Trade standoff: Tariffs threaten U.S. retail with shortages
Tariffs imposed by the Trump administration on China may lead to empty shelves at Walmart and Target stores, along with rising prices. Experts anticipate shortages and layoffs in both the transportation and retail sectors, which could shock the American economy. "The clock is absolutely ticking."
The Trump administration has applied tariffs on Chinese goods, causing trade tensions between the U.S. and China. According to Bloomberg, since April, tariffs have increased by 145%, leading to a 60% decline in goods transportation. Consequently, 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, highlighting 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 may be felt throughout the U.S. economy. Shortages are expected in sectors like transportation, logistics, and retail. Furthermore, uncertainty related to trade policy could 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, indicated that the upcoming shortages will be "COVID-like."
American importers are already seeking alternatives to China in Southeast Asia, including countries like Cambodia or 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 suggests that up to 30% of bookings on the China-U.S. route have already been canceled, further worsening supply chain disruptions.
President Trump stated 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 U.S. and China, and U.S. Treasury Secretary Scott Bessent described the current situation as "essentially a trade embargo." Economists expect U.S. imports to fall by 7% year-over-year in the second quarter, which could trigger inflationary pressure and increase the risk of recession.
