Tariffs threaten Walmart, target shelves and US economy stability
Tariffs imposed by the Trump administration on China might lead to empty shelves at Walmart and Target stores, along with rising prices. Experts forecast shortages and layoffs in the transportation and retail sectors, creating a shock for the American economy. "The clock is absolutely ticking."
The Trump administration has implemented tariffs on Chinese goods, escalating trade tensions between the US and China. According to Bloomberg, since April, tariffs have increased by up to 145%, resulting in a 60% decline in goods transportation. As a result, by mid-May, many companies, including Walmart and Target, could be facing product shortages and rising prices.
"The clock is absolutely ticking," said Jim Gerson, president of The Gerson Companies, indicating the risks associated with delivery delays before the holiday season.
It will be a shock for the US economy
Experts interviewed by Bloomberg warn that the effects of the tariffs could impact the US economy widely. Shortages are expected in sectors like transportation, logistics, and retail. Additionally, uncertainty regarding trade policy might lead to layoffs.
Meanwhile, despite public opposition, China has eased some tariffs on American technology and pharmaceutical products.
Torsten Slok, chief economist at Apollo Management, noted that the upcoming shortages will likely be "COVID-like."
American importers are already looking for alternatives to China in Southeast Asia, such as Cambodia and Vietnam. Judah Levine, head of research at the Freightos cargo booking platform, warned that "a significant slowdown" is "likely" before trade stabilizes. Data from Hapag-Lloyd indicates that up to 30% of reservations on the China-US route have already been canceled, further exacerbating supply chain disruptions.
President Trump announced that he will not give up on tariffs unless China offers something "significant" in return. Nevertheless, there are signals of de-escalation, raising hopes for easing trade tensions. In the meantime, American companies must prepare for potential supply challenges and price increases.
Bloomberg reports that the World Trade Organization predicts a possible 80% decline in trade between the US and China, and US Treasury Secretary Scott Bessent described the current situation as "essentially a trade embargo." Economists expect US imports to fall by 7% year-over-year in the second quarter, which may trigger inflationary pressure and increase the risk of recession.
