Latest news with #China-to-US
Yahoo
6 days ago
- Business
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China's Cosco Eyes Stake in MSC-BlackRock Panama Ports Deal
Cosco Shipping could potentially be a new partner in the deal that would transfer two ports on the sides of the Panama Canal to Mediterranean Shipping Company (MSC) and BlackRock. China's largest container shipping company is one of multiple Chinese state-backed companies that is in discussion to invest in the consortium to buy more than 40 ports from port operator CK Hutchison Holdings, according to a report from Bloomberg. More from Sourcing Journal Apparel Tariffs Climbed to Historic Highs in April China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? Trump Touts Higher Duty Rate for Chinese Imports Under New Trade Deal The addition of Chinese investors emerged as a potential option as the current iteration of the deal has hit regulatory roadblocks in the country amid a power struggle with the U.S. over influence on the trade artery. The Panama Canal Authority acknowledged the sale could put the waterway's neutrality at risk. China's antitrust body is currently probing the deal after reports that President Xi Jinping was unhappy with the port sale by Hong Kong-based CK Hutchison. It is unclear what stake Cosco would have if a port deal took place, or what ports it would gain control over. The deal itself followed President Donald Trump's rhetoric that the U.S. should 'take back' the canal, partly due to Washington's worries that Hutchison's ownership of the adjacent ports poses national security concerns for U.S. trade interests. But according to the Bloomberg report, the idea to include Chinese investors in the MSC/BlackRock consortium came to be after high-stakes tariff negotiations in Switzerland concluded last month between Chinese and U.S. officials. Cosco's—or any other Chinese company's—involvement could still sound off some bells due to their state-owned status, according to analysis by Drewry provided after a webinar on the deal held Thursday. 'This will be problematic in many jurisdictions, for example Cosco was limited to taking only a 24.99 percent stake in Container Terminal Tollerort in Hamburg' in 2021, Drewry said. A previous Financial Times report from early June indicates that Hutchison is also considering exploring a sale of some or all of its remaining 10 ports in greater China in a separate deal as a way to appease the U.S. and China. 'We would expect that if sold that both Cosco Shipping Ports and China Merchants Ports would be likely candidates, but there may be competition concerns here given existing strength of these companies in the Chinese port sector,' according to Drewry. A 145-day period for exclusive talks between Hutchison and the consortium ends in late July. The parties have already missed an initial goal of signing an agreement on the Panama part of the deal by early April. If a deal goes through as initially planned, it would cost $22.8 billion for the ports to switch hands, with CK Hutchison netting more than $19 billion in cash from the transaction. MSC would be the lead investor in this acquisition through its Terminal Investment Limited (TIL) terminal operator subsidiary, various reports have said. The ocean freight giant is setting itself up as the dominant figure across container shipping and port terminals if a tentative deal to acquire the Panama ports clears approval. But that remains a big if—and a resolution isn't going to come quick. 'We're going to be talking about this deal for at least a year, if not longer, while it makes its way through regulatory approvals,' said Eleanor Hadland, senior associate of ports and terminals at Drewry, during the webinar. An approved deal would thrust MSC into the position of largest global terminal operator worldwide, up from its rank of seventh in 2023, Drewry said. When including the 43 ports from Hutchison, which comprise 199 berths in 23 countries, MSC would have a terminal capacity of 196 million 20-foot equivalent units (TEUs), giving the firm equity interest in more than 15 percent of global capacity. 'While it's unlikely that MSC/TIL will be allowed to take over all of Hutchison's assets due to market concentration concerns from the relevant competition authorities, it's also unlikely that this would make a large enough dent in the combined portfolio to affect this final outcome of going up to first place in the rankings,' said Eirik Hooper, senior associate of ports and terminals at Drewry. The MSC shakeup would spark an uptrend of 'hybrid' global terminal operators (GTOs), Hooper pointed out. For the first time, three hybrid operators would be represented among the top five GTOs, including MSC, Cosco (fourth) and Maersk (fifth) through its APM Terminals division. Hooper acknowledged the risks of consolidation within the industry, namely for liners without terminal-operating capacity, noting that the larger ports will typically see greater alignment between ownership of the terminal and the customer base of the terminal. However, these carriers can still reap benefits in a hybrid-dominated environment, he said. 'In small-medium ports, even where terminals are operated by a hybrid GTO, they are catering to all liners calling at the port. While this may sound less than ideal, terminal service agreements specify the berth windows, productivity and price therefore minimizing the risk of 'preferential treatment' for aligned carriers,' Hooper said. 'In some markets, the investment by a hybrid operator may be motivated to improve service levels for their own shipping services, but equipment upgrades and service level improvements will benefit all users.' Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Apparel Tariffs Climbed to Historic Highs in April
