Trade war casualty
A bulk cargo ship sailed from the United States carrying $20 million worth of soybeans on June 8. It arrived near the northeastern Chinese city of Dalian on July 6, hours after new Chinese tariffs on US soybeans went into effect.
The vessel, the Peak Pegasus, owned by JPMorgan Asset Management, has been circling off the Chinese coast ever since.
The trade war between the US and China was erupting just as it left, with President Donald Trump imposing tariffs on billions of dollars’ worth of Chinese imports. The ship was due to deliver its 70,000-ton cargo on July 6 but missed the tariff deadline, arriving five hours after China imposed retaliatory tariffs on US soybeans.
The 47,000-ton, 750-foot-long bulk carrier has become a symbol of the consequences of the trade war between China and the US and caused a sensation on the Chinese social-media site Weibo, according to reporting in The Guardian, as it raced to make the port before the tariff deadline.
The cargo belongs to the agricultural commodity trading house Louis Dreyfus. The company is paying as much as $12,500 per day to continue chartering the ship. The 25-percent Chinese tariff on the soybeans adds $6 million to the cost of importing the commodities.
The US-China trade dispute shows no sign of abating, as the Trump administration announced this week that a new $16 billion set of tariffs would take effect August 23. China’s Commerce Ministry described the new tariffs as “very unreasonable practice,” and Beijing responded in kind as it has since the beginning of the war, with 25-percent tariffs on over 300 additional US products, also scheduled to take effect on August 23.