Global shipping is grinding to a standstill. It's a matter of time until Americans feel it.

Mint

07-05-2025

There aren't shortages of goods in U.S. stores yet, but if the deterioration in global shipping is any indication, they are on the way. That could complicate the White House's pleas for Americans to be patient as trade officials rush to strike dozens of deals.
Cargo has dropped, or is expected to, at major ports including those of Los Angeles; Long Beach, Calif.; and New York-New Jersey, primarily on shipments from China, which exports more than any other country to the U.S.
U.S. import booking volumes have dropped 35% since late March, according to the shipping data company Vizion, including a 26% drop between the week ended April 21 and the following week. Shipments from China dropped nearly 43% in the last full week of April, the sharpest decline of the year. During April, several weeks saw China import bookings down by more than half, Vizion said.
The potential impact on companies and consumers is broad. Imports of Chinese electronics, plastics, vehicles, steel, and textiles have all fallen by more than half.
Perhaps just as concerning for some farmers and U.S. manufacturers is that export bookings to China have also collapsed. In the last full week of April, the number of 20-foot-equivalent containers booked to go to China fell 73% from a year earlier, the fourth consecutive week with at least a 60% drop, Vizion said. That is despite U.S. exports staying relatively strong overall.
China's major imports from the U.S. include soybeans and other grains, oil and gas, and semiconductors, among other electronics components.
The recent export decline is 'raising concerns for our agricultural and manufacturing partners as continued tariffs on exports begin to really take effect," said Eugene Seroka, executive director of the Port of Los Angeles, at a port board meeting at the end of April.
Major trade routes have been upended by President Donald Trump's April 2 announcement of enormous tariffs on imports. Trump suspended most of the 'reciprocal" tariffs for 90 days a week later, but let tariffs against China go into effect, eventually raising them to 145% for most products. China retaliated with tariffs of its own.
Now, trade officials are rushing to strike preliminary agreements with other nations before the pause is lifted in July.
Americans' expectation of pain is causing political problems for Trump even though they haven't yet resulted in higher prices. About 43.5% of Americans approve of the job Trump is doing, compared to 51.8% who disapprove, according to a polling average by newsletter Strength in Numbers. That gap is about six percentage points wider than it was when Trump made the tariff announcement.
White House officials have said that Americans need to 'Trust Trump" as he negotiates with trading partners.
'The administration is both delivering short-term economic relief from inflation while laying the groundwork for a long-term economic resurgence," a White House official told Barron's in an email on Tuesday, pointing to recent declines in inflation and a surge in imports in the first quarter as companies sought to avoid tariffs.
Trump in the Oval Office on Tuesday told reporters that Chinese officials 'want to meet" with the U.S. to discuss trade.
The problem for the White House is that shipping activity indicates that pain for consumers is on the way.
In addition to reporting falling bookings, shippers have been cutting rates and capacity on major lines. Capacity between Asia and the U.S. East Coast is down 22% in April and 18% in May from what had previously been scheduled, while capacity between the Asia and the West Coast is down 20% and 12% in April and May respectively, according to the maritime research firm Drewry.
'The shipping lines are trying to balance collapsing Asia-to-U.S. demand with their capacity both by cancelling dozens of sailings and by ending entire weekly services," said Philip Damas, head of Drewry Supply Chain Advisors, in a company video on Monday.
Container ships take about a month to arrive in the U.S. from Asia, and another 15 days to make it to the East Coast. Products can take another couple of weeks to make it from the port to trucks and, eventually, to store shelves.
Companies have been able to see some of the trade threat coming for weeks, giving them the opportunity to stock up on inventory ahead of time to avoid the taxes.
So it could be mid May before consumers start to see the full effects of Trump's April 2 announcement of heavy tariffs against China.
The first effects of the tariffs are likely to show up in the consumer-price index report for May, which comes out on June 11, said analysts for TD Cowen in a research note on Monday. 'The bulk of the impact could come over the summer, as businesses and retailers start running out of low-cost inventories," the analysts said.
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