With 90-Day Tariff Window, Importers Rush to Get Chinese Goods

Following the newly-announced pause on the White House's 145 percent tariff on Chinese goods, many American importers are rushing to pay a lesser amount and get their goods into the United States now, avoiding the risk that the levy might go up again in future negotiations with Beijing. Many Chinese manufacturers report new calls from American clients who want any inventory shipped as fast as possible, and who want to restart work on the orders they had canceled last month.

“A client who has placed orders for May through August requested this morning that we resume production on the May order and deliver as soon as possible,” shoe factory owner Wang Jie told SCMP. Just one day after the tariff reprieve was announced, Wang's firm has already reopened a shuttered shoe production line.

An executive at a Shenzhen electronics manufacturer relayed a similar story to SCMP, with a minor change: the firm's U.S. clients want the goods made within 90 days, then exported to Vietnam, where the merchandise will be stored to wait out the results of future U.S. trade talks.

Jay Foreman, CEO of Florida toy firm Basic Fun!, told NPR that his firm had been holding back "everything" at factories and seaports in China while the 145 percent tariff was in effect. As soon as he got the word that the tariff rate would be cut to a "manageable" 30 percent, he called partners in China and began scheduling shipments to go out immediately.

The reprieve will mean greater selection for U.S. shoppers when the holiday season arrives. "The 90-day window staves off a potential Christmas disaster for retailers,” Cameron Johnson, senior partner at China-based consultancy Tidalwave Solutions, told NBC.

The renewed demand for Chinese goods translates into more business for ocean carriers, and reports of increased slot bookings have started to come in quickly. "Our ocean freight bookings from China to the US increased 35 percent in the first day since the trade deal. A big backlog is looming, soon the ships will be sold out," predicted Flexport's Ryan Petersen in a social media message.

The expected bump in shipping demand has prompted ocean carriers to raise their asking price for box slots on the transpacific trade lanes. Early attempts at rate hikes on China-U.S. West Coast services are in the range of $500 extra per FEU beginning this week, and as much as an extra $3,500 per FEU for next month's sailings.