[et_pb_section fb_built=\u00bb1″ specialty=\u00bbon\u00bb _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb][et_pb_column type=\u00bb3_4″ specialty_columns=\u00bb3″ _builder_version=\u00bb3.25″ custom_padding=\u00bb|||\u00bb custom_padding__hover=\u00bb|||\u00bb][et_pb_row_inner _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb column_structure=\u00bbundefined\u00bb][et_pb_column_inner type=\u00bbundefined\u00bb saved_specialty_column_type=\u00bb3_4″ _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb][et_pb_post_title meta=\u00bboff\u00bb _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb title_font=\u00bb|||on|||||\u00bb custom_margin=\u00bb||10px|||\u00bb][\/et_pb_post_title][et_pb_text _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb custom_margin=\u00bb||39px|||\u00bb hover_enabled=\u00bb0″ border_width_bottom=\u00bb1px\u00bb border_color_bottom=\u00bb#a8a8a8″ sticky_enabled=\u00bb0″ custom_padding=\u00bb||5px|||\u00bb]Reducing trade with China was supposed to happen in 2020. But demand for Chinese goods has soared amid pandemic lockdowns.
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American imports from China are surging as the year draws to a close, fueled by stay-at-home shoppers who are snapping up Chinese-made furniture and appliances, along with Barbie Dream Houses and bicycles for the holidays.<\/p>\n
The surge in imports is another byproduct of the coronavirus, with Americans channeling money they might have spent on vacations, movies and restaurant dining to household items like new lighting for home offices, workout equipment for basement gyms, and toys to keep their children entertained.<\/p>\n
That has been a boon for China, the world\u2019s largest manufacturer of many of those goods. In November, China reported a record trade surplus of $75.43 billion, propelled by an unexpected 21.1 percent surge in exports compared with the same month last year. Leading the jump were exports to the United States, which climbed 46.1 percent to $51.98 billion, also a record.<\/p>\n
That surge has defied the expectations of American politicians of both parties, who earlier this year predicted that the pandemic, which began in China, would be a moment for reducing trade with that country and finally bringing factories back to the United States.<\/p>\n
\u201cThe global pandemic has proven once and for all that to be a strong nation, America must be a manufacturing nation,\u201d President Trump said in May. \u201cWe\u2019re bringing it back.\u201d<\/p>\n
But despite Mr. Trump\u2019s restrictions on Chinese goods, including tariffs on more than $360 billion worth of its imports, there is little sign that global supply chains are returning to the United States. Instead, the prolonged effects of the pandemic on the United States appear to have only reinforced China\u2019s manufacturing position.<\/p>\n
China employed draconian lockdowns and extensive surveillance to shake off the effects of the pandemic earlier this year, allowing its factories to reopen at a large scale more quickly than businesses in America, where the disease is still running rampant. With many American companies, especially those based on services, crippled by coronavirus, consumers are pumping their money into online shopping for manufactured goods instead.<\/p>\n
Mary E. Lovely, a senior fellow at the Peterson Institute, said that U.S. imports from the world were on track to be lower this year than in 2019, but that China\u2019s overall share of U.S. imports would likely increase.<\/p>\n
\u201cOverall, China\u2019s quick economic recovery and its dominance as a source for products that Americans have turned to during the pandemic have outweighed the dampening effect of Trump\u2019s tariffs,\u201d she said.<\/p>\n
Consumer demand is so strong that it has overwhelmed the capacity of the cargo industry, leading to a record spike in shipping rates. The surge in shipments is clogging many supply chains, snarling major ports and delaying delivery of holiday gifts by up to several weeks.<\/p>\n
At the Port of Los Angeles, the country\u2019s largest processor of container cargo and the gateway for many Chinese goods, shipping containers carrying Chinese imports are stacked like Legos in piles six high. Truckers jam the parking lots, waiting hours to pick up goods, which are then dispatched across the continent.<\/p>\n
October was the busiest month in the port\u2019s 114-year history, and traffic has remained high. On Dec. 1, dockworkers were busy unloading 19 vessels, compared with 10 to 12 on a normal day, said Gene Seroka, the port\u2019s executive director. Twelve more ships waited in the harbor, which, on average, had been waiting about 48 hours beyond their scheduled arrival, he said.<\/p>\n
\u201cWe\u2019re going through a time that truly is unprecedented,\u201d Mr. Seroka said. \u201cYou\u2019re trying to stuff 10 pounds of potatoes in a five-pound bag. This ordering and replenishment is bigger than anything we\u2019ve seen, and now it coincides with holidays.\u201d<\/p>\n
The pileup started earlier this year, as American retailers and manufacturers began to restock products this summer after brief lockdowns in the spring, and consumer spending began to rebound. While the pandemic has left former employees of restaurants, airlines and theme parks destitute, many members of the country\u2019s vast remote work force have seen their bank accounts grow, and surveys show expectations for consumer spending remain strong.<\/p>\n
The initial data snapshot of November trade released earlier this month by China\u2019s General Administration of Customs did not include detailed data by product and country. But trade data for the first 10 months of this year, compiled from United States Customs data by IHS Markit, shows that American imports of consumer electronics from China have been strong, as have imports of masks and other personal protection equipment for the pandemic.<\/p>\n
