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Is Trump Looking In The Wrong Place?

  • By Christopher Rogers
  • · January 12, 2017
  • ·

U.S. seaborne imports ended the year with a bang, rising 9% on a year earlier with the result that total shipments for 2016 were 2.4% above those in 2015. The growth was driven by a 13% jump in imports from the EU and 11% from India. China and Hong Kong increased just 4%, suggesting the incoming administration needs to look beyond China for targets to cut imports. Among key importing industries shipments of toys – an industry dominated by China but so far ignored by the President-elect – increased the most markedly, jumping 27% on a year earlier. Automotive imports, a favorite target, did also increase by 7%, while apparel’s woes continued with a 3% contraction.

 

Considering that 2016 was supposed to be a bad year for global trade, the U.S. seaborne import data tell a different story. Shipments increased 8.9% in December on a year earlier, Panjiva data shows. This resulted in full year shipments that broke through 11 million for the first time (to 11,137,860) having increased 2.4% vs. 2015. This is the initial evidence that December’s import data – the first that will be reported under the incoming administration of President-elect Trump – could show a strong increase, as discussed in Panjiva research of January 4.

GOOD YEAR AFTER A BAD START

Source: Panjiva

Imports from China and Hong Kong underperformed, with a 4.2% increase on a year earlier in December, and just 3.5% in the fourth quarter compared to a national average of 7.4%.  The fastest growth came from the European Union (13.2% higher in December and 13.4% for the fourth quarter) and India (10.8% higher in December). This would suggest that President-elect Trump may want to consider widening his net from just China and Mexico when looking for reasons for rising U.S. imports.

TARGET EUROPE TO MAKE AMERICAN IMPORTS LESS GREAT?

Figures shown on basis of trailing three month totals to reduce seasonality in Asia data around holidays Source: Panjiva

From a product perspective the outlier was imports of toys. These jumped 26.8% on a year earlier in December having had a lackluster pre-holiday season, and is an area where Chinese suppliers – who account for three quarters of the import volumes. This may therefore be a sector that comes into trade policy focus, as outlined in Panjiva research of January 5.

The auto sector, which certainly has been a focus for the incoming administration, saw a 6.6% increase in December imports of both completed vehicles and autoparts. Imports by land also likely increased, as shown by a 18.2% increase in Mexican auto exports. Elsewhere imports of furnishings jumped 11.1% to reach a new high, which perhaps reflects robust consumer sentiment. Apparel continued to be weak, falling 2.8% in December, bringing the fourth quarter to a 4.2% decline.

SANTA FILLS HIS SACK LATE

Data for shipments segmented by HS code for furnishings (HS 9401/3), autos and parts (8703/8), apparel (6110/6204), toys (9504), steel (7304/6/7) and oil (2709) Source: Panjiva

The strong December data is not necessarily a sign of further gains to come. The month accounted for the biggest proportion of full year shipments since 2010, and also comes ahead of an the earliest lunar new year shut-down for Chinese manufacturers since 2012. It did mean, however, that the distribution of shipments during the year, and in particular the latter part of the year, was the least volatile since 2011. Whether this just reflects the demise of Hanjin Shipping during the normal September peak, or a systemic change in the seasonality of the shipping industry remains to be seen.

SMOOTHER, FOR MESSY REASONS

Chart shows proportion of full year shipments per month compared to maximum and minimum for 2010 to 2016 Source: Panjiva

 

This research was first published in the Panjiva Daily, which features global trade news and data-driven insights and is free for all Panjiva subscribers. To find out more email sales@panjiva.com.

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