Trump could not bear it and exempted some of the reciprocal tariffs
According to Reuters news on April 12, Trump said that he would release details of the U.S. government's tariff exemptions in the semiconductor field on Monday. Previously, the US Customs and Border Protection on the evening of the 11th low-key amendment to the tax code, exempt about 20 products including smart phones, computers, memory chips and some semiconductor manufacturing equipment, including import tax rates, exempt unspecified countries, the current exemption period and impact is not clear.
Maersk warned that the drop in container liner business bookings and the "surcharge" Trump may impose on "Chinese ships" coming into effect next week will lead to a massive restructuring of North American liner services, which will take months to resolve, and the future port or congestion, freight rates or soaring.
Such tariffs are tantamount to "cutting off most trade between China and the United States."
Alan Murphy, founder and chief executive of maritime consultancy Sea-Intelligence, said: "At the moment, Chinese furniture producers are unable to secure orders from US importers, and the same is happening to the toy, clothing, footwear and sports equipment industries."
"Southeast Asia had previously faced a similar situation, but orders have gradually recovered after the 90-day tariff moratorium ended." Brian Bourke, chief commercial officer at SEKO Logistics, said that despite this, container orders from China continue to be cancelled.
Alan Baer, chief executive of OL USA, a logistics company, admits: "Almost everything involving China is at a standstill right now."
"The Trump administration has imposed an overall tariff of up to 145% on Chinese imports, a move that will undoubtedly severely impede trade between China and the United States." Erica York, vice president and economist at The Tax Foundation's Center for Federal Tax Policy, put it this way on CNBC's "The Exchange" on April 10: "While there may be some irreplaceable goods and companies have to bear the cost themselves, in most cases this effectively amounts to a direct cut off of trade."
In the past week, it has become increasingly clear that China will remain the main target of the Trump administration's tariffs, after giving some other trading partners a 90-day reprieve. The policy sends a clear signal that the sustainability of low-margin goods produced in China is facing challenges. While part of the reason tech products are exempt from tariffs can be attributed to supply chain characteristics, it also highlights which areas will be hardest hit.
Murphy, founder and CEO of Sea-Intelligence, further explains: "Sourcing for higher-margin, higher-tech products such as electronics, machinery, medical devices and pharmaceuticals is not easy because it takes time and money to set up high-tech manufacturing plants." He said that before the technology products were exempted from tariffs, manufacturers of these products had been actively looking for alternative procured parts, while mainly considering reducing inventories in the US market in the short term. A concerted effort is under way to shift capacity to Southeast Asia, mainly Vietnam or India, while cutting prices to Europe to maintain production, or shutting down production lines outright, are also options under consideration.
"Beware of Trump, no one is actively considering moving production capacity to the US"
Stephen Lamar, CEO of the American Apparel and Footwear Association, recently pointed out that the current abrupt policy changes and high tariffs are disrupting supply chains with unprecedented force since the COVID-19 pandemic. Many companies have been forced to cancel orders because the United States has imposed exorbitant tariffs on imports from China. Frequent policy changes make it difficult to estimate the cost of new tariffs before goods arrive at ports, and high rates make corporate bills difficult to bear, which is especially deadly for small businesses. For small businesses that lack alternative sourcing channels, a sharp drop in orders will directly lead to lost sales and product shortages. Lamar stressed that the current trade war on Chinese imports to the United States must be extended, otherwise it will cause irreparable losses.
Shipping giant Maersk also warned of declining bookings in the container liner business, which, combined with the Trump administration's imposition of "surcharges" on "Chinese vessels" likely to come into effect next week, would lead to a "massive restructuring of all North American liner services." "It will take months to resolve this mess and there will be port congestion and soaring freight rates in the coming months," Maersk wrote in a letter to customers.
Alan Murphy, founder and CEO of maritime consultancy Sea-Intelligence, said none of the Chinese manufacturers his company has contacted are currently actively considering moving production capacity to the United States, largely because of doubts about the Trump administration's ultimate goals. Murphy pointed out that the Trump administration's true intentions are difficult to predict and worrisome. If tariffs are only a negotiating tactic, no one will want to make large investments in American production; If the administration is serious about reindustrializing the United States, it needs to be clear about its long-term tariff plan, not vague. Frequent changes in tariff policies add to market uncertainty. At present, the suspension of freight processing has become an effective way to mitigate the impact of tariffs, and logistics providers can provide bonded warehousing services and use delayed transit transportation methods such as foreign trade zones to temporarily defer trade tariffs.
