US Companies Stockpile Imports Ahead of Trump's Tariff Threats
Strategic inventories grow as President-elect Trump plans tariffs of 10% to 60% on Chinese imports.
As 2024 came to a close, U.S. imports from China surged, fueled by companies stockpiling goods such as apparel, toys, electronics, and furniture ahead of President-elect Donald Trump’s looming tariff threats. Trump, set to take office on January 20, has warned of imposing tariffs ranging from 10% to 60% on Chinese products, which could escalate tensions between the world's largest economies.
During his first term, Trump focused on taxing Chinese components and parts, but experts predict the next round of tariffs may target finished products.
“There has been an uptick in the export of final goods from China to the U.S., as importers rush to get ahead of potential tariffs on consumer items,” noted Frederic Neumann, Chief Asia Economist at HSBC in Hong Kong.
On Monday, Chinese trade officials reported that December exports hit a record high, partly driven by fears of worsening trade protectionism. Lv Daliang, spokesperson for the Chinese customs administration, attributed the surge to these concerns.
In December, U.S. seaports processed the equivalent of 451,000 40-foot containers of goods from China, marking a 14.5% increase from the previous year, according to trade data provider Descartes Systems Group. This contributed to a 15% year-over-year rise in U.S. imports from China in 2024, covering a wide range of products, including bedding, toys, and machinery.
Helen of Troy Ltd, the company behind OXO kitchen products, Hydro Flask bottles, and Vicks medicines, is one example of businesses ramping up imports in anticipation of the tariffs. The company has been building inventories to minimize the impact of potential price hikes.
“We expect more clarity once President-elect Trump takes office,” said Helen of Troy CEO Noel Geoffroy, regarding the future of U.S. tariff policies.
MSC Industrial Direct, a distributor of tools and plumbing supplies, also has been preparing for the tariffs, stocking up on its most popular items sourced from China. In addition, the company is launching promotions for U.S.-made products.
However, assessing the precise impact of these import increases is challenging, as companies closely guard their trade data. The overall surge in imports also reflects strong U.S. consumer demand, which has helped sustain market activity. Some companies have also stockpiled goods to guard against disruptions, including threats of violence near the Suez Canal and a potential labor dispute at U.S. East Coast and Gulf Coast ports.
Trump’s tariff threats extend beyond China. He has also considered tariffs on goods from other countries, including Mexico and Canada, further complicating trade relations.
Retail giant Walmart, one of the biggest shippers in the U.S., is reportedly among those increasing imports, although the company declined to comment on this trend.
In the fourth quarter of 2024, U.S. imports in several categories saw notable increases. Textiles and apparel jumped 20.7%, toys grew by 15.4%, home furnishings rose 13.4%, and electronics and appliances saw gains of 9.6% and 7.9%, respectively. Consumer staples like personal care items, food, and beverages also saw growth, according to S&P Global Market Intelligence.
Element Electronics Corp, which imports components and finished televisions from China for its South Carolina plant, experienced a year-end rush of imports. The company’s CEO, Michael O’Shaughnessy, noted that while they stockpiled goods to avoid disruptions from threatened port strikes, there are practical limits to inventory levels.
“There’s just no place to put everything,” O’Shaughnessy said. “Also, the longer it sits there, the more it costs us.”
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