Tariff talks between the US and China have stalled regarding the agriculture buy that China is expected to make in efforts to restart the negotiations. After a wild year of back and forth, some movement was expected after the tariff increase of October was indefinitely postponed, but all that action has taken a toll on the container numbers from ports across the country in October.
The Port of Virginia has even felt the pang of a slight recession in volumes as October numbers are down 1.3% though the year is up 5% over 2018. The reduction is expected to be just the first issue caused by the trade negotiations. As Chinese exports to the US fell 40% and container volumes received at ocean ports were down more than 23%.
Los Angeles itself saw a massive reduction of 19% in volumes this October as more cargo was front loaded at the start of the trade talks to avoid inventory disruptions heading into the critical holiday shopping season. Across the board, the total cargo volumes for 2019 are up around 2% though October has remained mostly flat.
We’re interested in watching this trend as it unfolds through the new year to determine if this is a fluke of issues coming together at an inopportune time or a more insidious sign that a global recession is coming soon.