Dive Brief:
- A U.S. cargo ship carrying soybeans from Seattle to the Port of Dalian in China has finally docked at its destination after more than a month, Reuters reported.
- The ship, carrying $34 million in U.S. soybeans, had become the central image demonstrating the uncertainty that the U.S. trade war with China has wrought — as it slowly drifted in circles offshore.
- If and when the Pegasus is unloaded, it will likely be the first shipment of U.S. soybeans to incur the 25% tariff imposed by China on July 6.
Dive Insight:
The tit-for-tat nature of the Trump administration's trade war with China has sent companies scrambling to beat not only the implementation of tariffs already announced, but also the inevitable retaliations to come. Peak Pegasus rushed to reach China before the 25% tariff on soybeans kicked in but missed the deadline by just 30 minutes, according to some reports.
As the Peak Pegasus drifted near Dalian, the Trump administration announced yet another batch of tariffs. The latest round will kick in August 23, affecting $16 billion worth of imports from China. China responded in kind and said it will impose tariffs on $16 billion worth of imports from the U.S. in 333 categories.
Another ship, the Star Jennifer, also carrying U.S. soybeans has been docked off the coast of the Port of Dalian since July 24.
In the case of Peak Pegasus, the Chinese government grain reserves manager Sinograin agreed to pay the tariffs, roughly $6 million, to the dismay of Chinese taxpayers, according to Business Insider. The cargo belonged to Dutch trading house Louis Dreyfus and the ship is owned by JPMorgan Asset Management.
Sinograin said that the five-week delay was due to port congestion. Dalian port officials told Reuters they had not seen major backlogs since June, though.
U.S. soybean trade with China totaled $12.7 billion in 2017 and though analysts are not yet predicting that trading volumes will decrease, financial indicators suggest that soy meal prices within China may rise.
