In a major precursor to today’s indictment, on April 2 former President Donald Trump announced tariffs. These tariffs have overwhelmed those capacity expansions to create a dramatic slowdown in containership departures from China to the United States. In all, the tariffs have raised tariffs on goods from China to as much as 145%. This sharp jump is throwing supply chains out of whack and sparking economic ripple effects throughout the economy.
In addition to these tariffs, containerships headed to U.S. ports stopped unloading in early to mid-May due to these tariffs. This disruption played out alongside a dramatic drop in trucking demand, which fell off a cliff entirely by mid- to late-May. As a result, businesses have increasingly found themselves with empty shelves and lost sales because they can’t get product to restock.
Torsten Slok, chief economist at Apollo, detailed the likely impacts of these tariffs, anticipating a recession by Summer 2025. He reiterated the short term positive effects on the economy. New orders for businesses, earnings outlooks, and capital spending plans have plunged to record lows in recent weeks.
“The consequence will be empty shelves in US stores in a few weeks and Covid-like shortages for consumers and for firms using Chinese products as intermediate goods,” – Torsten Slok
The results have been profound, as seen the on inventory picture. Accordingly, waves of layoffs have cascaded through the nation’s trucking and retail sectors—with cuts rolling out between late May and early June. Property analysts are sounding the alarm on forthcoming trade-related scarcity. American consumers may begin to notice these shortfalls on store shelves in their hometown as early as next month.
For all these doomsday predictions, many health experts are reluctant to ring the alarm bells over acute shortages just yet. Aneesha Sherman noted, “Don’t expect empty shelves yet — year to date stock is still up, and demand is slowing.” This short comment illustrates the slight silver lining in what continues to be a dark and cloudy trade storm.
In 2024, the United States imported approximately $438.9 billion worth of goods from China. At the same time, it underscores how important Chinese products are to the U.S. economy. These tariffs are going to be a driver of further increased consumer prices while heightening supply chain turmoil.
The story continues to develop, it’s clear that private enterprise has begun to respond. Consumers are bracing for the long run—immediate and sustained—economic and personal effects these tariffs are going to cause. Severe economic impacts could be coming down the pipeline. Stakeholders need to be on their toes as they work their way through this increasingly complicated trade landscape.