In December 2024, exports from China to the United States experienced a significant increase as traders hurried to avoid impending tariffs that President-elect Donald Trump is expected to enforce shortly after taking office on Monday.

According to the latest report from China’s General Administration of Customs, December exports to the U.S. reached $48.8 billion, marking the highest monthly total for 2024, and reflecting a 16% increase compared to December 2023.

Analysts believe this sudden rise can be attributed to anticipated tariff increases, prompting traders to expedite shipments from China. Trump has publicly stated his intention to impose tariffs on Chinese goods, including mentions of a potential 60% tariff, and during his campaign, he even suggested tariffs could reach 100%.

Mary Lovely, an economist at the Peterson Institute for International Economics, noted, “While we can’t definitively know people’s motivations, it seems likely that there is stockpiling or pre-ordering in anticipation of upcoming tariffs.”

Is It Wise to Stockpile Ahead of Tariffs?

Although traders may be stockpiling, American consumers may find it impractical to do so for every product, according to Lovely.

She advised, “It’s not sensible to buy more of items you may not need, but if you’re considering purchasing a laptop or a new phone, it might be a good idea to proceed with that.”

Manufacturers are already procuring machinery and automotive parts before Trump enacts tariffs that would drive up costs, explained Nico Palesch, a senior economist at Oxford Economics specializing in global industries.

This practice, known as front-loading.

The increase in imports during December “indicates that front-loading is occurring,” Palesch mentioned.

This strategy could work well for manufacturers, giving them time to locate alternative suppliers in other nations, or if they anticipate a resolution between the U.S. and China that might prevent tariffs.

However, Palesch warned that without such resolutions, the benefits are minimal. While companies may save money in the short term, “it ultimately just delays the problem.”

He added that the combination of these purchases and a rise in consumer demand for goods has led to increased imports: “Demand for imports in the U.S. remains robust.”

China’s Exports Reach Record Highs

Apart from a significant export boost in December 2021 due to economic recovery post-pandemic, last year’s end marked a decade-high for Chinese exports to the U.S.

In 2024, China’s total exports to the U.S. surpassed $524 billion, representing a 5% increase compared to 2023.

Overall, China achieved record-high global exports of $3.5 trillion in 2024, as reported by the country’s customs administration.

Wang Lingjun, the vice minister of the customs administration, highlighted at a recent press briefing: “We imported agricultural products, energy resources, pharmaceuticals, and aircraft from the United States, while we exported clothing, consumer electronics, home appliances, and more, leading to mutually beneficial trade.”

Last year, China maintained a trade surplus of $361 billion with the U.S., which accounts for a third of its overall record trade surplus of nearly $1 trillion.

According to U.S. Census trade data, China is the U.S.’s third-largest trading partner, following Mexico and Canada. Trump has suggested increasing tariffs on imports from all three nations.

Could Tariffs Lead to Higher Prices?

Experts largely concur that if tariffs are implemented, American consumers will likely face increased prices at retail stores.

A study from the Peterson Institute points out that China supplies a leading portion of many categories of U.S. imports. This includes nearly 75% of toys and sports equipment, over 25% of electronics and electrical machinery, about 25% of textiles and clothing, and 20% of plastics and rubber.

A tariff is essentially a tax that importers pay when foreign products cross into the U.S. The study indicates that various factors, including supply and demand, will influence how much of the tariff burden is passed on to consumers. However, it concludes, “One thing is clear: new tariffs will impose additional costs on the U.S.”

Lovely, who contributed to the study, asserted, “Consumers will notice it.”

Darpan Seth, CEO of Nextuple, a software company that provides order management systems used by retailers including Dick’s Sporting Goods, Disney, and Coach, expressed in a previous interview with YSL News that consumers will bear the costs of tariffs imposed on imported goods.

“For consumers, tariffs are effectively another form of inflation, just presented differently,” Seth remarked. “They result in the same effect of driving prices higher.”

In anticipation of potential tariffs and consequent price hikes for products like electronics, washing machines, and refrigerators, both consumers and retailers have begun to adjust their buying patterns. Seth noted that sales numbers for these items surged during Black Friday and Cyber Monday.

Contributors: Paul Davidson and Betty Lin-Fisher, YSL News