A container ship is shown in the port of Los Angeles in Los Angeles, California, USA, November 22, 2021.
Mike Blake | Reuters
China's programs to the west coast of the United States will decrease next week because President Donald Trump's tariffs make companies reduce their import orders.
Gene Seroka, Managing Director of Los Angeles port, said on Tuesday in the “Squawk Box” from CNBC that he would expect that an incoming load volume would slip by more than a third in the next week compared to the same period in 2024.
“According to our own port optimizer, which measures the loads in Asia, we will only drop a little more than 35% next week compared to last year. And it is a steep decline in volume, with a number of large American retailers stop all programs from China based on the tariffs,” said Seroka.
Seroka said that programs from China make about 45% of the business for the port of LA, although some transport companies want to pick up goods in other places in Southeast Asia to fill their ships.
“Realistically speaking, the volume that manages – until a few different goods – until a match or some frames can be reached, is very easy,” said Seroka.
In addition to the lower volume of goods, Seroka expects about a quarter of the usual number of incoming ships to be canceled to the port in May.
Trump announced a strong increase in tariffs for Chinese goods on April 2, which led to an escalation on both sides, which ultimately led to the fact that both the USA and the China were laid out from more than 100% against many goods. The US Finance Minister Scott Bessent described the situation as “not sustainable”, but there were no signs of considerable negotiations between the two countries.
Data on shipments from China had already started to slow down the trade volume and alerted some economists. The chief economist of Apollo Global Management, Torsten Slok, recently set a timeline in which lower imports from China lead to layoffs in the transport and retail industries in the USA, empty shelves and a recession this summer.
Seroka said that he believes that US retailers bite around five to seven weeks before the effects of the restricted programs, partly to the fact that companies were divided in front of Trump's tariff announcements.
“I do not see a complete emptiness on the shelves or online when buying. However, if you are looking for a blue shirt, you may find 11 purple and a blue in a size that does not belong to you. So we will see a less selection on these shelves on these shelves, just because we do not come the variety of goods that come in here, based on the additional costs. And for a blue shirt that is still left.
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