Tariff rates on apparel imported from across the globe spiked in April, and that upward trend seems poised to continue amid protracted negotiations between the United States and its preeminent trading partners, according to Dr. Sheng Lu. The University of Delaware professor of fashion and apparel studies assessed the U.S. International Trade Commission's (USITC) recently released data from April, which showed that as a result of President Donald Trump's reciprocal tariffs, announced on 'Liberation Day' on April 2, the average tariff rate for U.S. apparel imports reached 20.1 percent. More from Sourcing Journal Vietnam's Ready For High Stakes US Trade Talks To Avoid Steep Tariffs RH Continues to Mitigate Tariff Pressure; Says Revenues Will Take Short-term Hit China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? That's a 13.8-percent increase from the same period a year prior and a 14.7-percent jump from January of this year, and the highest average duty rate on clothing imports seen in decades. The tax hikes were predictably particularly acute for apparel imported from China, which has seen numerous duty rate hikes since February, including an executive order setting tariffs at a whopping 145 percent for products across the board—a figure that' has fluctuated throughout a series of trade negotiations. In April, the average tariff rate for clothing imported from the sourcing superpower reached an unprecedented 55 percent, up from 37 percent in March and 22 percent in January. The data was skewed by the fact that many importers frontloaded orders to hit open waters before the steepest tariffs took effect, Lu said. China was far from the only sourcing locale that faced higher duties, though it is the most prolific producer of apparel. Removing China from the equation revealed an average tariff rate for apparel imports from other countries totaling 15.2 percent in April, Lu found. Though the rate was higher than the 12 percent to 13 percent seen in early 2025 before Trump took office, it was significantly more modest than the theoretical 10-percent universal baseline tariff increase announced by the administration. He told Sourcing Journal that average tariff rates for U.S. apparel imports from leading Asian suppliers like Vietnam, Bangladesh, and Cambodia followed similar patterns—higher tariffs, but well below a 10-percent increase. 'Similar to China's case, it appears that U.S. apparel imports from other countries in April 2025 included a significant proportion of products that were exempt from reciprocal tariffs because they were loaded onto a vesselearly enough,' Lu said. April's data illuminates some notable trends, chief among them, the quick-thinking actions taken by importers to frontload orders. But within the context of day-to-day evolutions in trade policy perpetuated by the Trump administration, April feels like lightyears, not months, in the past. And dealmaking with more than a dozen of the nation's prominent trading partners is still underway ahead of the expiration of the pause on reciprocal duties on July 9—a deadline the administration now says could be extended. This week, the president took to Truth Social to announce a new 55-percent tariff rate for China-made goods—the result of two days of trade negotiations between U.S. and China officials in London. While the president was quick to take a digital victory lap, hailing the deal as 'GREAT' on Thursday, neither head of state has officially ratified the terms. The trade truce won't 'help much in reducing market uncertainty,' Lu believes. 'Not only are the details of the agreement yet to be announced, but the nature of the deal, the pending legal case against Trump administration's imposition of [International Emergency Economic Powers Act] tariffs, and the pending tariff rates affecting U.S. apparel imports from other sources also contribute to this uncertainty,' he said. In other words, U.S. brands and retailers are still in a holding pattern, unwilling to make major decisions that could upend their global supply chains. But should the 55-percent rate on China imports stick, Lu believes American firms 'will further increase their sourcing volume from other leading Asian suppliers, particularly other leading apparel suppliers in Asia that are still subject to a relatively lower tariff rate, such as Vietnam, Bangladesh, and India.' This is a pattern that's already emerged over the past few months as China has been 'singled out' by the president, facing a much higher tariff burden than other Asian nations. Apparel imports from China fell in April by 13.3 percent as a result of the heavy duties, while imports from Vietnam (up 23.4 percent), Bangladesh (up 37.8 percent), Cambodia (up 38.6 percent), Pakistan (up 25.7 percent) and Sri Lanka (up 26.4 percent) positively 'surged,' Lu said. That doesn't necessarily mean Trump's plan to rebalance the trade deficit with China is working, though.'It should be noted that many apparel exports from these Asian countries may come from factories owned by Chinese investors,' Lu explained. 