“President Trump’s trade policies are casting a pall over Europe’s economies,” Drewry said. “His aggressive crusade to protect American interests has been particularly hard on Germany, Europe’s largest economy, which has been bracing itself for a decision about whether Washington will impose tariffs on motor vehicle imports.”
Car parts move in large quantity from Europe to the U.S., and Drewry pointed to strong demand for luxury sport utility vehicles such as BMW’s X7 model, assembled in Spartanburg, S.C., where it said output is expected to increase from 356,750 units in 2018 to 400,000 in 2019, “generating additional volumes of parts from Europe.”
It also said that American importers and retailers have been increasing their stock levels of a wide range of goods — luggage, mattresses, cleaning products, sporting goods, camping equipment, shoes, clothing and consumer electronics — as there is some expectation that Americans may well be persuaded to buy ahead before inevitable price rises take effect.
Drewry said cargo moving from the U.K. to the U.S. has been up by more than 10% this year. “Commodities in most demand have been whiskey, gin, beer, salmon, chocolate, cheese and confectionary. The strength of this particular market is likely to have been fueled by U.S. importers wishing to avoid any disruption from Brexit, which was due to take place at the end of March.”
German chemical shipments also have increased because of a backload of orders that developed when low water levels restricted Rhine River barge traffic. Drewry said, “Levels at most locations are now back to normal for the time of year.”
Looking forward it said that “demand growth will struggle to stay much above 1% for the rest of the year. The dollar is unlikely to lose much value, but the more central problem is that European consumers are not currently in the mood to increase their spending given the gloomier economic outlook and unresolved Brexit issue.”