Following a meeting at the White House on April 21, reports emerged out of China that major U.S. retailers — including Walmart, Target and Home Depot — notified Chinese suppliers to resume exports as negotiations around President Donald Trump's tariffs policy continue.
On Saturday, China-based news sites reported that U.S. retailers instructed companies in China to restart shipments halted earlier this month. The U.S. retailers agreed to cover Trump's 145% tariffs, the Hong Kong-based Ming Pao newspaper reported.
The National Retail Federation, whose members include Walmart, Target and others, 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 resume exports 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."
Retailers Expect Import Drop Off
The National Retail Federation 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.
Specifically in focus: U.S. trade with China, amid the back and forth over tariffs and possible deals. The uncertainty has led to a decrease in shipping volumes from China to North America, with cancellations currently at 50%, according to global logistics firm Flexport.
Treasury Secretary Scott Bessent on Monday told CNBC's "Squawk Box" that the responsibility for reaching a trade agreement is 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.
Trump Tariffs: Recession By The Summer?
Meanwhile, asset management firm Apollo Global Management's Chief Economist Torsten Slok on Sunday released a report outlining the timeline for Trump's tariffs to result in empty shelves, layoffs in the trucking and retail sector and a recession this summer.
Data cited in the report shows revenue of $1.167 generated by S&P 500 companies through China, vs. $144 billion in U.S. exports to the country. A difference of nearly 10 times.
Trump announced his "liberation day" tariffs on April 2. It takes about 20 to 40 days for container ships to sail to the U.S. from China, according to Apollo. Slok estimates that container ships coming to U.S. ports could come to a stop by mid-May.
It then takes about one-to-10 days of transit time for trucking/rail to bring goods from the ports to cities. Apollo Global Management predicts that by late May domestic freight demand will "come to a halt" and that there will be "empty shelves," forcing retailers and others to deal with lower sales.
By early June, Slok forecasts there will be layoffs in the domestic freight and retail industries with a recession hitting the U.S. this summer.
The Wall Street Journal reported Tuesday that the Trump White House doesn't want to publicize trade deals until several can be announced at once. In Washington, D.C., closed-door meetings last week hosted by JPMorgan Chase in front of more than 500 investors, Bessent said that he expects negotiations with China will take between 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.
Slow Down At The Ports
On April 24, Port of Los Angeles Executive Director Gene Seroka said that Trump's trade war policies are expected to bring about a 35% decline in cargo arriving at the Port of Los Angeles by next week as "essentially all shipments out of China for major retailers and manufacturers have ceased."
Port Of Los Angeles Warns 'Difficult Decisions' Ahead As Shipments From China Cease
Seroka added that retailers and manufacturers typically put in orders to factories in Asia around three to four months in advance of shipments and that Trump's 90-day pause on the broad "reciprocal" tariffs resulted in no "real difference" for businesses.
"United States consumers and manufacturers alike will find difficult decisions in the weeks and months to come if policies don't change," Seroka said.
Please follow Kit Norton on X @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Get Full Access To IBD Stock Lists And Ratings
Learning How To Pick Great Stocks? Read Investor's Corner
AI Is Fueling A 'Nuclear Renaissance.' Bill Gates And Jeff Bezos Are In The Mix.
