As Peter Sand is Chief Shipping Analyst at BIMCO says, despite the disruption this year, the effects of the tariffs remain clear and the long-term shifts that were already occurring before the pandemic are unlikely to be reversed. One of the most obvious impacts is the shift in the Asian manufacturing landscape. Manufacturing of many goods now facing tariffs when imported by the US from China, has moved out of China for manufacturing in neighbouring countries.
The shock of the pandemic has caused temporary change, but the changes that have occurred in response to the tariffs will stick around through the pandemic
What is more, during the first seven months of 2020, US containerised imports from Asia excluding China exceeded imports from China. If this continues in the remaining five months of the year, 2020 will be the first year ever to see this trend.
However, Mr. Sand says that recent months blurs this picture as China has regained the top spot over its neighbouring countries. After falling sharply in March, containerised imports from China have recovered and are in July just 61,667 below levels in July 2019.
On the other hand, imports from the rest of Asia did not experience the same sudden drop as imports from China but are also taking longer to return to pre-pandemic levels. These different timings of lockdown and pace of reopening means that in Q1, the US imported 3.0m tonnes less (-12.9%) from China than from the rest of Asia, whereas in Q2, China was ahead by 1.0m tonnes (+8.6%).
The trend of a narrowing of the gap between China and the rest of Asia really took hold in 2019, notes BIMCO, when the difference in imports narrowed to 4.7m tonnes, a marked fall from the 20.4m tonnes in 2018. This changing pattern is testament to the shift in manufacturing that has been occurring in Asia for some time. The shift is not only driven by the trade war but also companies looking to move away from China as production costs have increased in comparison with many of its neighbours.
It also demonstrates the lack of proper growth in 2019 compared to 2018 in Chinese exports - one of the main drivers of global trade.