Karsten Kildahl, Maersk's chief commercial officer, added: "The current situation is unprecedented." He revealed that many shippers are adopting a "wait and see" attitude. In a recent warning letter to customers, Maersk wrote that until the situation is clear, customers will carefully control inventory levels and continue to explore options to enhance the resilience of the supply chain. Maersk said "additional flexibility" in its global network of warehouses, distribution centres, port terminals, ships and freighters was at the heart of most of its current customers.
Maersk warned that the drop in container liner business bookings and the "surcharge" Trump may impose on "Chinese ships" coming into effect next week will lead to a massive restructuring of North American liner services, which will take months to resolve, and the future port or congestion, freight rates or soaring.
Such tariffs are tantamount to "cutting off most trade between China and the United States."
Alan Murphy, founder and chief executive of maritime consultancy Sea-Intelligence, said: "At the moment, Chinese furniture producers are unable to secure orders from US importers, and the same is happening to the toy, clothing, footwear and sports equipment industries."
"Southeast Asia had previously faced a similar situation, but orders have gradually recovered after the 90-day tariff moratorium ended." Brian Bourke, chief commercial officer at SEKO Logistics, said that despite this, container orders from China continue to be cancelled.
Alan Baer, chief executive of OL USA, a logistics company, admits: "Almost everything involving China is at a standstill right now."
"The Trump administration has imposed an overall tariff of up to 145% on Chinese imports, a move that will undoubtedly severely impede trade between China and the United States." Erica York, vice president and economist at The Tax Foundation's Center for Federal Tax Policy, put it this way on CNBC's "The Exchange" on April 10: "While there may be some irreplaceable goods and companies have to bear the cost themselves, in most cases this effectively amounts to a direct cut off of trade."
In the past week, it has become increasingly clear that China will remain the main target of the Trump administration's tariffs, after giving some other trading partners a 90-day reprieve. The policy sends a clear signal that the sustainability of low-margin goods produced in China is facing challenges. While part of the reason tech products are exempt from tariffs can be attributed to supply chain characteristics, it also highlights which areas will be hardest hit.
Murphy, founder and CEO of Sea-Intelligence, further explains: "Sourcing for higher-margin, higher-tech products such as electronics, machinery, medical devices and pharmaceuticals is not easy because it takes time and money to set up high-tech manufacturing plants." He said that before the technology products were exempted from tariffs, manufacturers of these products had been actively looking for alternative procured parts, while mainly considering reducing inventories in the US market in the short term. A concerted effort is under way to shift capacity to Southeast Asia, mainly Vietnam or India, while cutting prices to Europe to maintain production, or shutting down production lines outright, are also options under consideration.
"Beware of Trump, no one is actively considering moving production capacity to the US"
Stephen Lamar, CEO of the American Apparel and Footwear Association, recently pointed out that the current abrupt policy changes and high tariffs are disrupting supply chains with unprecedented force since the COVID-19 pandemic. Many companies have been forced to cancel orders because the United States has imposed exorbitant tariffs on imports from China. Frequent policy changes make it difficult to estimate the cost of new tariffs before goods arrive at ports, and high rates make corporate bills difficult to bear, which is especially deadly for small businesses. For small businesses that lack alternative sourcing channels, a sharp drop in orders will directly lead to lost sales and product shortages. Lamar stressed that the current trade war on Chinese imports to the United States must be extended, otherwise it will cause irreparable losses.
Shipping giant Maersk also warned of declining bookings in the container liner business, which, combined with the Trump administration's imposition of "surcharges" on "Chinese vessels" likely to come into effect next week, would lead to a "massive restructuring of all North American liner services." "It will take months to resolve this mess and there will be port congestion and soaring freight rates in the coming months," Maersk wrote in a letter to customers.
Alan Murphy, founder and CEO of maritime consultancy Sea-Intelligence, said none of the Chinese manufacturers his company has contacted are currently actively considering moving production capacity to the United States, largely because of doubts about the Trump administration's ultimate goals. Murphy pointed out that the Trump administration's true intentions are difficult to predict and worrisome. If tariffs are only a negotiating tactic, no one will want to make large investments in American production; If the administration is serious about reindustrializing the United States, it needs to be clear about its long-term tariff plan, not vague. Frequent changes in tariff policies add to market uncertainty. At present, the suspension of freight processing has become an effective way to mitigate the impact of tariffs, and logistics providers can provide bonded warehousing services and use delayed transit transportation methods such as foreign trade zones to temporarily defer trade tariffs.
Karsten Kildahl, Maersk's chief commercial officer, added: "The current situation is unprecedented." He revealed that many shippers are adopting a "wait and see" attitude. In a recent warning letter to customers, Maersk wrote that until the situation is clear, customers will carefully control inventory levels and continue to explore options to enhance the resilience of the supply chain. Maersk said "additional flexibility" in its global network of warehouses, distribution centres, port terminals, ships and freighters was at the heart of most of its current customers.
