Port of Los Angeles Cargo Volumes to Drop 35% Due to Trump Tariffs

The Port of Los Angeles has issued a warning that cargo volumes are expected to plummet by 35% next week, as the impact of Trump's tariffs begins to take effect. This significant drop in cargo volume is a direct result of the tariffs imposed by the Trump administration, which have led to a reduction in import orders by American businesses.

Gene Seroka, the executive director of the Port of Los Angeles, revealed in an interview that the volume of cargo arriving at the port is projected to decrease by more than a third compared to the same period last year. Seroka attributed this sharp decline to the tariff policies, which have caused major retailers in the U.S. to halt overseas purchases. He noted that the cargo volume is currently experiencing a vertical decline due to these policies.

Seroka also pointed out that some transportation companies are shifting their procurement to other regions in Southeast Asia to maintain vessel loading rates. He emphasized that, realistically, until a new agreement or framework is reached, cargo volumes from East Asia will remain at extremely low levels, with the exception of a few special commodities.

In addition to the decline in cargo volume, Seroka anticipates that the number of ships arriving at the port in May will decrease by approximately a quarter. The escalating trade friction between the two countries, which began with Trump's announcement on April 2 to significantly increase tariffs on imported goods, has resulted in both sides imposing tariffs exceeding 100% on over a hundred commodities.

The U.S. Treasury Secretary, Scott Bessen, described the current situation as "unsustainable," but there have been no signs of substantive negotiations between the two superpowers to date. The ongoing trade tensions have led to a significant disruption in the supply chain, causing price increases and supply chain chaos. Experts warn that the situation could worsen, potentially leading to inflation, shortages of goods, and increased unemployment in the U.S.

The tariff policies have already had a severe impact on the supply chain, with the volume of sea freight bookings dropping significantly. This disruption is expected to continue, with experts predicting that American consumers may face substantial fluctuations in the price and availability of goods in the coming weeks. Retailers are already experiencing a shortage of inventory, which could lead to price increases or stockouts of certain products.

The "bullwhip effect" is also expected to exacerbate price volatility, with essential items such as toys, clothing, holiday supplies, and household goods likely to experience shortages and price increases sooner than other products. The timing of when consumers will feel the impact of these shortages depends on how much inventory companies have stockpiled in advance. However, once shortages occur, they are likely to trigger a chain reaction, with price increases and supply disruptions becoming more pronounced.

If the tariff dispute persists, the economic and employment outlook for the U.S. could be grim. The prolonged trade war could lead to significant job losses, particularly in the retail, shipping, and logistics sectors. The economic impact could be severe, with the potential for a global economic downturn and increased geopolitical tensions. The situation is complex and requires careful management to mitigate the risks and prevent a prolonged period of economic instability.