U.S. imports started 2018 with a bang after seaborne imports rose 8% on a year earlier, the fastest since April. The main driver was a 10% surge in shipments from China, continuing a run of growth going back to February, though shipments from India and Thailand grew rapidly too. All major product groups tracked by Panjiva saw an improvement for the first time since February 2016, with the most notable being toys (up 13% after beating a seasonal downturn) and machinery/electronics (up 12%). Continued strength is possible due to tax reform, consumer sentiment and (as yet) few tariffs from the Trump administration.

U.S. imports opened 2018 with a bang, Panjiva data shows, with seaborne shipments in January having risen 7.7% on a year earlier. That was the fastest rate of growth since April, and well ahead of the 4.1% recorded for 2017 as a whole. It also comes after a record year for U.S. imports in aggregate, as outlined in Panjiva research of February 26, which in turn led to a record trade deficit.

Chart shows U.S. seaborne imports. Lower panel indicates year-over-year change. Source: Panjiva

Among the main supplier economies a 10.3% jump in shipment from China was the main driver, and continues a run of growth going back to February. That growth may continue in the coming month as the lunar new year holiday is later this year, and so will only cut shipments leaving from mid February rather than late January.

Exports from developing economies with expanding manufacturing sectors continued, with shipments from India having increased by 15.2% while those from Vietnam improved by 13.3%. The more mature markets of Taiwan (down 1.2%) and Japan (off by 0.2%) lost out, though the European Union continued to grow its shipments to the U.S. with a 4.9% improvement.

Chart segments U.S. seaborne import growth by country of origin. Source: Panjiva

All the major product groups tracked by Panjiva saw growth for the first time since February 2016. Autos were the slowest at 2.7% while toys (13.0% higher, beating the seasonal lull) and machinery / electronics (up 12.2%) being the fastest. That likely reflects three major factors which may remain supportive for imports for the next couple of months at least.

American business confidence remains high after the tax reform, leading suppliers to expect an increase in investment. Consumer confidence has begun to slip from 10 year highs according to Bloomberg, though spending growth has continued.

Third, while the Trump administration has begun to implement tariffs on imports these have yet to be widespread, with only washing machines and solar panels seeing significant moves so far beyond normal anti-dumping cases.

Chart segments U.S. seaborne import growth by product category (HS-4). Source: Panjiva