No trade war winners with US and China set to see freight slump, DHL data shows
- Tariffs are leading to slump in air and sea freight for key commodities, with the US and China both predicted to suffer a trade downturn as a result
- Logistics company DHL examined freight volumes for early-cycle commodities such as bumpers for cars, touch screens for mobile devices and brand labels for clothes
As the United States and China sink deeper into their year-long tariff battle, they face a downturn in trade that suggests the dispute is continuing to weaken their economies.
Quarterly data from logistics company DHL, taken from sea and air cargo figures between March and June, found that Chinese trade was expected to contract slightly as a result of smaller sea freight volumes. Within that, imports were “losing significant momentum”, especially imports of basic raw materials, capital equipment and machinery, and consumer fashion goods.
These pointed to an underlying weakness in China’s industrial economy, which was reflected in official data. Industrial production grew by 5.0 per cent in May from a year earlier, the lowest reading since 2002. DHL data also showed a slump in Chinese consumption, which was also indicated by successive official import data releases.
The US trade outlook is worse: DHL expected a “significant downturn, driven by heavy losses in exports outlook”. Both air and ocean freight have fallen into negative territory over the past quarter, according to the study which found extreme weakness in basic raw materials, chemicals and high technology.
“The declining outlook for US exports indicates that, so far, the US is missing its goal of strengthening its export economy with a harsher trade course against China,” the report said.