'It will also become increasingly common for Chinese garment factories to become 'super-vendors' with production capabilities in multiple countries.' In other words, China's reach and influence may grow as it adapts to increasingly prohibitive trade constraints levied by the U.S. It remains 'highly uncertain' which countries will be among the first to reach trade deals with the Trump administration, Lu said. 'From the apparel industry's perspective, a deal with leading Asian suppliers, including Vietnam, Bangladesh, India, and Cambodia, as well as CAFTA-DR members, would be the priority,' he added. The administration has indicated that talks with some of these nations, including India and Vietnam, have been ongoing. U.S. fashion firms are understandably itching for a fuller picture of what tariff rates they'll face in the next few months, never mind the coming years. In Lu's estimation, given the only two trade deals that have been worked out thus far, 'the chances that U.S. fashion companies would pay a lower tariff rate than they currently do are quite low.' China's 55-percent rate represents a massive burden for those importing from the country, and the recently announced trade deal with the United Kingdom leaves importers to face a 10-percent duty rate. According to Lu, 'it is more likely than not that the final 'reciprocal tariff' rate reached between the U.S. and a trading partner will be 10 percent or even higher.' Because the president is laser-focused on rebalancing trade, medium-sized major economies that could potentially import more American made products could be well-positioned to make more favorable deals with Washington—and sooner. Lu's assessment of the April USITC data uncovered a surprising downside—namely, for America's nearshore neighbors. 'It is interesting to note that the reciprocal tariff resulted in the most significant increase in tariff rates on U.S. apparel imports from CAFTA-DR members,' he said, referring to the Dominican Republic-Central America Free Trade Agreement, which encompasses countries including Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. While imports from these nations are presumably duty-free under the trade agreement, the average tariff rate paid on apparel imports hit 6.7 percent in April. Lu said that's because the short shipping distance between Central America and the U.S. actually worked to their disadvantage. 'Due to the short distance between the U.S. and CAFTA-DR members, there [was] limited flexibility for U.S. fashion companies to utilize the timing of shipping to avoid paying tariffs,' he said. Lu broke it down this way: 'Except for Mexico and China, U.S. apparel imports from all sources in April 2025 should face an additional 10-percent reciprocal tariff on top of the existing MFN tariff rate. However, the increase in tariff rates was actually much more modest (i.e., only about a 2-3 percentage point increase instead of 10 percent) for U.S. apparel imports from most Asian countries, as many imports were loaded onto vessels early enough to qualify for tariff exemption.' Only apparel imports from CAFTA-DR saw an increase in tariff rate as high as 6.7 percent in April, 'partially because, with transit times of days, not weeks, orders had to be placed after tariff announcements, forcing U.S. fashion companies to absorb the increased tariff rate,' Lu said. These countries also have a more limited ability to fulfill new orders on short notice, unlike their Asian counterparts. There's no evidence that Trump's tariff regime has benefited nearshore countries in the Western Hemisphere at all, Lu said. In fact, CAFTA-DR nations accounted for just 8.8 percent of clothing imports from January through April, down from 10.3 percent during the same period last year. Of course, all this could change with the release of May's data—and with the continual shakeups in sourcing that will most certainly result as the administration solidifies trade deals in the coming weeks. 'Overall, it remains uncertain how the U.S. apparel tariff rates will continue to evolve in response to Trump's shifting tariff policy,' Lu said. 'It appears that the trade volume and timing of shipment will be highly sensitive to short-term tariff rate changes, whereas adjusting sourcing bases and product structures will be a consideration for U.S. fashion companies in the medium- to long-term.'
