Interesting Times

April 30, 2025: The impact of trade tariffs with China is starting to come into focus. Anecdotal information shows that trade between the U.S. and China may be about to slow down dramatically.

Bloomberg reports that May container shipments from China, which is facing a tariff of 145%, could be down as much as 60%. Within about a month, many businesses are expecting difficulties restocking their inventories. Some of the nation’s largest retailers, including Home Depot, Target, and Walmart, met with the President last week and warned that consumers may soon start to see empty shelves and higher prices.

Indeed, the first wave of consequences of what effectively is an embargo on many foreign imports could be layoffs in trucking, logistics, and retail followed by empty shelves and rising inflation triggered by shortages.

The Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals in the week starting May 4 to be a third lower than for the same time one year ago. Airfreight has also seen a steep decline in overseas deliveries, and container tracking services report that the schedule of shipping containers from China to the U.S. were 45% lower than one year ago as of mid-April.

Analysis by the National Association of Home Builders suggests the tariffs will increase the cost of household appliances, as 54% of imports come from China. The tariffs will also increase the cost of residential building materials and the cost of building a new home.

While there seems to be movement on the part of the administration and the Chinese government to find a way out of this trade war, the situation remains unclear. The president claims negotiations with China have begun; however, the Chinese government denies there are any trade talks underway.

As the country begins to experience the effects of a full-blown trade war, many are preparing for expected price increases by stockpiling essential items and upgrading technology. Concerns about tariffs leading to higher costs on consumer goods are prompting many to rethink their spending habits. Amid inconsistent tariff announcements from the government, a recent executive order has set a 10% baseline tariff on all countries, encouraging many people to purchase essentials in advance. Probably not a bad idea.