When the Covid pandemic met, the factories slowed down in China and global shipping traffic. Within a few weeks, products from US branches and American companies that were dependent on foreign materials disappeared.
A similar trend begins to play, but this time the catalyst is the decision of President Trump to increase the tariffs for Chinese imports to at least 145 percent, which has such a steep amount of trade between the United States and China. Less massive container ships have planned the ocean between Chinese and American ports, and far fewer Chinese goods will arrive on American banks in the coming weeks.
While high tariffs have been available for Chinese products since the beginning of April, the availability of Chinese products and the price that consumers pay for them has not changed so much. But some companies are now starting to increase their prices. And experts say that the effects in the coming weeks are becoming more and more obvious, since a flood wave of change, which result from canceled orders in Chinese factories, moves to the United States all over the world.
The number of solid container ships with metal boxes with toys, furniture and other products that violate China for the United States has dropped by about a third this month.
The reason why consumers have not yet had many effects is that it takes 20 to 40 days for a container ship to drive over the Pacific. It then takes another up to 10 days for Chinese goods to get in the way of the train or truck to different cities across the country, and the economists of Apollo Global Management wrote in a recent report. This means that the higher tariffs in China, which came into force at the beginning of April, just lead to a decline in the number of ships in American ports, a trend that should intensify.
Consumers were able to see some empty shelves by the end of May or early June, and layoffs can occur for retailers and logistics industry. The main effects on the US economy of closing the trade with China will be obvious in the summer of 2025 if the United States could get into a recession, said Torsten Slok, economist at Apollo.
“Within a few weeks, the US consumers will see empty shelves in clothing transactions, toy transactions, hardware shops and drugstores in retail as well as higher prices for the goods that are still on the shelves,” he said.
Molson Hart, the managing director of Vilehart, a toy company, wrote to X: “It is almost as if we are accelerating to a brick wall, but the driver of the car does not see it yet. If he does it, it will be too late to meet the brakes.”
The decline in Chinese imports will be reinforced on Friday when the United States remove the so-called de-minimis treatment for Chinese goods. The rule has enabled the products of up to 800 US dollars to avoid tariffs as long as they are sent directly to consumers. It has increased the business model of companies such as Temu and Shein, and it has led to an increase in the individually mentioned packages to the USA, many of which are sent by Air.
Followers of the change say that this tariff gap of Chinese publishes has given an unfair advantage and violated American companies. The decision to get rid of this already leads to higher prices for US consumers. And the change is expected to weigh airlines and private airlines such as Fedex that deliver steady business for small dollar goods.
Port workers and logistics companies expected their own disorders. In the port of Los Angeles, the main starting point for Chinese products in the USA, imports have increased in the past few months when companies and consumers attempted to stock up on the tariffs that came into force. But this activity has now started.
The number of containers that arrive in the port of Los Angeles will probably decrease by more than 35 percent next week compared to the same period of the previous year as port data. Gene Seroka, the executive director of the port, said that a quarter of the ships planned for May canceled due to the light volume.
From about two weeks ago goods that come from China to the port, “very few,” said Seroka.
Data show that the sale of heavy trucks has also fallen strongly, which indicates that companies in the logistics room expect to move fewer goods in the future.
Trading experts say that companies have had enough inventory in stock in the past few months if the White House soon reversed the course and significantly reduces the tariffs to China, the pain for the US economy and consumers can be avoided. Data from the Institute for Supply Management show that US stocks have been at the highest level for more than two years.
Gabriel Wildau, Managing Director of Teneo, who advises companies for business with China, said that the Chinese goods, the US retailers have in store for some time in the first three months of the year before they would have to increase prices. However, if the situation does not change quickly, American consumers will feel that the effects of trading changes will develop in the next three to six months, he said.
“We will have higher prices and in some cases there are empty shelves,” he said.
Trump officers have admitted that there could be some disorders for consumers. The President seemed to recognize on Wednesday that his trading changes could be less and higher prices.
“You know, someone said:” Oh, the shelves will be open, “said Mr. Trump from the White House.” Well, maybe the children have two dolls instead of 30 dolls, do you know? And maybe the two dolls cost a few dollars more than normally. “
However, the administrative officials said that pain will be minimal. At a briefing of the White House on Tuesday, Scott Bessent said that the finance minister said that he did not expect the supply chain shocks of US tariffs for China. “I think retailers have made their inventory in front of it,” he said.
Some companies that are in a more fragile financial position could not store and are quickly forced to be forced from business. Even if the Trump government finds a way to reduce its tariffs in China, it is not clear that the taxes will fall enough to restart the trade sensibly.
Many companies say that tariffs over 50 percent are sufficient for Chinese imports to completely stop trading. Since the tariffs are now at least 145 percent and in some cases much higher, this would cause the Trump government to drop its China tariffs by at least 100 percentage points in order to restart the flow of goods sensibly.
Trump's officials have announced that the current tariff rate at China is not sustainable, but they have concerns about Chinese trading practices, and they will be under pressure to prove that they have secured considerable concessions from China to drop their tariffs.
Ryan Petersen, the managing director of Flexport, a supply chain company, said that the tariffs that had led the Trump administration in China in China are still high, at least 54 percent before the president had thrown the tariff in China to 145 percent this month.
“The reality is that 54 percent were already an incredibly high tariff rate,” said Petersen. “It depends on how far you go. If you go back to 25 percent, it may be a non-event.”
With so much unclear about where global trade leads, companies freeze their plans for expansion and stop new orders.
Data show that new orders were strongly rejected by manufacturers this year, while companies have cut their plans back for investments. Some large companies have discontinued instructions for their sales and profits. Mercedes-Benz suspended his financial forecasts for 2025 on Wednesday, as well as Stellantis, which makes the brands of Chrysler, Dodge and Jeep.
It is not clear how quickly the current challenges of the supply chain could be solved. During the pandemic, the disorders of the supply chains took much longer to work through the economy than most prognostics expected.
Economists, who initially expected the price increases were transparent, were surprised that the inflationary pressure, which had lingered for years. Small effects also had a way to cut through supply chains – for example, a disturbance of the supply disorders from one or two companies that produced small parts for cars or other machines could stop a large production facility that found that it had no alternative to the part.
And when the economy penetrated again after initial pandemic disorders, the process was not smooth. The Americans saw stacks in the ports and bottlenecks of some goods that ultimately contributed to higher prices.
Mr. Petersen said that companies that operated container ships had already canceled a quarter of all sails in the USA from China and surround their ships to Southeast Asia and Europe. Even if the Trump government eliminates its Chinese tariffs and the US consumer demand for Chinese products, ships will not be in the right place immediately to carry the same volume of goods, he said.
“You will see high prices, you will see delays,” Petersen added. “The longer you wait to make changes, the more serious the shock will be.”
Danielle Kaye contributed to the reporting.