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Shipments of goods from China to the United States are experiencing a significant decline due to the imposition of steep tariffs by the Trump administration, prompting major U.S. retailers to express concerns regarding potential supply shortages.
The trade conflict between China and the U.S. has intensified recently, with both countries increasing import duties in a series of retaliatory moves. While some nations have been granted a 90-day reprieve on tariffs as negotiations continue, China remains unaffected by these pauses.
Current U.S. import tariffs on Chinese goods have reportedly reached as high as 145%, with China retaliating with tariffs up to 125% on American products.
At the Port of Los Angeles, along with the Port of Long Beach—responsible for about 40% of all imports from Asia—there has been a 10% drop in shipments compared to the same timeframe last year, and this trend is anticipated to persist. Eugene Seroka, executive director of the Port of Los Angeles, noted during a recent harbor commissioners meeting that cargo flow is slowing, predicting a 35% decrease in arrivals within the next two weeks.
Prior to the implementation of Trump’s tariffs, U.S. retailers had rushed to import goods, resulting in a spike in shipments since the previous summer. However, with the tariffs now making Chinese products significantly more expensive—approximately two-and-a-half times their previous cost—Seroka indicated that shipments from major retailers and manufacturers have effectively ceased.
According to Flexport, a supply chain management firm, container bookings from China to the U.S. have plummeted by as much as 60%. In contrast, bookings from other Asian nations like Vietnam and Thailand have increased by 5% to 10% as exporters seek to mitigate the impact of tariffs by shifting production away from China.
This slowdown in bookings is occurring during a traditionally busy period for importing goods into the U.S., noted Nathan Strang, director of ocean freight at Flexport. He explained that this time of year typically marks an uptick in shipments, particularly of back-to-school and Halloween products.
Retailers may have enough inventory to last several months, according to Seroka, but there is a likelihood that stock may become limited by summer. The throughput at the Port of Los Angeles includes a variety of goods crucial for households across the country, with top import categories being furniture, auto parts, clothing, plastics, and footwear.
Potential for Empty Shelves
Both large and small retailers are warning that consumers might soon face inventory shortages directly resulting from tariff policies. Products that do make it to store shelves will likely come with increased prices, reflecting tariff-related surcharges.
In a recent blog post, Torsten Sløk, chief economist at Apollo Global Management, stated that these tariffs could lead to empty shelves in U.S. stores within weeks, resulting in COVID-like shortages for consumers and businesses reliant on products from China.
Last week, Walmart and Target’s CEOs communicated to President Trump that his tariffs could create significant gaps in store inventory if they are maintained. Walmart described their meeting as constructive, emphasizing the opportunity to provide insights on the situation.
Target expressed similar sentiments, noting their commitment to ensuring value for American consumers while discussing the pathway forward on trade issues.
Both companies have previously voiced their concerns about potential price increases resulting from the tariff policies. Walmart’s CFO, John David Rainey, admitted that while they prefer not to raise prices, they may have to in certain cases. Target CEO Brian Cornell also warned that consumers might see price hikes in the coming days due to the tariffs on imports from Mexico.
Booking Freezes Across the Industry
Logistics companies are also reporting a sharp decline in cargo shipments from China. According to container tracking service Vizion, booking volumes from China to the U.S. experienced a 45% drop in mid-April compared to the same period last year.
This drastic decline coincides with two significant tariff announcements in early April, which led shippers to reassess their strategies during the mid-shipment cycle, resulting in a widespread booking freeze.
Freightos, a freight booking platform, noted that many carriers are canceling sailings from China due to the inability to fill their vessels with goods. The cost of ocean containers has dropped notably, from $8,100 in July 2024 for a standard 40-foot container to approximately $2,327.
Importers are choosing to halt shipments as they await further clarity on tariff decisions. A survey conducted by Freightos of 195 small importers revealed that 33% are planning to pause shipments in response to the tariffs. Kristin Bear, owner of Kilo Brava, a U.S.-based lingerie company, expressed hope that Trump will reconsider his tariff stance, stating that the existing 145% tariffs are prohibitive for her business, and without relief, she may have to close her doors.
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