When we last considered the state of trade between the U.S. and China, we anticipated that we would see the year over year growth rate of exchange rate-adjusted value of the goods and services transacted between the two nations pick up in June 2018, as international shippers strove to beat the clock for when a new round of tariffs imposed by both nation’s on each others goods went into effect in early July 2018.
Sure enough, there was indeed a small pickup in those growth rates, with U.S. exports to China accelerating to a positive value, ahead of a smaller increase in the growth rate of China’s exports to the United States.
One of the things that we were primed to expect from mainstream news coverage is that shippers were rushing to get U.S. soybeans to China before the tariff clock finished counting down.
A ship carrying U.S. soybeans is steaming toward northern China in a race to beat a 25 percent tariff.
Peak Pegasus is expected to arrive in Dalian on Friday, the same day that China is scheduled to impose tariffs on imports from the U.S., according to shipping data compiled by Bloomberg and a person familiar with the matter. If it arrives as scheduled, it should be able to clear customs before the tariffs are imposed, according to the person, who asked not to be identified because they’re not authorized to speak to the media. Ship-tracking data currently shows it arriving at about 5 p.m. local time.
The Peak Pegasus would likely have been the last cargo ship to try to successfully beat China’s tariff clock, but it would have been far from the only ship doing so, where others would already have completed their cargo runs during the month of June 2018. Since we’ve been tracking what had been a U.S. trade success story with respect to China’s importation of U.S. soybeans for years, we were set up to capture the impact that this kind of tariff-avoidance activity would have.
What we found was… nothing that stood out in any meaningful way from the seasonal pattern for U.S. soybean exports to China for every June since 2012.
