There’s some worrying news about the economy in the United States. Experts believe that President Donald Trump’s ongoing trade war with China is going to seriously affect American businesses and shoppers this summer.
What’s Happening?
A report from Apollo Global Management explains that by mid-May, Americans might start seeing the impact of new tariffs, which are taxes on goods imported from other countries. This could mean empty store shelves, stopped freight shipments, and even a potential recession (a period when the economy slows down) by June.
How Will It Happen?
Torsten Slok, an economist at Apollo, shared a timeline. When President Trump announced his “liberation day tariffs” on April 2, it takes about 20 to 40 days for ships to travel from China to U.S. ports. So, Slok thinks that by mid-May, cargo ships may stop arriving in the U.S. It also takes about 1 to 10 days to deliver those goods from ports to cities. By late May, there may be no demand for domestic freight, causing empty shelves as companies adjust to lower sales.
By early June, we could see job losses in the freight industry, and retail stores might enter a recession this summer.
What’s the Shipping Situation?
Logistics companies like Flexport have noted a big drop in shipments from China to North America, with cancellation rates hitting 50%. This level of cancellations hasn’t been seen since the early days of the COVID-19 pandemic.
Jeffrey Kleintop, a Chief Global Investment Strategist, stated that even though ports have been receiving a lot of cargo recently, future bookings have low demand and high cancellation rates.
Retailers Are Getting Ready
The National Retail Federation (NRF), which represents major retailers like Walmart and Target, warns that U.S. cargo import volumes could drop by at least 20% compared to last year in the second half of 2025. This is mainly because businesses are stopping orders from China due to trade issues.
Frequently Asked Questions
How do tariffs affect shipping?
Tariffs have slowed down shipping a lot, with reports showing a 50% cancellation rate for shipments from China.
Will stores run out of products soon?
Yes. By late May, domestic shipping might completely stop, leading to fewer goods in stores.
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