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Jan.9, 2017

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46 THE JOURNAL OF COMMERCE www.joc.com JANUARY 9.2017 MARITIME IN PERSPECTIVE 2017 ANNUAL REVIEW & OUTLOOK & OUTLOOK & Container Shipping's Downside Risks U S containerized imports stayed on an upward trend in 2016, expanding an estimated 3.6 per- cent to a record of approximately 20.4 million 20-foot-equivalent units, on the back of subdued import prices and further gains in home sales, and despite strong headwinds that included excessive inventory levels, lower consumer spend- ing, weak manufacturing activity, and Hanjin Shipping's August collapse. Gains were seen across all sub- regional markets with the exception of Africa and Oceania. Northeast Asia con- tributed most to the import trade, adding 1.44 percentage points to growth, followed by Southeast Asia, which contributed 0.88 percentage points to g row t h. China again was the largest supplier of containerized goods to the US — by far — accounting for 46.8 percent of the total US inbound trade. That share was virtually unchanged from 2015, but down 1 percent from fi ve years ago. This slight decline in China's market share of US containerized imports may accelerate in the coming years as the incoming Trump administration begins to shape trade policy. There was no shortage of anti- China rhetoric during the campaign, with President-elect Donald Trump saying his administration would impose 35 percent tariffs on Chinese imports, while calling China an "unfair trader" and "currency manipulator." Chinese state media responded by raising the possibil- ity of countermeasures that could include restrictions of sales of Apple iPhones in China, imports of US maize and soy, and outstanding orders from Boeing. Although friction over trade and currency is likely to remain elevated in the next few years, an all-out trade war between China and the US seems unlikely as both nations have a lot to lose. Retaliatory tariffs would be far more costly for China, in balance-of-trade terms alone. Nearly 17 percent of Chinese exports, a sum representing 4 per- cent of its GDP, went to the US in 2014. In contrast, less than 8 percent of US exports, or less than 1 percent of its GDP, went to China. In terms of containerized trade, however, the cost would be relatively equal. China shipped about 24 percent of its containerized exports measured in TEUs to the US in 2015, while the US shipped the same percentage of its exports to China. The president-elect's pledge to walk away from the Trans-Pacific Partnership and renegotiate the North American Free Trade Agreement in his fi rst 100 days of offi ce also imply grave ramifi cations. Ratifi cation of the MARIO O. MORENO

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