The U.S.-China trade war is inflicting severe damage on the real economy. The volume of China-originated containers bound for the United States has disappeared by up to half, and foreign-invested enterprises in China are expressing difficulties as they bear the double burden of ultra-high tariffs imposed by both the United States and China. The approval rating of U.S. President Donald Trump, who has shaken the global economy just 100 days after re-entering the White House, has fallen to the lowest level among U.S. presidents in 70 years.
According to Vison, a supply chain data collection company, on April 27 (local time), the volume of 20-foot container bookings departing from China and entering the United States has decreased by 45% compared to a year ago. John Denton, secretary general of the International Chamber of Commerce (ICC), explained, “Now, as it’s unclear when the U.S. and China will lower tariffs, (the trade industry) is postponing shipments as much as possible.” The number of container ships from China to the U.S., independently tallied by Bloomberg, also plummeted by about 40% to 40 ships as of April 26, compared to the beginning of this month. Air cargo volume has also dropped sharply. According to Hong Kong freight forwarder EasyWay Airfreight, the volume of U.S.-bound cargo from China this month has decreased by about 50% compared to previous years.
The Financial Times (FT) reported that the impact felt on the trade front is even more severe than the statistics suggest. Taiwan-based shipping company TS Lines recently suspended some cargo services from Asia to the U.S. West Coast, citing “no demand for U.S.-bound cargo” as the reason. The problem is that the tariff shock is just beginning. In fact, the volume expected to arrive at the Port of Los Angeles (LA), a major U.S. gateway for China-originated cargo, on May 4 is about one-third less than a year ago. Jay Foreman, CEO of U.S. toy manufacturer Basic Fun, expressed concern, saying, “In a few weeks, the scale of losses will become uncontrollable.” Meanwhile, as Chinese company Shein decides to raise product prices by up to 377% ahead of the U.S. abolishing its de minimis exemption for small parcels, it is assessed to be a direct hit on U.S. consumer prices.
China is also inevitably affected. According to the FT, joint ventures engaged in processing trade in China are being hit. These companies have to pay tariffs twice: once when importing raw materials from the U.S. (125%), and again when exporting finished products to the U.S. (145%). The Chinese economy is also expected to suffer unavoidable damage. Foreign-invested companies operating joint ventures in China account for one-third of China’s trade. The FT pointed out that “(foreign companies) are in a situation where they fundamentally need to rethink their strategy of ‘Made in China, Exported to Third Countries’.” There have been successive reports of foreign companies with factories in China, as well as Chinese manufacturers, moving to India to reduce the impact of tariffs.
As the trade war impacts not only the global economy but also the U.S. economy, President Trump’s approval rating continues to plummet. In a poll conducted by CNN from April 17-24 among 1,678 U.S. adults, President Trump’s approval rating was recorded at 41%. CNN pointed out, “President Trump’s approval rating is the lowest in 70 years among new presidents at the 100-day mark since President Dwight Eisenhower (in office 1953-1961).” Meanwhile, U.S. Treasury Secretary Scott Bessent appeared on CNBC on April 28 (local time) and maintained the position that trade dialogue with China is ongoing, saying, “(The U.S. administration) is in contact with China on all aspects (regarding trade negotiations).” He added, “China needs to move towards (easing trade tensions). Tariffs (exceeding 100%) are not sustainable.” Secretary Bessent also added, “The U.S. is making progress in negotiations (with various countries), and agreements (between the two countries) will be possible in the near future.”
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