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U.S. and China Trade: Take Advantage While the Getting's Good

May 18, 2018 1:31:51 PM / by Fauad Shariff

International trade, and especially trade with China, has grabbed headlines like never before. President Trump frequently criticizes China for getting away with “unfair” trade deals, and for “taking advantage of the American worker.” Tariffs announced earlier this year are one possible outcome. Recently, U.S. and China delegations have entered into direct negotiations to keep their trade partnership intact, but so far, little progress has been made.

No business likes uncertainty. Facing these threats of punitive tariffs and trade sanctions, any company that relies on China trade is of course on edge. But are those fears warranted? And how is the prospect of a shifting trade landscape changing how we do business?

Let’s start with some basic facts:

U.S. West Coast to Asia shipments hit record volumes in April 2018. And According to Wall Street Journal, 306,503 TEUs were moved from Los Angeles/Long Beach to Asia, a 12% increase in traffic year over year. Analysts credit anxiety and uncertainty over impending trade restrictions as the driving forces behind the record numbers. So in essence, we don’t know what’s going to happen -- everybody is rushing to pump out exports before...well, before who knows what will actually happen.

But it’s not just about exports. We often think of Asia as the export capital of the world. But China -- home to nine of the top 20 ports by volume in the world in 2017 -- also imported almost US $2 trillion of goods in 2017, ranking third in the world in imports. US-Asia trade has been on track to grow by about 7% for the year, which would be the fastest pace in recent history. But while progress is being made with fears of trade restrictions and tariffs looming, it could be unsustainable if those restrictions take effect.

What does this all mean for the nuts and bolts of China shipping...especially for those in the freight forwarding business? Here at CoLoadX, we’re in the business of monitoring the market and, through our marketplace, facilitating cargo transactions at attractive rates. And we’ve found that, despite all this demand, rates to China are still very reasonable. For example, a 40-ft container sailing to Shanghai can be found for $200 all-in. That’s hard to beat in any economic condition.

As much as we’d love you to try our marketplace to find these rates, there’s a broader point here: even if the tariff uncertainty is causing anxiety, we must all run our businesses in real-time.

Business is happening today, and we must make our decisions based on what is, not on what might be. There’s profitable business to be done today, especially with China. So rather than spend sleepless nights worrying about the nuances of international trade negotiations, it’s better to jump right in and take advantage of the huge opportunities while they last.

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Topics: Shipping, Trade, Ocean Freight, China, Trump, Innovation

Written by Fauad Shariff

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