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April 30 2018

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April 30 2018 | The Journal of Commerce 33 www.joc.com Government to its tariffs on steel and aluminum that greatly reduced their overall impact, but in terms of the contain- er trade, they will have little effect, reducing the exposure of 1.2 percent of total US imports by 0.3 percent- age points. The share of imports from China that the United States is targeting was 6.6 percent or 706,872 TEU of the US import trade with China in 2017, and THE US TARIFFS on $50 billion of imports from China and Chinese re- taliation threaten roughly 887,000 TEU, or 6.6 percent of the total US container trade with China and 2.5 percent of total US container volume. With both sides pledging to negotiate, the ultimate impact of the threatened tariffs is unclear. The Trump administration on March 22 issued a number of waivers 6.6 percent or 180,098 TEU of the US export trade with China, according to an analysis of data from PIERS, a sister product of The Journal of Commerce within IHS Markit. Imports from China make up 3.1 percent of the total US im- port trade, with exports accounting for 1.4 percent of the total US export trade. The 1,300 items on which the United States is seeking to levy a 25 percent tariff could shrink or grow depending on feedback during a public comment period that runs until May 11 and a hearing on the matter May 15 at the US International Trade Com- mission. China's retaliatory tariffs would also be pegged at 25 percent. Neither country has given a deadline for the tariffs, but the situa- tion remains dynamic and fluid. The consultancy Drewry said gauging the impact of a potential trade war on container shipping was difficult, noting that much of the high-tech goods targeted by US tariffs moves via air transport rather than ocean. Rising tensions, however, are clouding the air freight outlook for 2018, despite a solid start to the year for volume and cargo yield. The rate of growth in targeted import commodities was 6.2 percent year over year in 2017, faster than the 5.8 percent increase in total US imports from China in 2017. The US exports of commodities China is targeting fell 30.3 percent in 2017, as shippers of brewing waste steered clear of the country's ongoing crack- down on waste imports. However, the top three targeted commodities that the United States exports to China surged in 2017, with No. 1 cotton up 93.1 percent to 35,960 TEU, No. 2 polysulfides up 18.2 percent to 32,563 TEU, and No. 3 soybeans up 86.6 percent to 22,285 TEU. While US exporters can find new markets, so much soy is shipped to China that any tariffs or disruption to the trade could be the difference be- tween profit and loss for soy farmers, Mike Steenhoek, executive director of the Soy Transportation Coalition told The Journal of Commerce. China is the top destination for US soy, with exports valued at $14 billion, compared with $1.5 billion to No. 2 Mexico, Steenhoek said. While acknowledging that China's demand is so great that it will most likely have no choice but to continue to purchase Battle cries Threatened US, China tariffs, though in flux, have exporters and consumers on edge By Dustin Braden 20% 18% 12% 50% Cotton, not carded or combed Polysulfides, polysulfones, and other NESOI, primary form Soybeans, whether or not broken Others Top 3 targeted US exports make up half of total export impact Source: IHS Markit © 2018 IHS Markit Share in 2017 of US exports China is targeting with tariffs Notes: NESOI = Not elsewhere specified or indicated Shutterstock.com International | Washington | Customs | Security | Regulation

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