U.S. ports report plummeting shipments from China, and observers see empty shelves and a possible recession this summer as President Donald Trump's sweeping "Liberation Day" tariffs take hold. Even if the U.S. agrees to trade specific country deals immediately, the trade war touched off by the Trump tariffs will now hit U.S. supply chains hard, many economists and industry insiders say — and could rival the toll of the Covid pandemic.
Specifically in focus: U.S. trade with China. The uncertainty caused by the back and forth over tariffs and possible deals has led to canceled orders and a sharp drop in vital China-to-U.S. shipping traffic. Cancellations ran at 50% at the end of April, according to global logistics firm Flexport. That created, at a minimum, a weekslong gap in shipping traffic to U.S. ports. As a result, analysts see massive impacts on retailers and shipping stocks and a ripple effect through much of the U.S. economy.
Alan Murphy, chief executive of the Singapore-based research firm Sea-Intelligence, said that after Trump's tariff announcement, "any order that could be canceled got canceled and no new orders were being made." This was especially the case for "everything that is low margins," Murphy said. That includes toys, sports gear, apparel, shoes and some furniture, he said, citing conversations with around 50 producers.
Now, Murphy adds, shipping lines are canceling sailings from China, around 20% to 30% weekly. The only other times such supply declines take place is during the Chinese New Year and Golden Week, when China's economy largely shuts up shop.
"Does that mean that volumes out of China will completely disappear? No," Murphy said. "There are some goods that currently don't have an alternative venue for production. And there will also be some goods where the value is high and the margin is high, so that both the producer and the importer can eat some of that margin."
Activity At U.S. Ports Foretells Difficult Decisions
The Port of Los Angeles is the major U.S. entry point for cargo ships from China and Asia. As of April 29, import volumes for the week of April 27 to May 3 were expected to drop 30% from the prior week and fall 13% from a year ago. For the following week, the port expects a 35% fall off vs. the same week in 2024.
William Blair macro analyst Richard de Chazal told Investor's Business Daily that activity in the major U.S. ports is slowing sharply after a pre-tariff day ramp-up in activity.
"Some normalization should be expected," after a period in which importers hustled to stockpile inventory, he said. "What happens next will depend on what President Trump decides to do after the 90-day (tariff) pause. Unfortunately we do not know."
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Port of Los Angeles Executive Director Gene Seroka, during the port's board of harbor commissioners meeting on April 24, said the expected 35% decline in cargo arrivals was due to cessation of "essentially all shipments out of China for major retailers and manufacturers."
That dearth of arrivals will roll out to Gulf Coast and East Coast ports over the next several weeks.
Major retailers have told Seroka that they have about a six- to eight-week supply of inventory, but that "will quickly dry up." The trade war could be felt even sooner at smaller retailers with fewer ways to stockpile.
"United States consumers and manufacturers alike will find difficult decisions in the weeks and months to come if policies don't change," Seroka said.
Trump Tariffs And Trade War Hit Shippers
The current withdrawal of capacity along the Pacific Ocean lanes between Asia and North America is occurring "at faster rates" than during the coronavirus pandemic, according to Flexport.
Shipping operators are canceling shipments entirely, sending smaller vessels or skipping a scheduled port of call in a regular route. Some are suspending entire shipping routes, the logistics firm reports.
This follows a period in which buyers raced to set aside as much spare inventory as possible ahead of the tariff launch.
Charles Schwab Chief Global Investment Strategist Jeffrey Kleintop told IBD that the Los Angeles and Long Beach ports were recently "unloading above-average container arrivals" and "stocking up ahead of the tariffs."
But in the weeks and months ahead, "We are seeing falling demand and high cancellation rates rivaling those of the pandemic," Kleintop said.
The National Retail Federation, whose members include Walmart and Target, forecast earlier this month that U.S. import cargo volume will fall at least 20% year over year in the second half of 2025 as U.S. companies pause orders from China.
Last week, London-based maritime consulting firm Drewry announced that it expects a 1% decline in global container port volume in 2025 due to U.S. trade war policies. Container volume fell 8.4% in 2009 during the global financial crisis and just short of 1% in 2020 at the start of the coronavirus pandemic.
Drewry said this is only the third time since it began collecting container shipping data in 1979 that shipping demand has dropped.
