Tariffs Are Hitting Global Supply Chains And Shipping

Tariffs are affecting supply chains and shipping big time. The point of this post is shipping matters and already the first real volley in the trade wars is hitting the shipping sector. American companies front-loaded by purchasing a large amount of goods before tariffs went into effect. This has created a situation where new orders are scarce and shipping is entering the dull-drums. 

This does not mean I'm against tariffs or Trump's attempt to alter the trade rules we have with other countries. If a country does not stand up for itself, it is not uncommon to find it is treated unfairly when it comes to trade. America has been facing trade imbalances that are not sustainable. A recent article on AdvancingTime titled; Tariffs Are A Way Of Putting A Finger On The Scale. took the stand that tariffs are simply a way to level the playing field.

It appears we will witness a whiplash in rates and activity at ports that will play out over time. This volatility will also be an issue for the trucking industry. The costs of moving products and disruptions in the distribution of parts and finished goods flow into the economy.  The far bigger story, however, which I will get to below, is the undeniable impact on China.

Sal Mercogliano, a maritime historian at Campbell University and former merchant mariner recently did a video where he discussed the impact of the tariffs set by the Trump Administration on global shipping and in US ports, with a focus on Los Angeles and New York/New Jersey. 

Supply chain and shipping are issues ripe for mainstream news manipulation. They can mislead us by taking the stand the problems are widespread, dramatic, and massive contributors to inflation and economic hardship. Yes, there will be some companies that get hard hit as this unfolds but others will profit. Overall, I do not view the Trump tariffs now hitting China as creating a major supply chain crisis like some industry and economic watchers claim.

For those of us trying to keep on top of global news, Sal Mercogliano presents in-depth, well-informed shipping information. He exercises due caution in interpreting these statistics and does not sensationalize the numbers to attract clicks and panic viewers. More on the canceled sailings can be seen by going to the Drewery canceled sailings tracker.

Clearly, there has been a steep drop in Chinese freight ship traffic to the busiest U.S. ports. Where this is being felt the most is in China where factories are shutting down and many may never reopen. Try as it might, China being an export-driven economy with a weak domestic consumer base is undergoing considerable economic difficulty. In short, this is a bigger problem for China than it is for America. 

(Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog)