US Store Shelves at Risk as China Shipments Plummet
Imports from China to the United States collapsed in April and with key shopping seasons on the horizon, whilst US retailers are warning that shelves could start to look alarmingly empty.
From school supplies to festive goods, items consumers take for granted are now at risk of not arriving in time.
Cargo ships leaving China for the US are down by 40% since early April. The number of containers they carry has dropped by one-third. That sharp fall coincides with US President Donald Trump’s introduction of 145% tariffs on Chinese imports, described by Treasury Secretary Scott Bessent as a “trade embargo.”
The result is a knock-on effect across the supply chain, just as retailers gear up for the back-to-school and holiday sales periods.
John D. McCown from the Centre for Maritime Strategy, points out that ocean carriers have cancelled 80 sailings from China to the US during April.
“It’s a fair statement to say that the container shipping sector has never faced the sort of macro headwinds that it is now facing,” he writes.
His figures show this is about 60% more cancellations than in any month during the Covid-19 disruption of 2020.
Retailers usually begin restocking for peak seasons by mid-May, but that schedule is already slipping. Although companies placed early orders this year to stay ahead of potential issues, the continued drop in imports has raised fears of shortages.
Apollo Management economist Torsten Slok compares the current situation to the early days of the pandemic, warning that “each passing week of reduced shipments increases the prospects of ‘Covid-like’ shortages.”
Port activity slows as trade talks stall
The main gateway for Chinese goods into the US, the Port of Los Angeles, is already feeling the strain. It expects one-third fewer cargo arrivals next week compared to the same time last year.
Flexport, a global logistics company, reports a 65% drop in cargo volume from China to the US just three weeks after the tariffs took effect.
The consequences go far beyond store shelves. “Expect ships to sit offshore, orders to be canceled, and well-run generational retailers to file for bankruptcy,” warns Torsten.
He adds that by the end of May, domestic freight demand may “come to a halt,” potentially followed by mass layoffs in logistics, trucking and retail by June.
Retail giants have taken their concerns directly to the White House. Executives from Walmart, Target and Home Depot met with President Trump last week to warn him about supply threats and the possibility of empty shelves. While the Trump administration says talks with China are under way, Chinese officials deny any active negotiations.
Even if there is a breakthrough, the logistics challenge remains daunting. Shipping goods from China to the US takes between 20 and 40 days.
After that, moving products from port to store can add another 10 days. If shipments resume all at once, it could overwhelm the transport network. “Ports are designed for stable flows, not the off-again, on-again volume shifts,” the Chief Executive of Vespucci Maritime told Bloomberg.
Retailers scramble for alternatives
In an attempt to mitigate the impact, some businesses are turning to other Asian manufacturing centres. Vietnam and Cambodia have seen a rise in demand, helped by the fact that their goods are not currently subject to the same tariff hikes.
However, shifting supply chains takes time, and US retailers still face pressure to restock by mid-May.
Whether or not shoppers will notice empty shelves in June or July depends on how swiftly the situation changes.
As things stand, economists and supply chain experts are bracing for a difficult summer and potentially a very thin Christmas.
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