[WORLD] President Donald Trump's aggressive tariff escalation on Chinese imports has rattled both Washington and Wall Street for weeks. Now, its effects are poised to ripple through American households and businesses.
Since early April, when U.S. tariffs on Chinese goods surged to as high as 145%, shipping volumes have dropped sharply—potentially by as much as 60%, according to one estimate. While the average American consumer has yet to feel the full impact, that moment is quickly approaching.
The fallout is spreading beyond the retail sector. Manufacturers that rely on Chinese inputs—from electronics to auto components—are reporting delays. A National Association of Manufacturers survey shows that 70% of firms expect higher costs, with some preparing to pass these on to consumers or cut production.
By mid-May, a critical restocking period will begin for thousands of companies. Major retailers, including Walmart and Target, warned Trump in a recent meeting that continued disruptions could lead to empty shelves and rising prices for consumers. Torsten Slok, chief economist at Apollo Management, likened the situation to pandemic-era shortages, cautioning of job losses across logistics, retail, and trucking.
The U.S. labor market faces mounting risks. Moody’s Analytics estimates up to 250,000 jobs are at stake, mostly in warehousing and transportation. Smaller businesses, lacking the leverage of large corporations, may have no choice but to absorb rising costs or close shop.
Although Trump has hinted at some flexibility in recent days, experts warn the damage may already be underway, potentially triggering a widespread supply shock that could last into the holiday season.
“The clock is absolutely ticking,” said Jim Gerson, president of The Gersons Companies, a Kansas-based holiday décor supplier. Gerson's firm sources over half its inventory from China and currently has 250 containers stuck in transit. “We need a resolution soon,” Gerson urged. His family-run business, founded 84 years ago, generates about $100 million in annual sales.
The political stakes are rising, too. With the November elections looming, Trump’s trade tactics are becoming a campaign issue. Inflation remains a top concern among voters, and Democrats are leveraging the disruption to portray the administration’s strategy as economically destabilizing. Even some Republican lawmakers are reportedly pressing for a policy shift behind closed doors.
Even if trade tensions ease, resuming regular commerce won’t be seamless. The freight sector has already scaled back capacity due to waning demand. A sudden surge in shipments could overwhelm logistics networks, causing fresh delays and higher costs.
This exact scenario unfolded during the pandemic, when shipping costs soared and ports clogged with container backlogs. “Ports are designed for steady flows, not abrupt starts and stops,” said Lars Jensen, CEO of shipping consultancy Vespucci Maritime.
The timing couldn’t be worse for the retail industry. March and April mark the beginning of stockpiling for the back-to-school and holiday shopping seasons. For many businesses, the first wave of Christmas inventory should be en route in just weeks.
“We’re paralyzed,” said Jay Foreman, CEO of Florida-based toy maker Basic Fun, which supplies major retailers like Amazon and Walmart. Calling the tariffs a “de facto embargo,” Foreman said customers are holding off on orders—and may start canceling them altogether if tariffs persist.
“There’s a short window before the damage becomes much harder to control,” said Foreman, whose company relies on China for about 90% of its production and brings in $200 million in annual revenue.
Shipping data shows the slowdown is already being felt. Roughly 40 container ships that recently departed Chinese ports are currently en route to the U.S.—a drop of about 40% since early April, Bloomberg tracking shows. These ships are carrying roughly 320,000 containers, down by a third from volumes seen before the tariff hikes.
To mitigate the shock, some U.S. importers are front-loading orders from alternative trade partners during the 90-day grace period on Trump’s "reciprocal tariffs," said Judah Levine, head of research at Freightos. Southeast Asian exporters—particularly in Vietnam, Thailand, and Cambodia—are seeing a bump in orders as Chinese goods become prohibitively expensive.
Still, Levine warns, the economy may be headed into turbulent waters. “A slowdown seems inevitable,” he said. “And when trade picks up again, the recovery could overwhelm infrastructure, with the scale of disruption tied to how long the pause lasts.”
In a bid to stabilize freight rates, carriers are slashing capacity. April saw around 80 cancelled sailings from China to the U.S.—60% more than in any month during the pandemic, according to shipping veteran John McCown.
“The container shipping industry is facing some of the strongest macroeconomic headwinds in its history,” McCown wrote in a recent note. The World Trade Organization has projected that U.S.-China trade could shrink by as much as 80%, a figure echoed by Treasury Secretary Scott Bessent, who labeled the situation “effectively a trade embargo.”
Economists now view a U.S. recession as nearly a 50/50 probability. Bloomberg forecasts indicate a 7% annualized drop in imports in Q2—the steepest decline since early 2020. The anticipated supply shock is pushing inflation expectations higher. Some executives predict that prices for Chinese goods could double. This comes as consumer sentiment continues to slide.
If the tariffs stay in place for a few more weeks, suppliers and retailers will face tough choices—whether to reduce imports, hike prices, or cut costs. That could mean canceled orders, last-minute sourcing from other markets, and deeper cost-cutting, including layoffs or new debt burdens. Foreman said the current environment is reminiscent of the early pandemic, but potentially more damaging in the long run.
“This could be more dangerous,” he said. “Back then, things were uncertain—but we rebounded quickly. Now, we know what’s wrong. The solution is simple: lift the tariffs.”
“But the longer this drags out,” he added, “the more severe the fallout becomes.”
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