Thursday, December 19, 2019

A Light Switch Demonstrates the Evolution of New US Import Trade Levels from China

Christmas Tree Lighting Sets Show Changing Patterns
Shipping News Feature

US – Ship owners representatives BIMCO have examined an interesting trend this week taking a look at one specific item at this particularly busy time of the year for many. The Christmas trade of course builds up for the maritime sector in the longer term, about a ten month window for imports, and the US this year saw an aptly put changing pattern in Christmas lights.

During 2019 up to September (by which time imports for Christmas have dropped away) the US imported 147 million Christmas tree lighting sets, no major change there then. The difference being over 50% came from Cambodia, not the usual Chinese imports.

In the past only 13% of these goods emanated from Cambodia but the lights are one of the thousands of commodities which have been involved in the trade war. Imports from China of these lights have faced tariffs since September 2018. This has led to imports from China falling dramatically, from 140 million to just 27 million christmas tree lighting sets in the first ten months of the year, with its share of total exports dropping from 80% in 2018 to just under 19%.

Rising exports from Cambodia, as well as other neighbouring countries, have however not been enough to fully compensate for the drop in exports from China. Total imports by the US have therefore fallen to 147 million sets in the first ten months of 2019, down from 189 million in the same period of 2018.

The changing patterns in US Christmas tree light imports are reflected in the big picture, with total US containerised imports from Asia managing to grow year-on-year despite a drop in imports from China, as manufacturing is re-shuffled in the region.

These changes across Asia are having effects on societal behaviours, as one country’s fortunes rise, so this has a direct effect on its neighbours. In Thailand for example there has been a steady rise in Burmese workers entering the country and working for wages below that of the indigenous people.

The effect on shipping can also be quite marked. With Chinese exports falling away whilst other countries benefit from the trade vacuum, this has a direct effect on port calls, with increased tonnages from ports which were formerly not so significant.

As this unpredictable president faces impeachment it will be interesting to see if China can recover lost trade, or whether new suppliers are considered generally advantageous to US importers, and much will depend on the quality of ocean freight services they can utilise.