Peak of Peak Season Already Passed As Trump’s Tariffs Begin to Bite

The widening application of tariffs by the Trump administration may have started to have a significant effect on U.S. imports. Seaborne shipments in August were just 1% above the prior year's level after a 7% rise in the prior three months. They were also below July’s for only the third time in the past 11 years (the previous being 2013).

That was the result of a 1% drop in shipments from China following the imposition of duties on $50 billion of Chinese exports. More of the same can be expected given the likely widening to a further $200 billion of products as soon as this month. A 10% increase in shipments from Vietnam may be an early sign of manufacturing base changes.

At the product level there was a slowdown in most manufacturing industries (capital goods / electronics rose just 1%) though the automotive sector saw an increase of 4% ahead of potential section 232 duties. Despite an 18 year high in consumer confidence there was a 1% drop in furniture imports and an 8% decline in toys while apparel growth slowed to just 2%, indicating retailers are cutting inventories.