China’s ports see record traffic ahead of U.S. tariffs and holiday

China’s busiest port processed a record amount of goods in January, as companies rushed to get their products onto ships before U.S. tariffs kicked in and ahead of a long local holiday.

Shanghai’s port processed a record 5 million containers last month, according to data released Monday, well above any previous month in data going back to 2007.

Chinese firms shipped almost $525 billion worth of goods directly to the U.S. last year, the third-highest tally on record. However, since these companies have increasingly shipped products via nations such as Mexico and Vietnam to the U.S., President Donald Trump’s possible imposition of tariffs on all imports could affect that trade too.

Since that record last month, the U.S. has imposed new tariffs on all goods from China, making such shipments more expensive. China has retaliated with its own tariffs coming into effect from Monday, although they were only imposed on a small fraction of imports from the U.S.

The data from Shanghai likely includes some domestic cargo, but the data show that nearby Ningbo port also saw a spike in cargo. It reported 59 million tons in foreign trade processed at the port last month.

Despite the record, trade flows slowed in the last week of January and the first week of February, according to separate government data, as companies shut down for more than a week during the Lunar New Year holiday.

Some firms restarted work beginning late last week but there won’t be any official trade data released until early March, as the government combines the first two months of data to smooth out the volatility around the holiday.

Bloomberg Economics estimates an additional 10% levy could knock out 40% of Chinese goods sent to the U.S. , jeopardizing 0.9% of China’s gross domestic product.