With even large companies maintaining only four to six weeks of inventory, U.S. consumers are likely to see reduced options on shelves and higher prices unless major changes occur in the tariff situation, warned Gene Seroka, Executive Director of the Port of Los Angeles. Small and medium-sized importers face even greater challenges due to limited inventory capacity, Seroka said at a meeting of the Los Angeles Board of Harbor Commissioners. “If nothing happens, or there are no changes in these trade frameworks, we’ll start seeing spot shortages and fewer selections on store shelves and websites where we try to buy online,” he said. The port was the country’s largest by import volume in 2024. Major retailers have halted imports from China due to product prices being two and a half times higher than they were just last month, Seroka said, adding: “Importers simply cannot justify these costs.” “Arrivals this week at the Port of Los Angeles will be down on the import side of our business, 35%, year-over-year,” Seroka said. The port expects 17 “blank sailings” – referring to a ship that either skips a scheduled port stop or cancels its voyage – out of more than 80 planned vessel arrivals in May, he noted.
The warning came a day before Chinese and U.S. officials said they were preparing for face-to-face discussions on tariffs and trade in Switzerland, which would mark the first such talks since the trade war escalated this year. Christopher Tang, Professor of Business Administration at the UCLA Anderson School of Management, said that front-loaded inventory – from retailers stocking up before the tariffs kicked in – will become depleted, and the decline in shipments means fewer goods will be available for purchase. But he did not expect shelves to be empty, as consumers are buying less due to high prices. Inventories of products mainly produced in China, such as toasters, prams and kitchen gadgets, will be noticeably affected, while goods such as toys and apparel that can be sourced from Vietnam and other countries will be less impacted, Tang said.
Amid the slow flow of goods, imported-related lay-offs have surged since early April, with more than 1,000 job cuts announced across several southeast states, according to FreightWaves, which provides supply-chain markets with data analysis. The U.S. Federal Reserve said that the risks of higher unemployment and higher inflation have risen. “We don’t have the kind of tools that are good at dealing with supply-chain problems,” FED Chairman Jerome Powell said in a CNN interview. Powell noted that, in theory, the FED could lower interest rates to boost demand, but “that would be a very inefficient way to try to fix supply-chain problems”. Carriers have been “aggressively withdrawing capacity” since April, according to maritime research firm Drewry. Data from the maritime consultancy showed that scheduled shipping capacity on the “Asia to east coast North America” lane was down 22% in April and 18% in May. And on the “Asia to west coast North America” route, the scheduled shipping capacity was cut by 20% in April and 12% in May, the South China Morning Post reports.
