The impact of President Trump’s tariffs is indeed causing significant disruptions to shipping patterns, particularly concerning shipments from China to the U.S. West Coast, reports CNBC.
Drop In Volume
Gene Seroka, the executive director of the Port of Los Angeles, delivered a stark warning, projecting a significant decline in incoming cargo volume. He anticipates a drop of over 35% next week compared to the same period in 2024.
Seroka attributed this “precipitous drop in volume” to major American retailers halting all shipments from China in response to the recently imposed tariffs. He noted that shipments from China constitute approximately 45% of the Port of LA’s business. While some transport companies might explore picking up goods from other Southeast Asian locations to compensate, Seroka expressed a pessimistic outlook for the near future.
“Realistically speaking, until some accord or framework can be reached with China, the volume coming out of there — save a couple of different commodities — will be very light at best,” he stated.
Adding to concerns about reduced trade flow, Seroka also anticipates that roughly a quarter of the usual number of arriving ships to the port will be canceled in May.
These projections follow President Trump’s announcement on April 2nd of a sharp increase in tariffs on Chinese goods, which triggered retaliatory measures from Beijing. Consequently, both the U.S. and China have now imposed tariffs exceeding 100% on many goods from each other. While U.S. Treasury Secretary Scott Bessent has labeled the situation as “unsustainable,” there have been no significant signs of renewed negotiations between the two nations.
Data preceding these tariff hikes had already indicated a slowing trend in trade volume from China to the U.S., raising alarms among some economists. Torsten Slok, the chief economist at Apollo Global Management, recently outlined a scenario where decreased imports from China could lead to layoffs in the U.S. transportation and retail sectors, resulting in empty shelves and a potential recession this summer.
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Source: CNBC
