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Retailers are canceling shipments and halting new orders from China due to steep new tariffs.
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A 33% drop in vessel arrivals at the Port of Los Angeles is expected, risking product shortages ahead of key shopping seasons.
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Consumers may face empty shelves and higher prices, particularly for lower-cost goods like footwear, apparel, toys, and electronics.
US retailers are warning that consumers could once again face empty shelves and supply chain disruptions reminiscent of the Covid-19 era. In response to the newly imposed 145% tariffs on nearly all Chinese imports, companies have been canceling shipments and freezing new orders. Port Optimizer data shows that the number of freight vessels scheduled to arrive at the Port of Los Angeles is projected to fall by 33% year-over-year for the week ending May 10, as reported by NBC News.
Critical Ordering Periods Under Threat
Typically, retailers would be ramping up purchases in preparation for the back-to-school season and the winter holidays. However, the current uncertainty around tariffs is complicating inventory planning. As Jonathan Gold, Vice President of Supply Chain and Customs Policy for the National Retail Federation, explains, making holiday buying decisions has become increasingly difficult amidst fluctuating costs.
Profitability Pressures and Rising Consumer Prices
Under the current tariff structure, a US-based company would need to pay at least $145 in tariff fees to import a product worth $100, excluding certain items like electronics and pharmaceuticals which are taxed at lower rates. These fees threaten to eliminate profit margins, forcing companies to either sell products at a loss or raise consumer prices to potentially unaffordable levels.
Vendor Reports Highlight Halted Orders
Reports from Chinese vendors indicate that American retailers, including major chains, have paused their orders. One vendor, who supplies press-on nails to US stores, noted that her goods are ready but remain stuck in China, with no expectation of shipping during the first half of the year.
Projected Import Declines and Product Shortages
The National Retail Federation projects a 20% decline in imports during the second half of the year if tariffs persist. Products most likely to vanish from shelves include low-cost footwear, apparel, toys, and electronics — sectors heavily reliant on Chinese manufacturing. Perishable imports such as apple juice and fish also face stockpiling challenges due to their limited shelf lives.
Retailers Sound Alarms Over Potential Shortages
Industry experts are warning that the US could soon experience shortages similar to those seen during the pandemic. Sean Stein, President of the US-China Business Council, cautioned that if action is delayed until shortages and consumer hoarding begin, it may already be too late to avoid widespread disruption.
Possible Tariff Reductions Being Considered
In response to growing concern from retailers — particularly regarding potential shortages during key holidays like the Fourth of July and Christmas — the administration is reportedly considering tariff reductions. While larger retailers had been able to accelerate shipments in advance of the tariffs, smaller businesses without the same financial flexibility are expected to feel the strain much more acutely.
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Source: NBC News
