By Plasteurope.com staff

The US government has announced new tariffs on a number of products coming from China – electric vehicles, lithium batteries, critical minerals, semiconductors, steel and aluminium, port cranes, and medical supplies. “American workers can out-work and out-compete anyone as long as the competition is fair, but for too long it hasn’t been fair,” news agency Reuters quotes US President Joe Biden as saying during a speech in the White House Rose Garden. “We’re not going to let China flood our market.”

The tariffs for electric vehicles being imported from China could quadruple from the existing 25% to 100%; rates on certain steel and aluminium products are set to more than triple to 25%, from approximately 7.5%. Semiconductors are also to see a doubling of tariffs from 25% to 50%. The new tariffs are to come into force between 2024 and 2026.

In response to Biden’s speech, China urged the US to immediately lift the additional tariffs imposed on its products, warning that it will take resolute actions to protect the country’s rights and interests, the country’s Ministry of Commerce said.

Container freight rates had been falling consistently for weeks, despite the confusion surrounding the Red Sea conflict. On numerous routes between East and West, prices for freight transport by sea had been rising considerably, driven by the unrest on the Red Sea. Now, however, the number of containers available is too small to fully meet demand.

At the height of the pandemic, the paucity of steel boxes had driven prices up. As a result, shipping companies ordered the construction of tens of thousands of additional containers. In the Far East in particular, every backyard welder had allegedly been involved in the production of the 20- or 40-foot containers. The fact that the steel boxes are now once again becoming a scarce commodity and thus limiting the available transport capacity is also due to the current mess on the global goods trade market. 

The detours taken by freighters around the Cape of Good Hope have meant that several schedules and turnaround times could not be adhered to – and that many containers are therefore still sitting where they no longer belong. What’s more, in view of the general global economic uncertainty and eroding profits, a number of shipping companies have thinned out their schedules. On routes where there used to be three ships travelling at a time, there is now a lone ship chugging along the world’s oceans. Fewer slots with a stable order situation mean higher prices – this is the simple yet effective entrepreneurial formula for success of the shipping companies spoilt by billions in profits made by their strategy of artificial scarcity.  

Freight rates for 13 – 19 May; price for a 40-foot container (FEU)
Route	Change from prior week	USD	EUR
China – US West Coast	+8.8%	3,700	3,442
China – US East Coast	+9.1%	4,800	4,465
China – Northern Europe	+12.5%	3,600	3,349
Northern Europe – China	-6.7%	700	651
China – Southern Europe	+10%	4,400	4,093
Southern Europe – China	-6.3%	750	698
US East Coast – Northern Europe	unchanged	650	605
Northern Europe – US East Coast	unchanged	2,200	2,047

— Translated by Somya Abrol