Yahoo
6 days ago
- Business
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Port of LA Imports Dip 9% in May After Tariff Shock
The Port of Los Angeles handled 9 percent fewer imports in May than last year as inbound cargo volumes into the California gateway were hampered by tariffs implemented by the Trump administration in April. With fewer ships entering the port due to mass blank sailings in the weeks after the tariffs were imposed, the L.A. port brought in 355,950 20-foot equivalent units (TEUs) of loaded imports. On a month-over-month basis, these import numbers declined 19 percent from April, despite May volumes typically being stronger during most years as the traditional peak shipping season approaches. More from Sourcing Journal China Retail Sales Saw May Bump in Spite of Tariff Firestorm Apparel Tariffs Climbed to Historic Highs in April China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? The import total was 25 percent less than what the port forecasted on April 1, a day ahead of President Donald Trump's 'Liberation Day' tariffs that threw the supply chain out of sorts, namely on the trans-Pacific trade lane out of China. The duty rate on imports from China escalated as high as 145 percent before the countries agreed to a 90-day pause in May. Earlier this month, the countries were able to settle on a 55 percent tariff on Chinese goods, along with China keeping a 10 percent duty on American exports. After the initial shock of the 145 percent tariff, 'many importers just simply slammed on the brakes and halted any movement of cargo,' said Port of Los Angeles executive director Gene Seroka during a Friday briefing. For the month, 17 canceled sailings amounted to 225,000 TEUs that didn't show up at the port, according to Seroka. He noted that truckers hauling four or five containers prior to the Liberation Day announcement are currently hauling two or three loads. And for every two longshore workers reporting to the hiring hall in late May, one left without work, he said. 'It's very slow here seasonally, as we've already blown past summer fashion and are looking forward now to back-to-school and Halloween before the all-important year-end holidays,' Seroka said. 'Cargo for those micro seasons needs to be here on the ground right now. I don't necessarily see that in inventory levels.' The port director predicted there would likely be higher prices and fewer selections for both the back-to-school and Halloween seasons. 'We will see a little bit of a peak season in the month of July trying to get ready for the Christmas and year-end holiday season,' Seroka said. 'But again, retailers are not telling me that they're boosting inventory levels to have wide selections on products beginning that Thanksgiving week and running to the end of the year.' Ernie Tedeschi, director of economics at The Budget Lab at Yale, said during the briefing that the tariffs would raise average prices by 1.5 percent, which would cut purchasing power of nearly $2,500 per household per year. But not all tariffs are made equal, he warns. 'Products that Americans are more likely to import are going to be pinched much more than other products. In particular, products like leather goods, things like shoes and handbags, products like apparel and consumer electronics—we believe will all see double-digit price increases in the short run over the next year or two,' Tedeschi said. According to The Budget Lab's estimates, leather products could see price increases of 30 percent, while apparel's price tag would jump 28 percent. Textiles could see a price hike of 15 percent, Tedeschi said. In April, apparel imports already saw a 20.1 percent tariff rate worldwide, according to U.S. International Trade Commission data. Seroka again downplayed any potential cargo surge that analysts have expected would flood the Ports of Los Angeles and Long Beach in June and July, pointing to recent Global Port Tracker projections. During the summer months of June, July and August, U.S. ports are expected to see inbound cargo declines of 6.2 percent, 8.1 percent and 14.7 percent, respectively. During the Friday briefing, Seroka said there were 12 ships at the L.A. port, 'which is a good number for this time of year' and 'one of the few double-digit ship days we've had in weeks.' Additionally, he highlighted upcoming import projections over the next two weeks of 122,000 and 124,000 TEUs, both figures of which he said 'are pretty average for where we should be.' Loaded exports at the Port of Los Angeles totaled 120,196 TEUs, a 5 percent drop from 2024. The port processed 240,472 empty container units, 2 percent more than last year. Across the board, the port handled 716,619 TEUs in May, 5 percent less than last year. Coincidentally, last month marks the first year-over-year decline in throughput since the year-ago month. 