Trade war fallout: U.S. ports brace for supply chain upheaval
In early May, shipment volumes at the Port of Los Angeles will decrease by 35 percent due to 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, Canadians could notice shortages on the 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, with goods from China making up 45 percent of its operations.
However, in response to the trade war, some American transport companies are looking to diversify their supply chains by utilizing other countries in Southeast Asia. Data from China indicate a slowdown in trade volume to the USA, which is raising concerns among 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 may be empty, and a recession could hit the USA by summer. In this context, "Fortune" magazine reported 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 stated to 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 fully experiencing the limited supplies from China. Companies had already started stockpiling in case of 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 additional costs incurred by retailers. "And for that one blue shirt that’s still left, you’ll see a price hike," concluded Seroka.
