U.S. Economy
U.S. President Trump officially announced on the 13th (U.S. time) that he has decided to impose “reciprocal tariffs” in consideration of each country's tariff and non-tariff barriers. Reciprocal tariffs are a system in which the U.S. imposes tariffs on the other country's goods at the same rate as the tariffs applied by each country to U.S. goods, and Commerce Secretary-designate Howard Lutnick said, “We plan to apply differentiated tariff rates through country-by-country negotiations,” and “The administration-level study will be finalized by April 1,” so the actual application of reciprocal tariffs is expected to take place after April. President Trump's “tariff war” began in earnest on Feb. 4, when he imposed an additional 10% tariff on China, followed by a 25% tariff on steel and aluminum products on Feb. 10, effective March 12. Meanwhile, Trump's popularity on the border has helped him receive positive ratings early in his term, and while his approval ratings are higher than they were when he took office eight years ago, they are lower than those of his predecessors, suggesting that he could lose momentum at any time. According to a CBS News poll, 53% approve and 47% disapprove of Trump's handling of the country, lower than former President Biden's 57% approval rating in February 2021, Obama's 66% approval rating in January 2009, and Bush's 59% approval rating in February 2001.
The U.S. economy continues to grow strongly, with the January unemployment rate coming in at 4.0%, below market expectations. The 4.0% unemployment rate is significantly lower than the Congressional Budget Office's (CBO) estimate of the natural rate of unemployment (4.4%), suggesting that the U.S. economy is at full employment. In response, Chicago Mercantile Exchange (CME) FedWatch increased the probability of the Fed keeping its key interest rate unchanged in March to 92% after the jobs report, up from 84% the day before. This was supported by speculation that the Fed may become more cautious about further rate cuts after the Federal Reserve (Fed) said it would not rush to cut rates given the stagnant inflation and strong economic conditions. Meanwhile, U.S. Treasury Secretary Scott Bessent stated that the U.S. will maintain a strong dollar in Donald Trump's second term administration, suggesting that the strong dollar situation will continue for the time being. The comments put to rest speculation that a second Trump administration would push for a weaker dollar, with markets believing that Trump would favor a weaker dollar to support U.S. manufacturers' exports and close the trade deficit. Bessent's declaration of a strong dollar policy was seen as an attempt to minimize the potential for tariffs to increase inflation. In addition, Secretary Bessent stated that he would strictly respond to any exchange rate manipulation by other countries, signaling his intention to strongly discourage any attempt to offset the effects of tariffs through exchange rate manipulation.
Maritime Cargo Market Trends
ㅇ North America Vessel, Rail Dwell time (Week 7 / Flexport)
Air Cargo Market Trends
TEMU demands direct U.S. delivery to goods producers
Chinese online shopping site TEMU is requiring goods producers to ship directly to the U.S. without going through TEMU, Bloomberg reported on Feb. 11, citing unnamed sources. This is an alternative to avoid President Trump's tariffs on China, which would require sellers to ship goods to the U.S. directly (half-custody), while TEMU, as a sales platform, has been responsible for everything from pricing to shipping and marketing. This will mean that TEMU will relinquish much of its control over the Chinese supply chain, which will significantly change the way it ships. This could lead to a situation where smaller companies without the ability to negotiate shipping rates and logistical support will not be able to sell to the U.S. market, especially since they will not be able to benefit from the economies of scale that come with shipping in bulk. The new method was introduced early last year, and the shift to the new method is believed to have accelerated since President Trump took office. It was previously reported that TEMU's competitor Shein is also asking its Chinese product suppliers to move production to Vietnam. Shein is reportedly offering incentives such as up to 30% higher procurement prices and guaranteed order volumes for those who move production lines.