[By Guancha Observer Network, Xiong Chaoying] According to a report by the Financial Times of the UK on April 27 local time, the tariff war provoked by US President Trump is beginning to have a wider impact on the US economy. Operators of container ports and air cargo management companies reported that goods shipped from China to the US are significantly decreasing.
The Port of Los Angeles, as the main entry port for Chinese goods into the US, expects that the number of scheduled arrivals in the week starting May 4 will decrease by one-third compared to the same period last year; at the same time, air cargo companies also reported a significant drop in booking volumes. The latest data from container tracking service company Vizion showed that as of mid-April, the standard 20-foot sea container bookings from China to the US decreased by 45% compared to the same period last year.
John Denton, Secretary-General of the International Chamber of Commerce (ICC), said that the turmoil in US-China trade flows reflects that traders are "delaying decisions," waiting to see how quickly the two countries can reach an agreement to reduce tariffs.
In addition, current changes in consumer purchasing patterns are also reflecting the situation of three consecutive months of declining consumer confidence indices. Retail consulting executives noticed that the US consumer market is currently suffering from a "double blow": on the one hand, consumers are downgrading their consumption, and on the other hand, prices are quietly rising.
On April 8, the container terminal of the Port of Long Beach, California, Visual China
After Trump announced something on April 2 local time, the ICC conducted a survey among its members in more than 60 countries. The survey results showed that regardless of the potential outcome of future negotiations, all parties expected permanent impacts on trade.
"Almost everyone has tacitly accepted that the minimum charge for entering the US market will be 10%." Denton said regarding "reciprocal tariffs" that the cost of entering the US market will reach its highest level since the 1930s.
As the first batch of Chinese container goods facing tariffs will arrive in the US next week, freight operators said that supply chains are shifting. Nathan Strang, head of ocean freight at the US logistics group Flexport, said that due to expectations of a possible tariff reduction agreement between the US and China, businesses are postponing shipments.
Logistics industry executives said that US importers are planning to consume inventory before importing new goods from China. They are also choosing to store goods in bonded warehouses (duty-free upon entry, taxed upon withdrawal) or to divert goods to surrounding countries such as Canada.
"They are both holding back shipments at the origin and accumulating goods at the destination without withdrawing them," Strang warned that if a tariff reduction agreement is reached between the US and China, maritime freight rates will rise significantly.
Hapag-Lloyd, one of the largest container shipping companies in the world, said that among its orders from China, Chinese customers have canceled about 30% of their bookings. Recently, Taiwan-based container shipping company De-Shine Maritime, listed in Hong Kong, suspended one of its services from Asia to the US West Coast. An insider of the group revealed, "(currently) there is no market demand."
Data from shipping analytics firm Sea-Intelligence showed that the decline in order volumes has directly affected the volume of goods arriving at the Port of Los Angeles. The company reported that the number of "blank sailings" (i.e., canceling scheduled voyages from China) surged recently, with shipping companies cutting capacity to cope with shrinking demand.
The report stated that bookings on the Asia-North America route fell nearly 400,000 TEUs over the four weeks starting May 5, down 25% from the same period before the tariff increase in early March. The Port of Los Angeles alone expects 20 "blank sailings" in May, exceeding 250,000 containers, higher than the six in April. This contrasts sharply with the 56% year-on-year increase in arrivals this week - a sign that importers are rushing to ship goods from other Southeast Asian manufacturing hubs like Cambodia and Vietnam, which currently enjoy a 90-day tariff "deferral period."
Data from the Airforwarders Association showed a significant drop in air freight volumes, with bookings from China falling by about 30%. Brandon Fried, executive director of the association, said, "Many members have stopped accepting orders from China. This also has a significant impact on prices and booking rates as traders react to every message from the White House."
Due to tariff fluctuations and changes in the "small parcel duty-free" policy, Cathay Pacific, which derives approximately one-quarter of its revenue from air freight business, expects weak freight demand between the US and China. Hong Kong freight agent Easyway Air freight said that after the tariff increase, its freight volume from China to the US plummeted by about 50%.
Knight-Swift Transportation, one of the largest trucking companies in the US and headquartered in Arizona, also warned that due to the uncertainty caused by the tariff threat, expected volumes would decline. CEO Adam Miller of the group said that some of its largest clients "expressed concerns" about the possibility of a 5% tariff cost leading to a sales decline in May. "Some companies told us yes, they canceled orders or stopped placing orders, especially orders from China. We will try to adjust their supply chains to avoid costs (losses)."
At the same time, retail industry consultants also pointed out that current changes in consumer purchasing patterns reflect the continuous weakness in the US consumer confidence index over the past three months.
John Shea, CEO of online retailer consulting company Momentum Commerce, which helps consumer goods companies achieve about $7 billion in annual sales on Amazon's platform, warned that the dual adverse factors of rising prices and declining consumer spending may form a "double blow" effect. He said, "We see evidence that consumers are downgrading their consumption... while prices are quietly rising."
On April 30 local time, the US will release the first quarter domestic GDP data for 2025. Bloomberg noted that this data will provide an assessment of the economic conditions at the beginning of President Trump's second term, reflecting the state of the US economy before the full-scale tariff war was launched on April 2. However, this data is expected to be pessimistic.
"Before the trade war erupted, the US economy was already struggling," Bloomberg analyzed on April 27 with this title, stating that American consumers were showing signs of fatigue. The wave of stockpiling imported products triggered by tariff threats is expected to further widen the trade deficit. The world's largest economy, which had been smoothly developing for most of last year, is expected to lose momentum at the beginning of 2025.
Economists at Bloomberg predicted in a report that the actual GDP growth rate for the first quarter of the US would slow down dramatically from 2.4% in the fourth quarter of 2024 to 0.4%. Trade deficits will be its biggest drag, as businesses rushed to purchase imported goods before the Trump administration raised tariffs, and consumers also scrambled to buy goods that might become more expensive due to tariffs.
The report pointed out that this is the lowest growth rate in nearly three years. In addition, due to financial markets' high sensitivity to economic prospects, GDP growth close to stagnation may exacerbate concerns about a potential economic recession and collapse in the job market. Economic surveys show that GDP growth in the first three quarters of this year is expected to be below 1%, private investment will shrink, and many consumers will limit spending out of concern for job security.
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Original source: https://www.toutiao.com/article/7498235078854590991/
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