Did You Know That…

….Shippers breath easier as the US and China extend the trade truce. The US yesterday extended the 90-day pause for ‘reciprocal’ tariffs on Chinese imports until 10 November – a move that could “change the whole logic” of some supply chains.  

…China’s exports increased by 7.2% in July, year on year, helped by a truce in America’s trade war with China.

…Container demand clouded as front-loading swells inventories.

·Inventory buildup from tariff-driven front-loading is dampening container demand

·Experts warn that the ‘artificial’ trade boom could trigger a ‘whiplash’ downturn in 2026 as demand payback hits

·Peak season expectations are being dashed as shippers cautiously await US-China trade talk results.

Tariff‑led front-loading has pushed US July container imports to near‑record highs, lifting inventory levels and deepening risks of a shipping slowdown.

…Transpacific spot rates near pre-Red Sea crisis levels despite aggressive capacity cuts.

·Transpacific rates lost further ground this week despite continued efforts to curb capacity

·Blanked sailings have nearly doubled since mid-June

·Spot rate declines expected to continue through Q3 and Q4

Transpacific spot rates plunge again. Carriers’ blank sailings to slow the fall, but analysts warn the worst may be yet to come.

…Cosco-MSC partnership in Hutchison port sale may reshape alliance dynamics.

Cosco reportedly seeks a 20%-30% stake in CK Hutchison’s ports sale, potentially creating a strategic partnership with MSC that extends beyond the transaction itself. The deal, if materialises, could provide Chinese giant with crucial leverage as it faces new US port fees and negotiation with its Ocean Alliance partners.

…Chittagong offers incentives to clear backlog of empty containers. Chittagong Port Authority is offering priority berthing for ships collecting empty containers, as it looks to contend with a build-up of some 6,794 teu in storage, well above the 5,500 teu limit.

…Donald Trump’s tariffs on Brazil are more bark than bite. The Latin American giant may have avoided the worst—for now. When Donald Trump first announced his tariff barrage on April 2nd, it was pitched as payback against countries that had “looted” and “pillaged” the United States through trade. But when the latest round of levies came into force on August 7th, Brazil, a country which imports more from the United States than it exports to it, was hit with a rate of 50%, one of the steepest in the world. The reason was not economic. Mr Trump is incensed that his ally, Jair Bolsonaro, Brazil’s hard-right former president, is on trial, accused of plotting a coup. The tariffs, he claimed, were a response to that “witch hunt”. 

…Cow’s milk, as well as Russian oil, fuels the US-India trade war. There is another liquid the two sides cannot agree on. Donald Trump has beef with India for buying oil from Russia. But the American president’s tariffs totalling 50% on many Indian exports—set to come into force later this month—are not just about geopolitics. Agriculture and dairy have been the most contentious issues in India’s talks with America, which broke down this month. And it is over farming that India’s equally combative prime minister, Narendra Modi, has chosen to fight back. “India will never compromise on the well being of its farmers, dairy and fishermen,” he thundered in Delhi on August 7th, a day after Mr Trump’s announcement.

…Xi Jinping’s city of the future is coming to life. It is both impressive and worrying. Xiongan, China’s “city of the future” and a pet project of Xi Jinping, the country’s supreme leader, has become a byword for costly vanity projects. Central-government and provincial planners have spent at least 835bn yuan ($116bn) on the city since 2017, when they broke ground in what had been marshy farmland 125km south of Beijing. It has been touted as a solution to China’s urban maladies, with residents promised short commutes through leafy parks instead of cough-inducing traffic jams. The city is part, officials say, of a “one-thousand-year plan” in civilisation-building. A book about Xiongan from a state publisher lists its creation alongside the works of mythical emperors who supposedly lived 5,000 years ago.

…Race, power and money in South Africa. The staggering costs of Black Economic Empowerment. After the end of apartheid South Africa embarked on one of the world’s most extensive attempts to redress racial inequality. At the centre of this effort is Black Economic Empowerment (BEE), a set of policies that, in effect, force firms to sell discounted assets to black investors, hire more black managers and buy more from black suppliers. Though strongly backed by the African National Congress (anc), the party in charge since 1994, bee is being questioned like never before. The Trump administration cites BEE as a reason it is imposing 30% tariffs on the country. Inside South Africa there is growing concern that these policies, while perhaps necessary at first, are no longer useful. BEE has mostly benefited a tiny black elite while constraining economic growth, undermining the social stability it was meant to underpin.

…West Coast Ports Smash Records as Shippers Rush Ahead of Trump Tariffs.

Both the Port of Los Angeles and Port of Long Beach recorded their busiest July ever as importers accelerate shipments amid concerns over impending tariffs...

…China’s planned Turkish EV factories have yet to power up.When they do it could spell trouble for TOGG, Turkey’s domestic EV maker. WHEN BYD, China’s biggest electric carmaker, offered a $1bn investment in the summer of 2024, Turkey rolled out the red carpet. Recep Tayyip Erdogan, the country’s president, attended the signing ceremony. Officials in Manisa, where the company plans to open a new factory, mused about a future “Chinatown” to house BYD workers. Yet a year down the line, despite reports the company would accelerate work on the plant at the expense of one in Hungary, things have not progressed much. The factory is supposed to open next year, but there are no signs of construction save for a few containers and the occasional dump truck. Turkey’s location and relatively low labour costs make it a big draw for Chinese EV makers. So does its customs-union agreement with the European Union, which allows cars built in Turkey to be exported to the bloc tariff-free. Last year the EU slapped tariffs of up to 35%, on top of an existing 10% duty, on Chinese EVs. Other Chinese auto makers looking to Turkey as a way to avoid the tariffs include Chery, said to be eyeing a $1bn investment.

…How court ruling on Trump’s tariffs could impact container shipping.

·Trump administration warns court ruling against tariffs would lead to another Great Depression

·Treasury Secretary Scott Bessent argues that the higher the tariff income, the harder it will be for Supreme Court ‘to rule against this’

·Court ruling will provide more certainty to container shipping; a ruling against tariffs would likely be positive for demand.

The Trump administration could lose its appeal in Federal Circuit Court, pushing the decision to the Supreme Court in October. The final ruling will have a significant effect on US container shipping flows.

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.

Have a good weekend and Summer Holidays ahead !