The Peak Pegasus left Seattle on June 8 with a a cargo of American soybeans destined for China. It was supposed to be a month-long voyage.
The ship is still at sea, still loaded with soybeans, drifting in circles off the coast of China—both a casualty and a metaphor for the trade war between the world's two largest economies.
The ship was closing in on its destination when China threatened to impose a series of retaliatory tariffs on American agricultural products, including soybeans. Over the next two weeks, the boat sprinted—to the extent that a fully loaded 47,000-ton cargo ship can sprint—toward the Chinese port of Dalian, hoping to clear customs before the new trade barriers took effect. On Weibo, China's Twitter-like social media platform, messages about the ship actually outnumbered posts about the then-ongoing World Cup soccer tournament.
But the Peak Pegasus didn't make it.
The ship was about 25 miles away from Dalian on July 6 when Beijing announced that the tariffs were taking effect. That announcement came just hours after the White House announced that it would put a 25 percent tariff on $34 billion worth of Chinese goods. The soybean-laden ship slowed, stopped, and turned around.
And for the past month, it has just kept turning.
A casualty of the #tradewar: Peak Pegasus, the US cargo ship carrying over $20m in soybeans, has been circling aimlessly at sea for a month after failing to beat the Chinese #tariffs deadline on July 6. The fate of the ship is still uncertain. pic.twitter.com/Fi4u0o85SB— Global Times (@globaltimesnews) August 9, 2018
The Peak Pegasus been drifting in circle in the Yellow Sea, waiting to hear what it should do with $20 million worth of soybeans. China's 25 percent tariff on American soybeans will increase the cost of buying the Peak Pegasus' cargo by about $6 million.
The cargo is owned by Louis Dreyfus, a Dutch commodities trading company. According to The Guardian, the company is paying about $12,500 per day to charter the ship, which means the extra month at sea has cost more than $400,000. Louis Dreyfus won't have to pay for the tariffs—tariffs are import taxes, and will be paid by whomever buys the soybeans in China—but trade barriers create other costs and unintended consequences.
Soybeans have been caught in the crossfire of the U.S.–China trade war because America is the world's largest exporter of soybeans—with nearly half the U.S. crop sent abroad annually—and China is the largest importer of them. There are few singular products that better illustrate the benefits of global trade between the world's two largest economies than the humble soybean.
But it's not just soybeans caught in the middle of the trade war. It's soybean farmers, international commodities companies, buyers and wholesalers in China who have had to find alternate suppliers, and of course the crew of the Peak Pegasus. Supply chains aren't just lines on a map and lists of goods—they're people too. The sad saga of the Peak Pegasus is a Darkest Timeline version of "I, Pencil," in which thousands of people all around the world who have never met one another are linked by the problems created by Washington and Beijing's trade barriers.
Perhaps the soybeans' owners were hoping to keep the ship at sea until the trade war comes to an end. If so, those hopes appear to have been dashed. This week, America imposed another round of tariffs on an additional $16 billion worth of Chinese goods, and China vowed to retaliate again.
And so the Peak Pegasus is finally heading to port. CGTN reports that the ship is now heading once again for Dalian. As the trade war escalates, it likely won't be the last ship to encounter unexpected troubles on what should be a routine trip with a mundane cargo.
Photo Credit: STAFF/REUTERS/Newscom