HomeIndustry Insights US Trade Policy Triggers Shipping Crisis, Impacting PET Chip Global Value Chain

US Trade Policy Triggers Shipping Crisis, Impacting PET Chip Global Value Chain

The imposition of higher tariffs by the United States on key Chinese imports has led to a surge in pre-tariff exports, placing strain on shipping routes from Asia to the Americas. This has in turn exacerbated container shortages, causing disruptions to the global logistics network and hindering international trade flows. As a result, both suppliers and buyers in the polyester chip global value chain are facing increased trade costs and supply chain disruptions.

The U.S. government has implemented a substantial increase in tariffs on various critical imports from China, including electric vehicles, lithium-ion batteries, photovoltaic cells, and more, further escalating the existing Section 301 trade remedies.

This policy change has immediately triggered a "pre-tariff export surge" of related products before the new tariffs take effect. For instance, Brazil's earlier announcement of import duties on Chinese new energy vehicles prompted relevant manufacturers to urgently increase exports to circumvent the new trade barrier. Similarly, the latest U.S. tariff policy has compelled many companies to expedite shipments of goods prior to the implementation of the new trade measures. This influx of Asia-origin cargo destined for the U.S. and European markets has placed significant strain on the shipping routes between Asia and the Americas.

Concurrently, the lack of backhaul cargo has saddled shipping companies with costly empty container repositioning. Many vessels have opted to idle at European and American ports, as local storage costs are more reasonable than the expenses of returning to Asia.

Furthermore, the persistent geopolitical tensions in the Red Sea region, combined with the latest escalation of the Middle East crisis, have further threatened the stability of maritime logistics. As global trade enters a peak season, the surge in cargo demand has amplified the ongoing container shortage issue, which has become a critical factor impeding the fluidity of international trade flows.

Against this complex global trade and logistics backdrop, both suppliers and buyers in the PET (Polyethylene Terephthalate) resin global value chain are facing their respective challenges:

- Suppliers (Chinese manufacturers of PET chips) are grappling with a significant increase in shipping costs, leading to slower order processing, inventory buildup, and disruptions to their export operations.

- Buyers, on the other hand, are facing pressure from rising raw material costs as the soaring freight charges drive up the import costs of polyester chips. They may also encounter unstable supply issues, impacting their production plans and product deliveries.

In the context of the uncertainties in global trade and escalating logistics expenses, it is imperative for entities procuring raw materials PET to implement sophisticated strategies to address these challenges. 

For those parties poised to acquire inputs amidst a backdrop of scarcity, a thorough cost-benefit analysis becomes essential, concomitant with the maintenance of robust communication channels with suppliers. Contractual partners may find it advantageous to proactively engage with their suppliers to examine the viability of contingent delivery deferrals or staggered shipments. Conversely, for those with substantial stockpiles, a more discerning approach to procurement timing, guided by market fluctuations, may be warranted.

For any information or business inquiries about PET chips, feel free to contact us at win-win@wkai.cc or sales@wkai.cc.

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