News / Few winners in a bitter trade war that's not to everyone's taste

Chinese diners at American barbecue restaurants in Beijing are chewing on a loss of authenticity these days, as the beef served is now imported from Australia.

Patriotic sentiment aside, the stark reality of costs was enough to drive restaurants in China to forsake American beef – with a 125% tariff on US imports, it simply could not compete with meat from other origins.

Most experts have stressed in recent weeks that ‘everybody loses in a trade war’ – consumers and companies that import goods or parts and producers that export their wares, not to mention logistics providers that move them between countries.

Bob Imbriani, SVP international at forwarder Team Worldwide, is seeing more pain on the US side than elsewhere. Unlike restaurateurs in China, that can pivot to other sources, US importers have few options after their government unleashed a barrage of tariffs on the world – and the same goes for exporters, he pointed out.

So far, the US agriculture sector appears to have been hit hardest, he finds.

“We see it happening in manufacturing, but more sporadic. But if this keeps up, it will spread there as well,” he added.

US manufacturers are facing increased costs, as a result of tariffs on parts and components they source from abroad, and could lose bids for business because of these elevated costs, he said.

Still, a few players have benefited from the trade barriers erected through tariffs – for instance, Australian beef exporters.

Joseph Firrincieli, sales manager at OEC Group, one of the top five NVOs in the transpacific tradelane, noted that US firms selling to domestic customers faced starkly reduced competition. US steel and aluminium manufacturers and alcoholic beverage producers should be doing rather well in the US market, he added.

Both he and Mr Imbriani stressed that the overwhelming majority of companies were adopting a ‘wait-and-see’ stance at the moment, refraining from placing new orders or shipping product until they have more clarity of the evolving trade landscape.

While they are hunkering down and drawing down inventory bolstered through front-loading, companies are studying new options, said Mr Firrincieli.

Latin America is one area that looks like it could benefit from these developments, believes Mr Imbriani. He noted that the region had been less hard hit by US tariff announcements. Indeed, the port of Miami has embarked on a promotional campaign underscoring its role as a gateway role for trade with the region.

Much hinges on how long the current state of suspense will last. Sooner or later, buyers will have to find new sources if nothing or little changes with the tariffs they face. And this is bound to lead to some severed ties.

“Once these buyers find other sources, will they come back to the US after the trade war ends?” asked Mr Imbriani.

When the tariff landscape settles into a new framework, shipping activity will jump back into gear – likely with a vengeance, predicts Mr Firrincieli, as shippers and importers rush to move goods.

“If the situation is resolved by June or July, this will get into the peak season, which could result in a space crunch, equipment shortages, and massive backlogs – it could be Covid all over again,” he said, adding that the time to ship ‘back-to-school’ merchandise was almost upon the trade.

For now, logistics providers are dealing with slow business as their customers wait for the outlook to clear. One sector is going strong, though. Interest in bonded warehouses and foreign trade zones has been lively, reported Mr Imbriani.

The Journal of Commerce reports US importers have been using bonded storage in Canada, citing one source that spoke of a four-fold increase this month.