While the stock markets mainly anticipate the future major economic consequences of a trade war, the first concrete consequences are set on the quays of ports and in factories in the North American car industry.
A week ago, the United States already announced import duties on cars from all over the world. This makes the consequences in this sector A kind of ‘canary in the coal mine’as The New York Times It described: here you can see in smallness what may take place on a larger scale in the coming period.
The first signals are drastic. Audi (part of the large Volkswagen group), Jaguar Land Rover and Aston Martin have almost completely stopped their exports to the US, it turned out in recent days. These brands do not have factories in the US with which they can avoid taxes.
Stellantis, parent company of Peugeot and Opel, among others, has temporarily stopped two car factories in Canada and Mexico last week. Moreover, it immediately dismissed nine hundred employees in smaller parts factories that supplied the stopped car factories.
For the automotive industry, the taxes are a huge problem: according to some calculations, they can increase the price of cars with thousands of dollars, although everything depends on how manufacturers do not pass this on. According to several American media, there is also major confusion and care about taxes on car parts that will in theory will start on 3 May. Although many manufacturers in the US have their own factories, they absolutely do not all get their parts from this country.
Fully full
In the coming weeks, the ports in the United States, from New York to Long Beach and Los Angeles, will be in the front line of the Trade War. With regard to cars, they are already: the Financial Times that wrote that It seems that American ports are full With cars that have already arrived in the country, but not actually introduced – to prevent taxes. The question is how long these cars will be here, and how quickly the set -up areas in ports will fill.
Incidentally, it seems that Americans have started buying cars on a larger scale in recent days, hoping to be ahead of the taxes. At the end of January, according to The New York Times, a new car was waiting for a buyer for about 77 days, now there are 50.
Also with other goods the first signals indicate that major changes will take place. Companies that transport goods to the US have reserved 67 percent less containers in recent days. The number of containers that goes elsewhere in the world from the US will also fall sharply soon.
That is what the Dutch shippers’ organization Evofenedex states based on figures from the maritime information supplier Vizion. The American agency maps out the bookings of containers worldwide.
In the week prior to Donald Trumps announcement, according to Evofenedex and Vizion, there were 516,000 bookings with the US as a destination worldwide. In the following week, that number had fallen to 169,000 containers (calculated in Teu, Twenty Foot Equivalent Unit; The twenty feet long container is a standard size in world trade). This concerns reservations for transport in about six weeks.
‘Even break’
The reservations for export from the US also had a decrease. For Trumps presentation, the number of bookings for containers from American ports to ports in, among others, Europe and Asia was 139,000. After the announcement, 83,000 containers were reserved, according to both organizations.
“Companies in Europe, China and elsewhere have taken a massive break,” says Casper Roerade policy adviser of Evofenedex. He cannot say which countries or sectors have booked fewer containers.
According to Roerade, goods that were loaded before 5 April in foreign ports for transport to the US are still exempt from the taxes. It doesn’t matter how long they take about the trip to the US.
The abrupt decrease in the number of reserved containers can ultimately lead to a disturbed balance in world trade. During the Coronapandemie, the balance was seriously disturbed of containers that are transported back and forth between Asia and the West.
The decrease is not yet visible in the rates for container transport from Asia to Los Angeles and New York, among others. On both routes, the container rates have been falling since the beginning of this year, the Norwegian research agency Xeneta and the British Drewry, among others, reported.