Chinese Ports Begin Delaying Clearing Of US Goods

Rumors that US companies have been experiencing unspecified “difficulties and delays” while trying to get their goods through customs in China have been circulating for weeks – ever since reports surfaced alleging that Chinese officials had warned US executives that China would come down hard on US firms in retaliation for Trump’s trade war. And now that the Trump administration has finally imposed the first round of tariffs, Reuters is reporting that several major Chinese ports are delaying the clearing of goods from the US as officials await further instructions from the central government. These delays could seriously disrupt imports – especially of agricultural products like pork and soybeans which were targeted by Beijing for tariffs.

An official at the port of Shanghai told Reuters that the clearing of some US imports through customs had been halted.

There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting until they had received official guidance from the central government on imposing hefty import tariffs on hundreds of products, the sources said.

A wine merchant in Shanghai, one of the country’s busiest trading hubs, said customs brokers were also slowing the clearance process because of confusion about how and when to implement duties.

“They’re holding everything … because there’s uncertainty,” he said.

[…]

“But overall, this weekend they should be able to identify what the taxes are and how they should be implemented, and they should be processed as normal.”

Meanwhile, a commodities trader in Shandong province said he was told by customs officials that the clearance of goods from the US that are on Beijing’s “list” will be delayed. Among the goods being targeted by tariffs, transportation equipment, electronics and agricultural products, among others, were high on the list. American fruit, pork, nuts, wine and – of course – soybeans, with a 25% tariff. The chart below from JP Morgan is a rough breakdown of expected tariffs by industry (however, some of the announced tariffs have yet to be implemented).

And here’s a list of US goods that China has threatened with tariffs.

According to Reuters, the delays started at midnight local time on Thursday. China said that it would wait for the US to impose tariffs on Chinese goods before responding with its own tariffs. China has implied that customs delays and other actions to discourage or punish US firms operating in China would be an integral part of its trade-war response thanks to the US’s gaping trade deficit.