West Coast Port Shipments From China Down 45% And Declining In Response To Trump Tariffs

Truckers hauling export freight to the Port of Los Angeles this week will likely be turning around and heading home with an empty load, reports Fortune, thanks to massively reduced Chinese imports. The fallout from the global trade war, instigated by President Trump's dramatic 145% tax on Chinese goods, will be lengthy and far-reaching. Logistics experts warn that cargo volumes are dropping across the board, but the pinch is most dramatically felt at the Port of Los Angeles (above), which has seen a precipitous drop off in import volume in recent weeks. The ports of LA and Long Beach handle about a third of all seaborne trade in the U.S. and serve as the main entry point for Chinese goods. 

According to Port Optimizer, scheduled container arrivals to the port will drop from 120,000 standard twenty-foot containers to just 77,000 next week. It takes about 30 days for a container ship to reach the West Coast from China, meaning the full effects of the Republican Party's ballooning tariffs are just now starting to hit trade routes. 

The increasingly erratic trade behavior of the near-octogenarian President has turned businesses off of investment, carrying inventory, and placing new orders, which economists warn could kickstart an economic recession in the U.S. economic system. Some of the decline in shipping figures over the last month are the result of businesses front-loading their imports before tariffs were implemented, though the current bust is far larger a trench than last month's boom was a rise. 

The World Trade Organization estimates that trade between the U.S. and China could fall by as much as 80% if the tariffs aren't deleted soon, threatening trillions of dollars in imports and exports. Not only will this mean a decrease in goods and potentially dramatic shortages on store shelves within six to eight weeks, but a knock-on effect of dramatically reduced shipping volumes, impacting the nation's infrastructure. If there is nothing to deliver there will be dramatically reduced demand for port workers, truckers, load handlers, container builders, and retail store workers. Unemployment is already climbing, and seemingly will only get worse in the coming months. 

According to U.S. logistics group Flexport, companies are waiting to import goods in anticipation of a trade deal between Washington and China. Importers are waiting to use up current inventory before ordering fresh stock, while some are holding stock at bonded warehouses where inventory can be stored without duty, and only paying taxes on withdrawal, hoping tariffs will be reduced before they need the stock. Some importers are diverting their Chinese goods to Canada, where import fees are significantly less. While the Trump Administration scrambles to roll out tariff exemptions on products important to the U.S. economy's survival, and Trump himself predicting tariffs will "come down substantially," Beijing stated on Friday that it was not engaging with the U.S. on trade policy, according to Financial Times. If you're waiting for tariffs to come down, you're going to have to keep waiting, because China isn't coming to the table.