Imports arriving from China into the U.S. West Coast are expected to fall sharply—potentially by over a third—after President Donald Trump’s newly enacted tariffs prompted major retail chains in America to dramatically reduce their purchases, according to the head of the Port of Los Angeles.
Gene Seroka, who oversees operations at the busiest container port in the United States, shared during an appearance on CNBC’s “Squawk Box” Tuesday that a significant decline in cargo is projected for next week. Current estimates indicate the port will see more than a 35% decrease in shipments compared to the same time last year.
“According to our own port optimizer, which measures the loadings in Asia, we’ll be down just a little bit over 35% next week compared to last year. And it’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs,” Seroka said.
Currently, goods imported from China represent nearly 45% of the total activity at the Port of Los Angeles, underscoring how significant the impact of the slowdown could be.
Despite the sharp reduction, Seroka pointed out that some freight companies are attempting to recover losses by redirecting their sourcing efforts to other nations in Southeast Asia.
“Realistically speaking, until some accord or framework can be reached with China, the volume coming out of there — save a couple of different commodities — will be very light at best,” he added.
The broader shipping sector is also bracing for a serious slowdown, with Seroka revealing that a large number of vessel arrivals are being canceled for the coming month.
According to Seroka, roughly 25% of the ships originally scheduled to arrive at the port in May will no longer be coming, as companies reassess shipping plans amid the intensifying trade standoff.
This slump follows the most recent developments in the growing trade dispute between Washington and Beijing.
Trump’s sweeping tariff increases on Chinese exports were announced on April 2, sparking an immediate tit-for-tat response from China’s leadership.
With both sides now having levied tariffs that exceed 100% on numerous goods, Treasury Secretary Scott Bessent described the current climate as “unsustainable.”
At this point, there is no indication that either government is preparing for serious talks aimed at resolving the tensions.
Even before the latest tariffs were enacted, trade flow data had begun to show early signs of weakening. The slowdown has already prompted concerns from leading economists.
Torsten Slok, chief economist at Apollo Global Management, recently warned that shrinking imports could lead to job cuts in both the retail and logistics industries, create product shortages, and potentially contribute to an economic downturn later in the summer.
Retailers in the U.S. have temporarily been able to cushion the impact by building up extra stock before Trump’s tariff hike was made official.
Seroka noted that current inventory levels remain healthy, but that buffer will not last long.
“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,” Seroka said.
“So we’ll start seeing less choice on those shelves simply because we’re not getting the variety of goods coming in here based on the additional costs in place. And for that one blue shirt that’s still left, you’ll see a price hike.”
With the future of international trade in flux, financial markets are paying close attention to the unfolding scenario.
Economists are increasingly cautioning that extended disruption to global supply chains could further aggravate economic headwinds in the coming months.
{Matzav.com}