Global Shipping Gauges Bottom Out Steaming Toward Calmer Waters

(Bloomberg) --

For all the hopes and analyst bets that the U.S.-China truce will lift the global economy in 2020, shipping gauges aren’t providing much optimism that a rebound will be quick.

Traffic at some of the world’s most significant ports has a lot of ground to make up, according to the latest data on our Trade Tracker:

• A Los Angeles port gauge of inbound containers has spent three straight months in the “red zone” — marking below-normal performance compared with its long-run average.
• Trade-heavy Singapore slipped in December to the slowest cargo traffic growth in four months.
• And Hong Kong — no doubt battling headwinds amid ongoing domestic protests — finished 2019 almost as sour as it started.

The sickly shipping dashboard on the Tracker matches the sagging sentiment and country export categories, with the 10 indicators together painting a lackluster picture of global trade. We’ve been following these gauges for more than a year, with some improving in fits and starts as tariff battles raged then waned.

But the latest data are a reminder that it could take a while to pump more steam into trade flows. For one thing, U.S.-China détentes have shown quick reversals before, interrupting progress in these gauges. And the phase-one deal that the world’s two largest economies signed last week will take a while to implement, and even after it’s in place, the accord keeps in place some $370 billion in tariffs on Chinese imports as well as Beijing’s retaliatory levies.

So the watchword for those eager to see green again is patience: The numbers could get quite a bit noisier from here, as the unusually early Lunar New Year will start to make the results difficult to interpret over the next few months even more so than in a typical year.

Charting the Trade War

President Donald Trump likes pointing out that he’s made farmers “really happy.” He’s not wrong, but it’s not just the trade deal that’s left farmers optimistic for 2020: The thing that’s really moved the needle for farmers is a $28 billion farm bailout. The aid meant incomes rose in a year when they were widely expected to fall.

Today’s Must Reads

• Math questions | China’s spending spree appears increasingly difficult to deliver, with more than $50 billion of U.S. exports annually left out of the agreement.
• Brexit reality | The U.K. and European Union are already at odds before they even start thrashing out the terms of their future trading relationship.
• Over the border | To keep goods moving across African borders, an organized, efficient network of “runners” endures hardships from paying bribes to waiting hours at checkpoints.
• Mending fences | Trump championed a pair of trade victories at a farm convention in Austin, Texas, saying farmers hit “pay dirt” with deals completed with China, Canada and Mexico.
• Keeping promises | Beijing’s ability to implement a multitude of pledges in its phase-one deal with the U.S. is likely to bedevil the Chinese economy this year.

Economic Analysis

• Premium pain | French luxury brands may shoulder toll of digital-tax trade spat.
• Boosting China | Phase one lifts China’s 2020 outlook and points to a shallower slowdown.

Coming Up

• Jan. 21: South Korea 20-day exports
• Jan. 23: Japan exports
• Jan. 24: Monthly release of the CPB World Trade Monitor
• Jan. 21-24: Business and government leaders meet at the World Economic Forum’s annual meeting. Stay on top of all of the action via Bloomberg’s Davos Diary newsletter. Click here to subscribe.

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

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