Trade war fallout: Empty ports and looming shortages ahead
In early May, shipment volumes at the Port of Los Angeles are expected to decrease by 35 percent, a consequence of the trade war initiated by Donald Trump. "A number of major American retailers [are] stopping all shipments from China based on the tariffs," says port director Gene Seroka, as quoted by CNBC. According to him, within five weeks, Americans may experience shortages on store shelves.
"It’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs," assesses Seroka. The Port of Los Angeles is the largest port in the United States, and goods from China account for 45 percent of its operations.
In response to the trade war, some American transport companies are looking to diversify the supply chain by utilizing other countries in Southeast Asia. Data from China indicate a slowdown in trade volume with the USA, which is concerning some experts.
Empty ports in America
Torsten Slok, chief economist at Apollo Global Management, predicts that lower imports from China will impact the transportation and retail sectors. There will be layoffs, store shelves will be empty, and a recession will hit the USA this summer. In this context, "Fortune" magazine wrote that "the sight of empty ports on the West Coast of the USA raises concerns related to Donald Trump's trade war." Significantly less traffic has already been recorded at the ports in Seattle and Tacoma.
Sean Stein from the US-China Business Council told NBC News that "starting in a couple of weeks, we are just going to start running out of stuff." Empty shelves are expected to resemble the early days of the COVID-19 pandemic, when the supply chain was disrupted and new solutions had not yet been developed.
Seroka believes that US retailers have 5-7 weeks before they fully feel the limited supplies from China. Many companies have already been stockpiling in anticipation of the tariffs imposed by Trump.
"I don’t see a complete emptiness on store shelves or online when we’re buying. But if you’re out looking for a blue shirt, you might find 11 purple ones and one blue in a size that’s not yours," explains Seroka. The director of the Port of Los Angeles notes that the range of products will decrease due to the additional costs incurred by retailers. "And for that one blue shirt that’s still left, you’ll see a price hike," concluded Seroka.