'There's less than 30 percent of the cargo on the docks today than was at the peak during Covid,' said Seroka. 'We got plenty of room to manage the cargo.' After five months in 2025, the Port of Los Angeles has handled 4,063,472 TEUs, 4 percent more than the same period in 2024.
Yahoo
13-06-2025
- Business
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Trump Touts Higher Duty Rate for Chinese Imports Under New Trade Deal
Hours after his cabinet announced that the United States would resume its previously agreed upon trade truce with China, President Donald Trump stoked confusion by revealing a new tariff rate of 55 percent for the sourcing superpower. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, along with U.S. Trade Representative Ambassador Jamieson Greer, traveled to London this week to sit down with Chinese trade officials following weeks of trade tensions and the crumbling of a provisional agreement solidified in Switzerland in mid-May. More from Sourcing Journal China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? Trump Likely to Extend Tariff Pause as Negotiations Take Shape, Treasury Secretary Says China and US Return to Terms of May Trade Truce At the end of negotiations on Tuesday, Lutnick indicated that both sides had agreed to 'implement the Geneva consensus' upon approval from Trump and Chinese President Xi Jinping. That deal centered on the deferral of reciprocal duties—lowered on the U.S. side to 30 percent and China's side to 10 percent—for three months. But by Wednesday morning, Trump had Truthed new information about the deal, saying that China will now pay a 55-percent duty rate, while the U.S. will still be subject to 10-percent tariffs on any goods imported into China. An all-caps missive said the deal with China was done, though subject to final approval by Xi and himself. 'RELATIONSHIP IS EXCELLENT!' he wrote. The president did not elucidate the reasoning for the 55-percent rate, which appears on its face to be a a 25-percent increase from the May agreement. But a White House spokesperson, who spoke to The Guardian anonymously, said the rate includes Trump's 10-percent universal baseline tariffs, a previous 20-percent punitive duty for fentanyl trafficking and an existing 25-percent tariff on China-made goods. 'A reported 55 percent tariff on our largest supplier of American apparel and footwear, stacked on top of already high MFN and Section 301 rates is not a win for America,' Steve Lamar, president and CEO of the American Apparel and Footwear Association, said in a statement. 'We're closely watching for more details, but the reality is this: nearly all clothes and shoes sold in the U.S. are now subject to elevated tariff rates,' he added. 'These costs will hit American families hard especially as they get ready for back-to-school shopping and the holiday seasons. New trade deals that bring lower tariffs can't come soon enough.' At a budget meeting with the House Ways and Means Committee on Wednesday, Secretary Bessent seemed to hint that the China deal may be shakier than the president indicated in his post on Truth Social. 'China has a singular opportunity to stabilize its economy by shifting away from excess production towards greater consumption. But the country needs to be a reliable partner in trade negotiations,' he told the Committee. 'If China will course-correct by upholding its end of the initial trade agreement we outlined in Geneva last month, then a big, beautiful rebalancing of the world's two largest economies is possible.' Footwear Distributors and Retailers of America senior vice president Andy Polk told Sourcing Journal that he believes this week's trade talks represent 'more political marketing than anything else.' 'It is positive that high level talks continue in hopes of getting us closer to a tariff end-game,' he said. 