Trade tensions shrink Los Angeles port activity by 35%
At the beginning of May, the volume of shipments at the Port of Los Angeles is expected to decrease by 35%, a result 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 the port director Gene Seroka, as quoted by CNBC. According to him, in five weeks, Americans will feel shortages on the shelves.
"IIt’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% of its activity.
However, due to the trade war, some American transport companies are looking to diversify the supply chain by utilising other Southeast Asian countries. Data from China indicates a slowdown in trade volume to the USA, which is causing concern among some experts.
Empty American ports
The chief economist of Apollo Global Management, Torsten Slok, predicts that lower imports from China will affect the transport industry and trade. There will be layoffs, shops will have empty shelves, and a recession will hit the USA in the summer. In this context, the magazine "Fortune" wrote that "the sight of empty ports on the West Coast of the USA raises concerns related to Donald Trump's trade war." Much lower activity has already been recorded in the ports in Seattle and Tacoma.
Sean Stein from the US-China Business Council stated on NBC News that "starting in a couple of weeks, we are just going to start running out of stuff." Empty shelves will remind people of the start 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 deliveries from China. Companies had already been stockpiling supplies earlier in case Trump imposed tariffs.
"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.
