Image credit: Bloomberg.
Companies rushed to ship goods from China’s busiest port, Shanghai, before US tariffs and the Lunar New Year holiday. Consequently, Shanghai’s port processed a record 5 million containers in January, exceeding any previous month since 2007.
Shanghai Port achieved this record after becoming the first port globally to handle over 50 million containers in a single year. Rising global demand, falling Chinese prices, and the threat of tariffs contributed to a record value of exports.
Chinese firms shipped almost $525 billion worth of goods directly to the US last year. However, companies increasingly ship products via nations like Mexico and Vietnam to the US. Therefore, President Trump’s possible tariffs on all imports could impact this trade.
The US imposed new tariffs on all goods from China after the record-breaking month. China retaliated with its own tariffs, effective Monday, though only on a small fraction of imports from the US.
Ningbo port, near Shanghai, also experienced a cargo spike, processing 59 million tons in foreign trade last month.
Trade flows slowed in late January and early February due to the Lunar New Year holiday. Some firms resumed work late last week. Official trade data, combining the first two months, will be released in early March.
President Trump called for a review of China’s compliance with a previous trade deal, with a report due April 1. This could lead to further US punitive measures.
Bloomberg Economics estimates an additional 10% levy could eliminate 40% of Chinese goods sent to the US, risking 0.9% of China’s GDP.