'However, there doesn't seem to be anything rally new coming out of these talks, just a climb down from threats.' Calling the president's tariff calculations 'very confusing,' Polk said he believes the 55-percent rate includes the Section 301 duties from his first term, the 20-percent fentanyl-related tariffs and the 10-percent baseline duties for all trade partners, among others. 'It is not a new tariff rate he is adding, it just seems to be fuzzy tariff math on his part.''Perhaps these steps forward will continue to unlock other issues to reduce this trade impasse, but I am not sure they are tackling the big items in a speed we need,' Polk said. 'We need a real deal that reduces tariffs back to reasonable levels quickly, and one that stabilizes them so shoe companies aren't jolted around constantly.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-06-2025
- Business
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Trump Likely to Extend Tariff Pause as Negotiations Take Shape, Treasury Secretary Says
U.S. Treasury Secretary Scott Bessent said it's 'highly likely' that President Donald Trump will extend his July 9 reciprocal tariff deadline to continue negotiations with trade partners. Following two days of discussions in London with Chinese officials which resulted in a patched-up trade truce, Bessent testified in front of the House Ways and Means Committee on Wednesday, telling members of Congress that the administration is 'working toward deals' with '18 important trading partners' or blocs, in the case of the European Union. More from Sourcing Journal China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? DHL Makes $570 Million Splash in the Middle East Trump Touts Higher Duty Rate for Chinese Imports Under New Trade Deal Those deals may take more time to complete, Bessent hinted, saying that countries that are 'negotiating in good faith' could see extensions on the tariff deadline. 'If someone is not negotiating, then we will not,' he added. Just one month remains until the double-digit 'Liberation Day' duties that the president announced on April 2 will go into effect. With negotiations between the Washington and Beijing reaching an apparent consensus, Commerce Secretary Howard Lutnick said trade-focused members of Trump's team, including himself, Bessent, and U.S. Trade Representative (USTR) Ambassador Jamieson Greer, will now be focused on other deals. 'Our teams are moving them forward… we're going to be focused starting today,' he said during an interview on CNBC, noting that the U.S. is in 'good shape with a lot of countries' and could see 'deal after deal' as soon as next week. 'We've got lots of them in the hopper. We just want to make sure they're the best deal we possibly can make. We don't want to rush,' he said. Lutnick confirmed that dealmaking with the E.U. has been tense. 'Europe was more than thorny,' he told the news outlet, saying, 'they just weren't really engaging.' In late May, Trump threatened the E.U. with sweeping 50-percent tariffs—significantly higher than the 20 percent announced in April—saying leaders had been 'difficult to deal with' and that the negotiations were 'going nowhere.' The president accused the trade bloc of maintaining high trade barriers and value-added taxes (VAT) on American goods, among other complaints. At the time, he said the heightened duty rate would help address the trade deficit between Europe and the U.S., which totaled $235 billion in 2024, according to USTR data. Lutnick echoed Trump's sentiments on Wednesday, telling CNBC that the sheer breadth of the negotiations, which will result in trade rules that apply to 27 European countries, makes it 'tough' to come to a resolution. Within the scope of the administration's trade deal agenda, 'Europe will be probably the very, very end,' he said. Lutnick also commented on recent legal setbacks that the president's tariff regime has suffered, referencing a ruling by a Court of International Trade that the duties, applied under the International Emergency Economic Powers Act (IEEPA), were illegal. A federal appeals court granted a stay on that decision as it reviews the cases brought against the president, and the tariffs are allowed to move forward—for now. The Commerce Secretary said 'ultimately, it's not going to matter' what the courts rule because the president has a number of executive authorities and avenues to pursue to execute his tariff plan.
