Tariff war impacts US supply chains

Ocean carriers are reducing the number of sailings and freight capacity between China and the U.S., while increasing the number of sailings between the U.S. and South Asia. Not only is the volume of shipping changing but also the routing. This will have a significant impact on US exports. Here’s why: China-origin consumer goods travel transpacific to U.S. West Coast ports. But If the origin of a consumer good is Southeast Asia or South Asia, then the transit to the U.S. can be more efficient via the Indian Ocean/Suez Canal/Atlantic (as opposed to transpacific). The ships taking this route arrive at U.S. East Coast ports. Import container data shows that ocean carriers are increasingly choosing to land imported consumer goods at these ports, as they are closer to two-thirds of the U.S. population.    Thus, those import containers, once emptied, will be on the East Coast, not on the West Coast. If the ships return to Southeast Asia origins, not China; At the same time, China is feeling pain from the tariff battle. The U.S. implemented an exclusion process by which a U.S. manufacturer or supplier could seek exemption from specific tariffs we imposed on imports from China. Now China is doing the same. Chinese importers can petition the Chinese government to create an exclusion from its retaliatory measures against U.S. exports.

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