Tariff Impact - The effective tariff rate in the U.S. surged to 7% in April 2025, up from 2.3% in 2024, with the rate for imports from China reaching 37.5%[6] - By May 2025, the overall tariff rate further increased to 8.7%[6] Import Surge - U.S. imports exceeded historical trends by approximately $188.3 billion from December 2024 to May 2025, representing 68.6% of the average monthly import value for 2024[6] - The import growth rate is expected to be negatively impacted by about 9.8% in the remaining months of 2025 due to this surge[6] Import Sources - Major regions contributing to the import surge include the Eurozone, ASEAN, Taiwan, Australia, and India, collectively boosting U.S. imports by 11 percentage points in the first four months of 2025[6] - In April 2025, the import growth from these regions was approximately 5.7 percentage points, while the Eurozone's contribution turned negative, detracting 0.1 percentage points[6] Import Methods - Air freight imports surged to 37.1% in January to March 2025, significantly higher than the annual average of 27.6%, before dropping to 31.5% in April[6] - The increase in air freight usage indicates a strategy to expedite imports before tariffs took effect[6] Product Categories - The primary products imported during this period were electronics, pharmaceuticals, and raw metals, which together accounted for an 18.5 percentage point increase in overall import growth from January to April 2025[12] - In April 2025, electronics alone contributed 4.1 percentage points to the import growth, while pharmaceuticals and raw metals also showed significant increases[12]

Group 1: Export Performance - In May, China's exports grew by 4.8% year-on-year, with a month-on-month increase of 0.1%[7] - Exports to the U.S. saw a significant decline, with a year-on-year drop from -21% to -34.5%[7] - The high tariff impact of 145% continued until mid-May, with a reduction to 30% announced on May 12[7] Group 2: Tariff Impact - The average tariff on Chinese goods by the U.S. is approximately 42%, with about 40% of goods facing a 39.5% tariff[10] - Around 32% of goods are subjected to a 57% tariff, while the average tariff for other regions is about 12%[10] - The tariff reduction has not significantly boosted the "export rush 2.0" effect, indicating limited recovery in U.S. demand[20] Group 3: Shipping and Demand Trends - Shipping rates to the U.S. increased significantly, with the CCFI index for the West and East U.S. routes rising by 21% and 23% respectively by June 6[14] - Container ship numbers from China to the U.S. showed a slight improvement in early June, but remained below levels seen before April[14] - U.S. import demand has been declining since April, with a drop in import growth from 31.1% in March to 2.2% in April[19]

Core Viewpoint - Since early 2025, the U.S. has significantly increased imports, but the accumulation of inventory has lagged behind, raising questions about the sustainability of this import surge and whether "safe" inventory levels will rise [2][57]. Group 1: Import Surge and Inventory Accumulation - The U.S. has experienced a notable surge in imports since early 2025, particularly following the election of Trump, which heightened expectations of increased tariffs. This surge is reflected in data from Chinese exports, U.S. imports, and port activity [2][57]. - In the first quarter of 2025, U.S. imports increased dramatically, with a year-on-year growth rate of 31.4% in March. However, the inventory accumulation during this period was significantly lower, contributing only 2.6 percentage points to GDP growth compared to the 5 percentage points dragged down by imports [6][13][57]. - Monthly data indicates that the growth rate of U.S. imports has consistently outpaced that of inventory accumulation, suggesting a mismatch between import levels and inventory growth [19][57]. Group 2: Understanding the Discrepancy Between Inventory and Imports - The discrepancy between inventory accumulation and imports can be attributed to robust domestic demand and statistical lag in inventory reporting. In the first quarter, while inventory growth increased across most sectors, stable domestic demand, particularly in investment, kept the inventory-to-sales ratio relatively stable at 1.34 in March [3][23][57]. - Inventory growth typically lags behind import growth by about three months due to the time required for goods to be transported and recorded in inventory data. This suggests that the inventory levels are still on an upward trajectory [30][57]. - Since late 2024, excess imports of consumer goods have been sufficient to support approximately 1.3 months of consumption, raising concerns about potential impacts on retail pricing [31][57]. Group 3: Future of Import Demand - The momentum for U.S. imports is likely to diminish after the 90-day tariff suspension period ends, with key tariff deadlines approaching in July and August 2025. This could lead to a reduction in the urgency to import [4][35][57]. - Data suggests that inventory accumulation and weakening domestic demand may suppress future import needs. The second quarter may see a lagged increase in inventory growth, coupled with a marginal decline in domestic demand, potentially reducing import momentum in the latter half of the year [4][45][57]. - The level of "safe" inventory remains a source of uncertainty, influenced by trade policy fluctuations and inflation levels. If trade uncertainties persist, companies may opt to maintain higher inventory levels [48][59][57].