Jay Foreman, chief executive of the toy company Basic Fun!, said his company had gone from being \u201cpanicked\u201d about the future of its business in March and April to suddenly realizing that demand was stronger than ever.<\/p>\n
\u201cEspecially as you got into June, July and August, the spigot got turned on,\u201d he said. \u201cEverybody realized we don\u2019t need less stuff from Asia and China, we need more stuff.\u201d<\/p>\n
[\/et_pb_text][et_pb_image src=\u00bbhttps:\/\/bespokesourcing.com\/wp-content\/uploads\/2021\/04\/trade.jpg\u00bb title_text=\u00bbtrade\u00bb _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb][\/et_pb_image][et_pb_text _builder_version=\u00bb4.7.7″ _module_preset=\u00bbdefault\u00bb]For the toy industry, it is shaping up to be one of the biggest holiday seasons in years. But Mr. Foreman said his business would be dampened somewhat by the shipping delays. Some of the Tonka Trucks, Lite Brite sets and Care Bears that the company sells are currently stuck on container ships, or in the yard of the Port of Los Angeles.<\/p>\n
While Mr. Foreman was confident he could still sell those toys in January, he said missing the Christmas cutoff would be much more problematic for small companies and importers of seasonal products, like wreaths and Christmas lights.<\/p>\n
\u201cEveryone has stuff sitting,\u201d he said. \u201cEverything is a week or two behind schedule.\u201d<\/p>\n
Arnold Kamler, the chief executive of bicycle-maker Kent International Inc., said he was also experiencing a historic combination of strong demand and shipping delays.<\/p>\n
Lockdowns in China earlier this year led to production delays at Kent\u2019s Chinese factories, while American demand for bicycles began to surge, as buyers sought them for entertainment and exercise, as well as an alternative to public transportation.<\/p>\n
Pandemic-related demand for bicycles was so strong that some had begun referring to them as \u201cthe new toilet paper,\u201d Mr. Kamler said.<\/p>\n
\u201cI never had hoped to be compared to toilet paper, but in this case, this was a good thing,\u201d he said.<\/p>\n
After maintaining light inventory all year, Mr. Kamler said his company had finally accumulated enough bicycles in its warehouses in California and South Carolina in the past four to six weeks to meet demand. But UPS and FedEx, which deliver the company\u2019s bicycles directly to customers on behalf of Target, Kohl\u2019s, Walmart and other retailers, have drastically cut the number of trucks they can dispatch to the warehouses each week.<\/p>\n
\u201cWe can\u2019t get trucks to show up,\u201d he said. \u201cIt\u2019s crazy to have this demand and not be able to ship it.\u201d<\/p>\n
That surge has created an unusual problem for China: finding enough 40-foot steel boxes into which all those goods can fit. China\u2019s exports have been so strong this autumn that far more shipping containers are leaving Chinese ports than are coming back.<\/p>\n
American exports to China have also soared this fall, driven by strong purchases of soybeans and other agricultural goods under the U.S.-China trade agreement. But these goods \u2014 like the iron ore and coal that China also imports plentifully \u2014 travel in bulk freighters, not 40-foot containers. China imports few American manufactured goods that would travel in containers.<\/p>\n
Mr. Seroka said exports of containers stocked with American goods were down 14 percent annually so far this year at the L.A. port, creating inefficiencies and logistical issues for railroads, trucking companies and cargo lines.<\/p>\n
In the month of October, the port exported more than twice as many empty containers as those filled with American goods, Mr. Seroka said. He blamed the trend on the U.S.-China trade war, which spurred Beijing to impose more tariffs on American products, as well as the strength of the U.S. dollar, which makes American goods more expensive overseas.<\/p>\n
For both importers and logistics companies, it remains unclear how U.S. trade policy will shape their business in China in the years to come.<\/p>\n
President-elect Joseph R. Biden Jr. has not committed to lifting any of Mr. Trump\u2019s tariffs, saying he will begin reviewing them once in office. Many of the exemptions that companies received from the tariffs are set to expire on Dec. 31, and the Trump administration has not said whether they would renew them.<\/p>\n
Chris Rogers, a global trade and logistics analyst at Panjiva, said that the trade wars and tariffs that the United States placed on China had actually reduced imports of the particular goods that were hit with tariffs \u2014 but other products that have not been taxed are booming. He said that companies could still choose to relocate their production out of China, as their businesses emerge from the pandemic.<\/p>\n
\u201cThe time to muck about with your supply chain is not during the pandemic,\u201d Mr. Rogers said. \u201cA lot of companies have been in cash preservation mode. Moving your supply chain is expensive and takes time. There clearly is an opportunity for companies coming out of the pandemic to say we need to build resilience, move manufacturing closer to consumers.\u201d<\/p>\n
Despite the shipping disruptions, some companies that have kept their production in China throughout Mr. Trump\u2019s trade wars are now feeling vindicated.<\/p>\n
Mr. Foreman said he considered moving some operations to Vietnam or India, like many toymakers did amid the trade wars last year, but \u201cstaying in China ended up to be the best move.\u201d<\/p>\n
\u201cChina still has the best production supply chain of anybody in the world, and as it turned out, they were able to tackle the pandemic faster and more efficiently than anybody else,\u201d he said. \u201cChina certainly has tested the boundaries and proven that they can weather the storm, as great as a storm as we\u2019ve seen in a hundred years.\u201d
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