US ocean container imports tumble in May as China tariffs take hold
LOS ANGELES, June 9 (Reuters) - U.S. seaborne imports of goods from China dropped 28.5% year-over-year in May, the sharpest decline since the pandemic, as President Donald Trump's 145% tariffs took hold, supply chain technology provider Descartes (DSG.TO), opens new tab said on Monday.
China is the top U.S. supplier of goods that enter through seaports, including the nation's busiest in Los Angeles/Long Beach. Domestic businesses ranging from retailer Walmart (WMT.N), opens new tab to automaker Ford (F.N), opens new tab depend on those goods to operate.
Ports on the U.S. West Coast handle the greatest share of trade with China and experienced significant volume declines in May with Los Angeles, Long Beach and Tacoma, Washington, down 18.4%, 22.4% and 25.6%, respectively, Descartes data showed.
Overall U.S. seaborne imports in May tumbled 7.2% from the year earlier to 2.18 million 20-foot equivalent units - snapping a streak of near-record increases fueled by companies frontloading goods to avoid higher duties.
The United States and China agreed to a 90-day pause on punitive tit-for-tat tariffs last month. U.S. and Chinese officials met in London on Monday to defuse the high-stakes trade dispute between the world's largest economies.
Port executives and shipping consultants expect volume from China to rebound during the tariff truce, albeit at a more moderate level.
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If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Good vibrations turn sour It's a "done" deal, according to U.S. President Donald Trump, although the he and Chinese leader Xi Jinping still have to finalize the wording of the trade agreement between the two superpowers and sign off on it. The main points of the deal appear to be: China will remove export restrictions on rare earth minerals and other key industrial components; U.S. tariffs on Chinese goods will total 55%; Chinese tariffs on U.S. goods will total 10%. Trump could not have been more enthusiastic in his praise for the agreement on Wednesday, and Commerce Secretary Howard Lutnick said 'deal after deal' with other countries will follow in the weeks ahead. Yet, judging by the relatively muted market reaction, investors are less enthused. 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What proportion of the tariffs will companies "swallow", and how much will they pass on to their customers? Zooming out, inflation appears to be cooling around the world, although this trend is expected to reverse once tariffs start to fuel higher goods price inflation. Figures on Wednesday showed that U.S. consumer inflation and Japanese wholesale inflation were lower than expected in May. These reports follow similar numbers from Europe recently, and China remains stuck in its battle against deflation. Next up is India, which releases consumer inflation figures on Thursday, which are expected to show annual inflation slowed to 3.0% in May, the lowest in more than six years. Another focus for investors on Thursday will be the auction of 30-year U.S. Treasury bonds. US stocks-bonds warnings flash amber again Calm has descended on U.S. markets following the 'Liberation Day' tariff turmoil of early April. 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"A mean reversion to a higher equity risk premium typically involves a bond rally, an equity sell-off, or both." But reversion to the mean doesn't just happen by magic. A catalyst is needed. Equities have recovered largely because they were oversold in April, trade tensions have been dialed down, and investors remain confident that Big Tech will drive solid AI-led earnings growth. So even though huge economic, trade, and policy risks continue to hang over markets, there is no sign of an imminent catalyst that would cause an equity market selloff. The flip side of equities looking expensive is that bonds look like a bargain. Indeed, the relative divergence between stocks and bonds is such that, by one measure, U.S. fixed income assets are the cheapest relative to equities in over half a century. 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Trump's 'Big Beautiful Bill' is expected to add $2.4 trillion to the U.S. debt over the next decade, according to the nonpartisan Congressional Budget Office, likely putting more upward pressure on yields. Of course, equity investors do seem to be pricing in a very rosy scenario, and the past few months have shown how quickly the market landscape can change. The U.S. economy could weaken more than expected, the trade war could escalate, or there could be a geopolitical surprise that causes bond yields and equity prices to fall. Investors should therefore be mindful of the warnings being sent by ERPs and other absolute and relative valuation metrics. However, they should also remember that stretched valuations can get even more stretched. As the famous saying goes, markets can stay irrational longer than investors can remain solvent. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
