HONG KONG – Hong Kong’s freight forwarding industry is reeling from the US-China trade war with 41 percent of container capacity from the city to North America’s west coast cancelled for the week starting May 12, the South China Morning Post reported.
Hong Kong, a global shipping hub which plays a key role in re-exporting goods, is likely to see a huge economic hit, the SCMP reported, quoting Joyce Tai, executive vice-president for worldwide partnerships at freight booking platform Freightos.
Tai said there would be a “huge economic hit” due to Hong Kong’s pass-through role, with the impact probably a lot heavier than on the mainland.
Washington and Beijing have been locked in a cat-and-mouse game over tariffs, with neither side willing to be seen to back down in a trade war that has roiled global markets and wreaked havoc on supply chains.
US President Donald Trump’s move to impose punishing tariffs of 145 percent on many Chinese products saw Beijing respond with levies on imports of US goods of 125 percent, as Beijing labelled Trump’s tariff strategy “a joke.”
The tit-for-tat increases stand to make goods trade between the world’s two largest economies impossible, analysts say, with import duties beyond about 35 percent potentially wiping out Chinese exporters’ profit margins and making American products in China similarly exorbitant.
Judah Levine, Freightos head of Research said that carriers were cancelling “very high levels of sailings that were scheduled from China to North America in the coming weeks,” according to the SCMP.
The paper also reported Sea-Intelligence, a supply chain research company, saying 32 percent of sailings would be cancelled in the coming two weeks.
Hong Kong’s economy grew in the first quarter by 3.1 percent from a year earlier, official advance estimates showed on Friday, expanding for a ninth quarter.
That was a faster rate than the mean forecast of 2.1 percent year-on-year growth by six economists in a Reuters poll. Hong Kong reported a revised 2.5 percent economic growth in the fourth quarter of 2024, 1.9 percent growth in the third quarter, 3.0 percent growth in the second quarter and 2.8 percent growth in the first quarter.
External demand supported goods exports while growth in visitor arrivals boosted services, the government said of the first quarter performance.
Overall investment expenditure also rose, but private consumption spending declined amid changes in residents’ consumption patterns as they tightened their belts and took advantage of the Hong Kong dollar’s strength to shop across the border on the mainland.
On a seasonally adjusted quarterly basis, the economy expanded 2.0 percent in January-March, the data showed. That compared to a 0.9 percent in October-December, 0.1 percent decline in July-September, 0.3 percent growth in April-June and 1.3 percent rise in January-March.
Private consumption expenditure decreased by 1.2 percent in the first quarter, compared to a decline of 0.2 percent in the fourth quarter, a drop of 1.3 percent in the third quarter, a 1.9 percent decline in the second quarter and a 0.9 percent growth in the first quarter.
