First signs of coronavirus’s drag as U.S. imports fall for sixth month — Panjiva
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First signs of coronavirus’s drag as U.S. imports fall for sixth month

China 2393 Cons. Discr. - Apparel 318 Cons. Discr. - Durables 248 Coronavirus 256 European Union 574 Industrials - Capital Goods 395 Materials - Chemicals 152 Materials - Metals/Mining 596 Metals - Steel 422 Singapore 58 Trade Balance 818 U.S. 4229 Vietnam 250

U.S. seaborne imports fell for a sixth straight month in February, Panjiva data shows, with a 7.5% year over year slide. That followed a 3.5% dip in January and was also an acceleration from the 5.3% slide seen in the prior three months overall. There was a similar decline of 4.5% year over year in containerized freight imports in February.

IMPORT DOWNTURN SUSTAINED FOR HALF-A-YEAR

Chart shows change in U.S. seaborne imports. Source: Panjiva

Unsurprisingly, the drop was largely down to a slide in imports from China including Hong Kong which fell by 21.0% year over year in February. While the timing of the lunar new year can distort figures, the 13.5% drop in shipments in January and February combined may indicate the first impact of COVID-19 coronavirus disruptions on shipping. Worse may be yet to follow given the logistics industry has only returned to normal in early March, as outlined in Panjiva’s research of March 6.

Imports from Asia excluding China continued to partly offset the loss of shipments from China with a 6.2% year over year rise in February. The was led by a 24.7% surge in imports from Singapore, a 28.3% rise in shipments from Vietnam, and an 11.2% increase in imports from India. The latter marks a pickup from the low single digit increases seen in Q4 and January.

Imports from the European Union have continued to decline with a 3.7% fall following a 7.1% slide in January and a 0.5% slip in Q4. That may reflect the impact of earlier tariffs on EU imports in relation to the ongoing aerospace industry subsidy spat between the two. Ongoing negotiations toward a wider trade deal are unlikely to change that situation in the short term.

CHINA LEADS EXPORT DROP, EU ALSO IN DECLINE

Chart segments change in U.S. seaborne imports by origin between China, Asia ex-China and the EU. Source: Panjiva

There also appears to be a slowdown in the underlying demand for consumer goods. Imports of furniture fell by 9.3% year over year in February after being unchanged a month earlier while imports of apparel fell for a fifth straight month by 13.3%. Both are subject to section 301 duties on imports from China. The tariffs may have raised costs and cut spending power, though the rate of tariffs on apparel fell to 7.5% from 15.0% in mid-February under the phase 1 trade deal.

Industrial demand may also have continued to be weak with imports of steel having fallen by 16.0%, machinery and electronics down by 10.4% and chemicals decreasing by 7.3%. All three remain subject to 25% duties on Chinese imports. 

With the latest ISM survey showing a drop in import expectations to the lowest since at least 2010. When taken alongside the prospect of COVID-19 disruptions outside China it seems unlikely that there’ll be a recovery in U.S. imports in March.

LOWER DEMAND FOR CONSUMER AND INDUSTRIAL PRODUCTS

Chart segments change in U.S. seaborne imports by product (HS-2 and HS-4). Source: Panjiva

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