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By Casey Hall
SHANGHAI (Reuters) -China-based shipping agents have resumed buying container space for goods headed for the United States after a series of U.S. tariff-induced cancellations, as Beijing and Washington head for trade talks in Switzerland.
Trade between the world's two largest economies has slumped since U.S. President Donald Trump imposed 145% tariffs on China-made goods on April 10, a move which prompted China to impose levies of 125% on U.S.-made products.
The U.S. tariffs, which affect an estimated 80% of goods shipped from China to the U.S., prompted sailings from China to the U.S. to drop 60% in April, according to Flexport, a logistics and freight forwarding broker. Customers from logistics operator Hapag-Lloyd cancelled 30% of shipments from China last month.
Since late April, however, traders have stepped up buying of shipping capacity, locking in space from mid-May, according to two China-based executives with freight forwarding firms who declined to be named as they weren't authorised to speak to the media.
Four China-based exporters, some serving large U.S. retailers such as Walmart, also told Reuters they were preparing to restart shipping goods to the U.S. in the coming weeks, a previously unreported development.
With the U.S. and China adopting more conciliatory language on trade since late April, and officials due to begin trade talks in Geneva on Saturday, exporters are hopeful that the two countries will soon move to lower tariffs.
In the latest sign that rates might be eased, Trump said on Thursday that a reduction from the 145% rate was likely.
"We are obviously all looking forward to a relaxation of the (tariff) situation this month. I believe it will happen," said Liu, a second-generation toy manufacturer from the southern export hub of Dongguan who declined to give her full name for privacy reasons.
Until recently, half her orders came from U.S. customers including Walmart, she added.
EMPTY SHELVES?
But it's not just optimism that tariffs might fall that's fuelling the shipments.
Goods such as toys, home furnishings and Bluetooth speakers that U.S. retailers cannot quickly or easily source from places other than China have been stuck in China while the stores try to wait out the tit-for-tat tariff escalation.
If those products are not shipped by June, shelves in the U.S. will begin to empty, Chinese exporters told Reuters.
"Companies are running out of inventory and Trump has toned down his China talk," said Jonathan Chitayat, the Asia boss of Genimex Group, a contract manufacturer whose firm works with clients to design and engineer custom mechanical, electronic and consumer goods from bluetooth speakers to rubbish bins.