Retailers warn that American consumers could once again face the shelves of empty stores and the type of grunts of the supply chain that marked the Covid era if the tariffs of President Donald Trump about China remain at their current levels.
Companies have been canceling their shipments from China and stopping new orders after Trump put a 145% tariff on almost all Chinese imports this month. As a result, the number of cargo ships scheduled to reach the port of Los Angeles is on the way to decrease 33% year after year for the week ending on May 10, according to the follow -up data of Port Optimizer ships.
In general, American retailers would increase their orders for two critical periods at the end of this year: the season of return to the Autumn School and Winter Vacations. And the recoil is creating uncertainty about whether American buyers will have the selection of products to which they have become accustomed in the coming months.
“They are making their vacation purchase decisions now,” said Jonathan Gold, vice president of the supply chain and the customs policy of the National Retainer Federation. “It is a challenge for people to discover how adequate order and price with all the uncertainty that must be done in rates.”
At the current rate, a company based in the United States would have to pay at least $ 145 in customs tariff rates and border protection to import an item valued at $ 100, except electronics and pharmaceutical products, which are collected at a lower rate. That rate could eliminate any gain that a company would get and force to sell its products with losses or raise prices at levels that consumers may not be willing to pay.
Chinese suppliers told NBC News this month that American companies, including Target, have stopped orders. A seller who sells press nails to American retailers said their products are ready to send but have been sitting in China. She does not expect to send any product to the United States in the first half of the year.
The Retail Federation expects imports to decrease by 20% in the second half of the year if tariffs continue at its current rate.
Some of the products are more likely to be missing on store shelves in the coming months will be lower cost, clothing, toys and electronic products, for which manufacturing is very concentrated in China, Gold said. Other perishable articles from China, such as apple juice and fish, have a limited life of shelf and were more difficult to accumulate for retailers.
“Like Covid, where we had a shortage of toilet paper, we will begin to see that in more and more goods,” said Sean Stein, president of the Us-China Business Council. “Starting in a couple of weeks, we will start running out of things, and if the administration hopes to solve the problem until we have scarcity and hoarding, that is too late.”
The threat of the shelves of empty stores has seemed to increase alarms inside the White House, more than months of warnings of companies about the increase in prices, said a person familiar with business lobbying efforts around rates. Trump administration officials seemed particularly concerned about the shortage of products on vacation, such as July 4 and Christmas, the person said.
After a meeting with the main retailers this week, Trump said Wednesday that he was considering reducing tariffs on China, although he has not taken any formal measure. He said Thursday that his administration met with Chinese officials, but earlier in the day, Chinese officials denied there have been formal commercial conversations with the United States.
While some retailers had been increasing shipments from China before rates, buying some time to spend summer, that was not an option for many smaller companies that generally do not have money or leverage with their manufacturers to increase production levels.
Jessica Berger, founder and executive director of the Pet Company Bundle X Joy, could not stop the last sending of dog toys and other pet accessories to leave China before the 145%tariffs came into force.
Now, it faces a draft rates of $ 180,000 of customs and border protection when the articles arrive in the United States. Berger said his company, which also obtains income from your pet foods made in the United States, may use existing financing to cover the cost of rates, but that is not the case for all small businesses.
“Fortunately for me, I have the resources, but six months ago, I would not have done it. Potentially I would have taken me out of the business,” said Berger, who sells his products in national retailers like Walmart. “That’s how cash is like a small business. We have no mass lines and all these different things.”
Since almost all dog toys are made in China, Berger does not see an alternative for manufacturing. And for his future orders for products, such as those who are committed to selling to retailers during the holidays, he said he will have to increase their prices to cover the cost of rates if those tasks remain much longer. But she also has I have been listening to other small businesses that stop their production from China.
“I think you will see a very limited supply of discretionary items, and the consumer may not buy so much because the products will not be available, and if they are, they will be much more expensive,” he said.
For importers who cannot or are willing to pay tariffs on their assets that arrive in the coming weeks, that could lead to thousands of containers of unresated goods in US ports that obstruct the supply chain, similar to Covid, Stein said.
“We could have thousands of gumming trapped containers for the port,” Stein said. “It’s going to be a train accident.”
Even if Trump reduced the rates, the interruption caused to the supply chain could take weeks or months to unravel, Given the time that takes the ships through the Pacific and that the other pieces of the supply chain return in place.
“You have a period of eight weeks in which the volumes are blocked before they can rise again, and that is whether things return to normal,” said Dean Croke, main analyst at Dat Freight and Analytics. “All this arrives at a time of the year when volumes should really begin to increase.”
He said that the reduced flow of imports to the port will have a drip effect on the rest of the maritime transport industry. The trucks that were transporting products outside the port will now change to another part, flood the truck market with an excess capacity and reduce rates to the trucks paid to transport their products. That fall in the demand for drivers, together with a slowdown in other areas of the economy, such as the manufacture and construction of housing, could make the truckers leave the industry and contribute to the shortage of drivers later.
“You can carry well in the second half of this year before truck load volumes recover,” Croke said. “Even if everything returned to normal now.”