Even if two-thirds of the current U.S. tariffs remain in place, Drewry estimates, U.S. imports from China could fall 40%.
"It stands to reason that more discretionary and high-ticket items could suffer more from a consumer pullback than food commodities," Kleintop said.
U.S. Ports Empty As Freight Comes To A Halt
A report released April 27 by Torsten Slok, chief economist of the asset management firm Apollo Global Management, laid out the stark scenario facing the U.S. economy. The report set out a timeline for empty U.S. ports to slow truck and rail travel across the U.S., and then cause truck traffic to collapse. That, in turn, would result in empty store shelves, followed by layoffs in trucking and retail and, finally, a recession this summer.
Trump announced his broad tariff scheme on April 2, which he named "Liberation Day" because his strategy aimed to correct decades of "unfair" trading relationships.
Container ships leaving China take 20 to 40 days to reach the U.S., depending on the port, according to Apollo. Slok estimates that container ships coming to U.S. ports could come to a stop by mid-May.
From there, it takes another one to 10 days of transit time for trucks and trains to distribute goods from U.S. ports to cities. Apollo Global Management predicts that, by late May, domestic freight movement will largely "come to a halt." By then, most retailers will have run through their stockpiled inventory. Store sales will decline.
By early June, Slok forecasts layoffs in the domestic freight and retail industries.
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Retailers and manufacturers typically put in orders to factories in Asia three to four months ahead of shipments, said Seroka at the Port of Los Angeles. Trump's 90-day pause on broad "reciprocal" tariffs, therefore, leaves unfilled the recession-causing gap in supply-chain flow.
Seroka said U.S. exporters are getting "hit hard" by retaliatory tariffs amid Trump's trade war. Some of the biggest hits are in agriculture, heavy-duty manufacturing and information technology services.
"U.S. ag exporters are having an especially challenging time, so much so that in March, China bought more soybeans from Brazil in one month than ever in their history," Seroka said.
Another factor could influence the picture. A Trump administration move aims to revive the U.S. domestic shipbuilding industry, which has been overwhelmed by competition from South Korea, China and Japan over the past several decades. The rule establishes one set of port charges specifically for China-owned or -operated ships. Ships that are made in China but owned or operated under other flags will be charged a smaller fee.
Fees will only be charged at one port in a ship's visit to U.S. ports. Still, the fees will be substantial. Bloomberg cites data from Clarkson Research for a Chinese-built container ship with a capacity of 10,000 20-foot equivalent units, a measure of ship size. The ship "could incur costs of $1.3 million per voyage in 2026 and $1.9 million per voyage in 2028," it reported.
Stocks Feeling The Trade War Squeeze
Big retailers that rely on China-made goods — like Amazon, Walmart and Target — could feel some of the earliest impact from Trump's tariffs and the shipping slowdown.
Amazon's earnings on Thursday beat views, but the company gave weak operating profit guidance, citing "tariffs and trade policies." Walmart's Q1 financials are due May 15. Target follows with first-quarter earnings and revenue on May 21. Amazon stock fell 3% in April while Target stock declined 7.3% last month. Meanwhile, Walmart shares jumped 10.8% higher in April.
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Container fleets and logistics companies like ZIM Integrated Shipping and XPO Logistics are also set to feel the pinch. ZIM shares advanced 5% while XPO declined 2% during April's stock market action.
The 37 stocks in the IBD-tracked Transportation-Ship industry group have collectively declined 13% in 2025. That puts the sector at a weak No. 184 out of 197 industries based on six-month performance, with 1 being the best performer and 197 the worst.
Domestic freight company Old Dominion Freight Line dropped 7.4% in April while peer ArcBest declined 17%.
Among other truckers, J.B. Hunt was down 11.7% in April. Schneider National dropped 6% last month.
Farm products exporter Archer-Daniels-Midland fell less than 1% in April. It has dropped 6% in 2025.
Fast-Moving Environment Of Trump Tariffs
The current situation appears to be changing almost daily as the Trump White House works to negotiate deals with a long list of countries. Industry and political leaders are also pleading their cases to the president.
