Visitors to Hong Kong’s port might need a reminder that they’re standing in no man’s land of the U.S.-China trade war. Each day, hundreds of staff stream in and out, while trucks and cranes creak, squeak and clang moving shipping containers — a cacophony of  global commerce.

The world’s trade lanes and the companies that use them are undergoing seismic shifts in the places that steadily grew over the years with the march of globalization. To observe the realignments, Bloomberg last month dispatched reporters to ports, factories and border crossings around the world.

An obvious place of interest was Hong Kong’s shipping terminal, one of the world’s largest and a key junction for Made-in-China goods to the rest of the world. Probably better known as a finance hub, Hong Kong is a place where trade and logistics make up for more than 20% of the economy, employing 6,000 directly and almost 200,000 indirectly.

Both Hong Kong and its port are caught between the trade and geopolitical tensions hobbling the world’s two biggest economies. That precarious position has raised questions about its future relationship with Beijing and the rest of the world.

Pessimists say Hong Kong’s role as a shipping route for China is stuck in a downward spiral. Optimists say it’s a storm that will pass. Either way, U.S. tariffs have hurt volumes of goods shipped through Hong Kong as supply chains get redirected. Slower global demand and rising competition are also impacting.

Fresh evidence arrived Thursday. Hong Kong’s exports last year fell 4.1% — their biggest annual decline since 2009 — and imports contracted 6.5%.

A port executive we spoke to explained the new uncertainty that is swirling around global trade even with a U.S. and China phase-one agreement. We followed up by speaking with some toy manufacturers — including a world class yo-yo instructor — that continue to worry about tariffs and why they are mulling alternatives for their supply chains.

The picture painted for Hong Kong’s role is a sober one. The port continues to hold onto its status as one of the 10 largest anywhere. But climbing up that table is going to be a challenge that’s the subject of this week’s Stephanomics podcast, where we share more of the the sights and sounds from this key crossroads of international trade.

Charting the Trade War

Purchase targets in the Beijing-Washington trade deal would boost U.S. exports of goods and services to China from roughly $160 billion in 2019 to $309 billion in 2021 — a near-doubling of exports in two years, with the bulk of the increase reached in 2020. If these ambitious targets are met in full, and wholly reflect increases in volumes — not prices — the expansion of trade would amount to a contribution in excess of 50 basis points to GDP growth in 2020, and 10-20 points in 2021. There are reasons to discount the full impact, according to research by Bloomberg Economics.