US‑China tariff tensions threaten retail shelves and prices
Tariffs imposed by the Trump administration on China may lead to empty shelves at Walmart and Target stores, along with rising prices. Experts predict shortages and redundancies in the transportation and retail sectors. It will be a shock to the American economy. "The clock is absolutely ticking."
The Trump administration has imposed tariffs on Chinese goods, causing trade tensions between the United States and China. According to Bloomberg, since April, tariffs have risen to 145%, resulting in a 60% decline in goods transportation. As a consequence, by mid-May, many companies, including Walmart and Target, may face product shortages and increasing prices.
"The clock is absolutely ticking," said Jim Gerson, president of The Gersons Companies, highlighting the risks associated with delivery delays before the holiday season.
It will be a shock to the US economy
Experts interviewed by Bloomberg warn that the effects of the tariffs may be felt throughout the US economy. Shortages are expected in sectors such as transportation, logistics, and retail. Additionally, uncertainty related to trade policy may result in redundancies.
Meanwhile, despite public opposition, China has eased some tariffs on American technology and pharmaceutical products.
Torsten Slok, chief economist at Apollo Management, assessed that the upcoming shortages will be "COVID-like."
American importers are already seeking alternatives to China in Southeast Asia, such as Cambodia or Vietnam. Judah Levine, head of research at the Freightos cargo booking platform, warned that "a significant slowdown" is "likely" before trade stabilises. Data from Hapag-Lloyd indicate that up to 30% of reservations on the China-US route have already been cancelled, further exacerbating supply chain disruptions.
President Trump announced that he will not relinquish tariffs unless China offers something "significant" in return. Nonetheless, 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 Organisation predicts a possible 80% decline in trade between the US and China, and US Treasury Secretary Scott Bessent described the current situation as "essentially a trade embargo." Economists expect US imports to fall by 7% year-over-year in the second quarter, which may trigger inflationary pressure and increase the risk of recession.
