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In response to the impending implementation of tariffs, U.S. imports surged in January as businesses moved quickly to secure goods before higher costs took effect. The 12.5% month-over-month (m/m) increase in seasonally adjusted goods imports (upwardly revised from the advance data released initially) was the largest single-month increase on record, beating out the July 2020 jump of 12.1% that obviously was an outlier due to the extraordinarily low base coming out of COVID lockdowns. The level of imports in January also was at an all-time high.
More comprehensive Census Bureau data released on March 6 highlights a dramatic increase in industrial supplies – specifically metal products – due to impending tariffs on steel and aluminum, which are scheduled to take effect March 12. Those are on top of 10% additional tariffs on Chinese imports that took effect February 4 (and another 10% imposed on March 4) as well as broad 25% tariffs on imports from Mexico and Canada that were supposed to kick in February 4 but ultimately were pushed off until March 4 (except for automotive, which got another month-long reprieve).
Industrial Supplies Imports Skyrocket
The most striking development in January was a 34.3% m/m increase in industrial supplies imports (upwardly revised in the final data from the initial 32.7% increase), following a very strong 19% rise in December.
The surge in industrial supplies imports was due to a category called “finished metal shapes,” or what we could call fabricated metal products. December saw a 202% increase in imports of finished metal shapes, an unprecedented jump that tripled November’s import value. Then, imports of finished metal shapes soared another 149% m/m in January.
The upshot? January imports of finished metal shapes were an astounding 651% higher than in November.
Numerous other industrial supplies categories saw what would in normal times be extraordinary gains m/m in January, but none of them come close to finished metal products in either percentage gains or in absolute dollar value.
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This article was created from an excerpt from FTR's weekly Trucking podcast with Avery Vise.
Broader Import Growth Across Categories
Beyond industrial supplies, January was generally a strong month for goods imports with seasonally adjusted gains in all major categories:
- Consumer goods imports rose 8.3% m/m.
- Capital goods imports increased 5.5% m/m.
- Foods, feed, and beverages imports moved up 4.3% m/m.
- Automotive vehicles, parts, and engines were up 2.3% m/m.
Goods exports also rose, but only by 1.6% m/m.
Strong Imports From Key Trading Partners
The three largest sources of imports – Mexico, China, and Canada – also saw healthy m/m increases in exports into the U.S. Among those three countries, the strongest m/m gain in seasonally was from Canada, which was up 10.9%. Imports from China rose 8.1%, while imports from Mexico were up 6.3%. While all were big gains, none were close to a record increase.
What Goes Up…
Whether it happened in February or is happening now, we can comfortably presume a massive hangover following this prolonged bender. Warehouses across the U.S. surely are chock-full of fabricated metal components, and the supply chain will be working off this inventory build for some time.
The scale of these import increases obviously underscores the impact of trade policy changes on supply chain behavior and the broader freight market.
