Last boats from China arrived without high tariffs – prices will soon rise

Last boats from China arrived without high tariffs – prices will soon rise

Some of the last cargo ships carrying Chinese goods without high tariffs are currently docking at US ports. But starting next week that will change.

Changes in import tariffs

Goods on ships from China loaded after April 9 will be subject to the 145% tariff imposed by President Donald Trump last month. Starting next week, these goods will arrive, but there will be fewer ships at sea and carrying less cargo. For many importers, doing business with China has become too expensive.

Important trading partner

However, China remains one of the US's most important trading partners. Many consumer goods, from clothing to shoes to electronics and microprocessors, come from this country and are essential to the operation of many devices.

Difficult decisions for companies

Companies are faced with a difficult decision: Should they continue to sell products from China at more than twice as high prices or remove these products from their range entirely? For consumers, this could mean that some products become difficult to find or prohibitively expensive.

“Next week we will begin to see arrivals following the April 2 tariff announcement,” said Gene Seroka, executive director of the Port of Los Angeles, where nearly half of the business comes from China. “Freight arriving in Los Angeles will be down 35% compared to last year.”

Decrease in imports

Imports into the United States are expected to decline by at least 20% year-on-year in the second half of 2025, the National Retail Federation predicts. The decline in imports from China will be even more drastic: JP Morgan expects a decline of 75% to 80%.

“Unless this can be easily replaced by imports from other countries, a collapse of this magnitude would not only sharply increase prices but also significantly disrupt supply chains,” JP Morgan explained in its report.

Consequences for consumers

That means less work, higher prices on shelves and less choice for consumers. Seroka says the countdown has already begun. “Many major retailers have told us that they currently have about six to eight weeks of inventory,” Seroka said. “Both American manufacturers and consumers will face difficult decisions in the coming weeks and months if policies do not change.”

Idle ships and empty ports

The largest cargo ships lie idle at the port of Shanghai in China. Shipping companies are increasingly using smaller ships to transport cargo as demand weakens. Still, trips from China to the U.S. fell 60% in April, according to Flexport, a logistics and shipping company.

"The companies that operate the ships canceled a lot of sailings. They said, 'We're not going to sail with a ship half full. We're going to leave it here,'" explained Ryan Peterson, CEO of Flexport. “There are many ships waiting off the coast of China hoping for a deal.”

Changes in shipping behavior

In March, the Port of New York and New Jersey became the busiest port in the country as retailers preloaded their cargo before the tariffs took effect. But volumes are expected to decline this month, the port said.

More expensive prices on the shelves

Once cargo reaches U.S. ports, it doesn't take long for the goods to be available in stores. And as current inventory runs out, more expensive, duty-charged items will hit shelves.

"There are a lot of concerns. Right now, retailers are in the process of planning their back-to-school and Christmas orders and how and when they want to place them," said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation.

The challenges for small retailers

While larger retailers can hold more inventory, smaller businesses don't have that luxury. “Particularly for small retailers that cannot absorb the impact of tariffs, figuring out what next steps to take is challenging,” Gold added.

Americans rely on thousands of products from China, everything from flat-screen televisions to strollers. U.S. companies import more toys, clothing and shoes from China than from any other country, according to the U.S. International Trade Commission.

Expected price increases

A recent survey by Gartner, a corporate research firm, shows that 45% of supply chain executives expect to pass on the higher costs of tariffs to their customers.

Seroka doesn't see any empty shelves coming - but he sees less choice. "If you're looking for a certain type of pants, you might find a lot of different pants, but not the type you want. And the type you want will be more expensive," Seroka explained.

But Flexport's Peterson is less optimistic. “If this continues for a few more weeks, retailers will sell through their inventory and by summer you will see shortages and empty shelves,” he said.

Less freight means less work

With fewer cargo ships expected at U.S. ports, the local economy will suffer immediately, Seroka says. Trade with China accounts for 45% of the Port of Los Angeles' portfolio, the largest share of any U.S. port. Without this volume, demand for labor will decline.

“I don’t see any mass layoffs at the port, but I do notice that a truck driver transporting four or five containers today might only be transporting two or three after next week,” Seroka said. "And the dock worker who works overtime and double shifts will probably work less than a full work week because fewer containers are arriving. The same goes for the warehouse workers."

Appeal to the government

The American Trucking Associations has called on President Trump to reach agreements with key trading partners, including Canada, Mexico and China, to protect transportation jobs.

“The longer tariffs remain in place, the greater the pain will be for truck drivers and the families and businesses we serve,” Chris Spear, president and CEO of the American Trucking Associations, said last month. "Tariffs not only reduce border traffic, but also increase operating costs. The cost of a new truck could increase by as much as $35,000, a $2 billion annual tax and making new equipment unaffordable for small trucking companies."

Slow adjustments in the supply chain

Since the supply chain crisis during the pandemic, retailers have sought to shift production from China to Vietnam and other Asian countries with manufacturing capacity. But Gold notes that imports from these other countries are not enough to offset the decline in cargo from China.

"It takes time, months if not years, to build these new relationships. To ensure that the new suppliers have the capacity, the qualified workforce and the necessary infrastructure. All the testing requirements that need to be met for products coming into the U.S., especially children's products," Gold said. “This is not something that can happen overnight.”