The Wall Street Journal reported Tuesday that the Trump administration doesn't want to publicize trade deals until several can be announced at once. In Washington, D.C., closed-door meetings in late April hosted by JPMorgan Chase in front of more than 500 investors, Treasury Secretary Scott Bessent said he expects negotiations with China will require two to three years, according to the WSJ.
JPMorgan Chief Executive Jamie Dimon told the participants he thinks the best-case scenario from Trump's trade war would be a mild recession for the U.S. economy, the WSJ reported.
Meanwhile, Bessent on April 28 told CNBC's "Squawk Box" that he places the burden for reaching an agreement squarely on China.
"I believe that it's up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable," Bessent said.
U.S. Top Trade Partners As Of 2024 |
||||
| Countries | Percent Of Total Imports/Exports | |||
| Mexico | 16% | |||
| Canada | 14% | |||
| China | 11% | |||
| Germany | 4% | |||
| Japan | 4% | |||
China Top Trade Partners 2024 |
||||
| Countries | Percent Of Total Imports/Exports | |||
| ASEAN | 16% | |||
| European Union | 13% | |||
| U.S. | 11% | |||
| South Korea | 7% | |||
| Sources: U.S. Census Bureau, China's General Administration of Customs | ||||
China news reports late Thursday cited China's Commerce Ministry, saying Beijing was "evaluating" an offer form Washington to hold trade talks. Global markets generally read the news as a possible step toward detente.
Earlier, after an April 21 White House meeting, other reports emerged from China saying major U.S. retailers — including Walmart, Target and Home Depot — notified Chinese suppliers to resume exports as talks around U.S. tariffs policy continue.
The U.S. retailers agreed to cover Trump's 145% tariffs, the Hong Kong-based Ming Pao newspaper reported. The National Retail Federation did not respond to multiple requests to comment on the Chinese reports.
CFRA analyst Emily Nasseff Mitsch told IBD she had been unable to confirm whether the reports out of China were accurate.
"But if it's true, and it means exports resume to the U.S., it would be beneficial for U.S. import activity and ultimately international intermodal for rail companies like Union Pacific, CSX and Norfolk Southern."
U.S. Trade War: The Case To Be 'Cautiously Optimistic'
Even with industry observers ringing trade war warning bells, many observers are making the case for optimism.
Murphy acknowledged fears that Trump's tariffs could bring a global shipping snarl comparable to the coronavirus, but said the current situation is quite different.
"The pandemic drew a boom in demand, so you saw about 15%-20% more demand into the U.S. than normal and that was enough to knock down the supply chains," Murphy said. "Back then, the problem was all the vessels were full of boxes stuck just outside the U.S."
"Now, all the sailings that are being canceled, they remain out in Asia," Murphy added. "They basically just parked the vessel, which means reactivating that supply is not going to be months, but it is going to be weeks."
On April 24, Bethann Rooney, the director for the Port Authority of New York and New Jersey, said during a board meeting that there are shippers "who are outsourcing away from China." Some of the ports' customers have even "shifted their sourcing to the Dominican Republic, where they would face the lesser tariff rates."
"There is a lot of volatility and uncertainty," Rooney added. "I think we'll all be cautiously optimistic that some of these conditions will change for the better and we will continue to have a strong year throughout."
After Trump Tariffs, Layoffs Coming At U.S. Ports?
Despite the trade war, Seroka does not at this time foresee "mass layoffs" at the L.A. port. He does feel that "less cargo will mean fewer jobs in and around our port, not just on the docks, but with truckers, warehouse folks, manufacturers and those in the customs brokerage and forwarding communities."
"Most of our planning now is for when this all settles. We'll be ready to catch that cargo as it starts coming our way in even higher volumes," Seroka said. "But for now, it's encouraging folks in all segments of the supply chain, policymaking and elected leadership, to get to the work of concluding what is necessary for business certainty and international trade."
CFRA's Nasseff Mitsch added that everything may look better in a month's time once deals are made with other countries.
"There has been a lot of noise and volatility surrounding tariffs, and I think it's important for investors to keep a long-term mindset, despite short-term rockiness," Nasseff Mitsch said.
"We have to remember that Trump did this in his first term, and I think these tariffs are really being used as a bargaining chip by him. But we will see how everything plays out," she added.
Please follow Kit Norton on X @KitNorton for more coverage.
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