry, while also boosting the strong dry bulk market,” said Sand.According to Raymond Fung, director of trades, Orient Overseas Container Line (OOCL), shipping lines have been under pressure to adjust capacity to cater for the changes in demand in various regions of the world since the outbreak of Covid in 2019. “As carriers we have to incorporate the ability to change demand at a moment’s notice. This might seem like a general statement, but we have had to develop the capability to speak to each and every customer no matter their size to ensure their needs are met.”
