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Things aren’t going as planned at the Port of Los Angeles, one of the largest container terminals in the U.S. Managers expected 80 ships to arrive in May, but 20% of those have been canceled, according to executive director Gene Seroka, who spoke with CNN. And it’s not the only decline. “This week, we’re down about 35% compared to the same time last year,” he added.
The drop is no surprise. It follows the tariff battle between Washington and Beijing, along with tariffs imposed on other countries. Now, the conversation in the U.S. has shifted to what comes next—and whether this slump will lead to price increases and empty store shelves.
More tariffs, fewer reserves. The industry saw this coming. President Donald Trump’s trade war—and his escalating tariffs on Chinese goods—was felt almost immediately by port operators and shipping lines, especially those moving goods across the Pacific.
In April, Flexport CEO Ryan Petersen warned that container bookings from China to the U.S. dropped 60% just three weeks after the new tariffs were enacted. Cargo traffic from China through Southern California ports fell 29% between late April and early May. That was the warning shot. The real question was: what would come next?
One percent: 50%. Weeks later, with no deal between Washington and Beijing to lift the 145% tariff on Chinese exports, U.S. ports are already seeing a sharp decline in imports. Many ships crossing the Pacific are arriving half empty. Seroka confirmed the trend, citing a more than 50% drop in container volume from China.
“These cargo ships coming in are the first ones to be attached to the tariffs that were levied against China and other locations last month,” Seroka said. “That’s why cargo volume is so light.” Some importers have canceled orders, unwilling to pay the higher tariffs. Others are leaving inventory in Chinese warehouses rather than shipping it.
Looking ahead. Fears of a trade war pushed many companies to accelerate shipments ahead of the tariff hikes. That explains the 14% jump in the U.S. trade deficit in March, which rose to $140.5 billion. Imports in April rose 9.1% for the same reason. But this wave of early buying is fading fast. Port executives say the bump in container traffic will vanish by May.
At the Port of Los Angeles, which serves as the main entry point for Chinese goods, imports were expected to be 35% lower this week compared to last year. Some projections say maritime traffic could fall 20% overall this month. Shipping lines are already canceling voyages due to weak demand.
The National Retail Federation forecasts a 20% year-over-year drop in U.S. imports during the second half of the year. JP Morgan says the decline could hit 75% to 80% when it comes to Chinese goods specifically.
What happens next? That’s the big question. The effect of tariffs on cargo traffic extends far beyond ports and logistics companies—they’re just the middlemen.
“A 60% decline in containers means 60% less stuff arriving,” Petersen told CNN. “It’s only a matter of time before they sell through existing inventory, and then you’ll see shortages. And that’s when you see price hikes.” If the trend continues into summer, Petersen warns, we may see “empty shelves” at major retailers.
He’s not alone. In late April, just before Trump softened his rhetoric with the Fed and China, Axios reported that the CEOs of Walmart, Target, and Home Depot issued a warning: Prices will rise over time, and shelves could be empty.
CNBC is also reporting that falling orders from China and dwindling ship traffic are threatening the U.S. supply chain. And this is no small matter.
In 2024, the U.S. imported $438.9 billion worth of goods from China. That dependence is especially strong in certain sectors: Nearly 37% of all clothing and footwear imported into the U.S. came from China last year.
Image | Sven Piper (Unsplash)
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