Trade and Tariffs

Presenter: Ms. Tong ZhuChief Commercial Officer & Chief Strategy Officer

Item No.: 2ADate of Meeting: September 3, 2019

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2017 2018 2019

JAN 2018: Tariffs imposed on imports of solar panels & washing machines

MAR 2018: Tariffs imposed on imports of steel & aluminum

JUL 2018: Tariffs imposed on $34B of Chinese imports

AUG 2018: Tariffs imposed on $16B of Chinese imports

SEP 2018: 10% tariffs imposed on $200B of Chinese imports, to increase to 25% by Jan 1, 2019.

DEC 2018: Volume surge ahead of 25% tariff to be imposed on $200B of Chinese imports

MAY 2019: Increase from 10%-25% tariffs on $200B of Chinese imports

JUN 2019: US threatens tariffs on $300B of Chinese imports

2018

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N E A S I AS E A S I A

Monthly Imports from Asia to NWSA (TEUs, Jan 2017-Jun 2019)

Source: PIERS (Foreign Full TEUs)

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2017 2018 2019

APR 2018: Retaliation for US Section 232 tariffs

JUL 2018: Retaliation for US Section 301 tariffs ($34B)

AUG 2018: Retaliation for US Section 301 tariffs ($16B)

SEP 2018: Retaliation for US Section 301 tariffs ($60B)

JAN 2019: Suspension of retaliation for US Section 301 tariffs against autos and parts

2018

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N E A S I A

S E A S I A

Monthly Exports from the NWSA to Asia (TEUs, Jan 2017-Jun 2019)

Source: PIERS (Foreign Full TEUs)

JUN 2019: Retaliation for US Section 301 tariffs ($60B)

Asian Tigers on the Move

46,686 58,28778,014 71,434 88,879

38,66539,762

46,808 45,039

63,61834,240

32,436

45,62242,289

58,165

33,55830,958

35,30933,709

39,118

28,774 24,906

28,13927,845

31,608

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2014 2015 2016 2017 2018

VIETNAM THAILAND INDONESIA MALAYSIA PHILIPPINES

Source: PIERS (Foreign Full TEUs)

SE Asia - NWSA Direct Call & Transshipment-Connected Ports

• Transit time and transport cost drive routing decisions

• Multiple options available via East Coast (via Suez) and transpacific services

• Port infrastructure in emerging markets limits opportunities for direct port calls

• Inter-regional feeder ship service between local and transhipment ports drives the local trade

NWSA Strategies and Initiatives

• Explore opportunities with shipping lines to expand on the number of SE Asia services and direct ports of call

• Develop programs to retain and grow IPI cargo and recapture market share

• Develop programs to improve gateway efficiency

• Intensify efforts to promote the NWSA gateway to supply chain partners for SE Asia and other markets