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US and Chinese trade representatives are set to meet in Geneva this weekend for their first face to face meeting in an attempt to deescalate the trade war. Most goods shipping from China to the United States have a 145% tariff, while most US exports to China are being hit with a 125% tariff. On Friday, President Donald Trump suggested lowering the tariff rate with China to 80%, but said the final terms would be up to Treasury Secretary Scott Bessent.
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For consumers, who are facing higher prices or shortages of certain items, Cordero says a deal can’t come soon enough.
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“If things don’t change quickly, I’m talking about the uncertainty that we’re seeing, then we may be seeing empty products on the shelves. This is now going to be felt by the consumer in the coming 30 days,” said Cordero.
Upwards of 63% of the cargo that flows into the Port of Long Beach is from China — the largest share of any US port. But that number is down from 72% in 2016 as retailers shift away from China over simmering trade tensions.
Even so, China still represents a major source of imports into the United States. Maersk, the second largest shipping line in the world, told CNN the cargo volume between the United States and China has fallen by 30-40% compared to normal.
“If we don’t start to see a de-escalation of the situation with China, if we don’t start to see more of those trade deals, then we could be in a situation where some of these effects get more entrenched and are more adverse,” said Maersk CEO Vincent Clerc. |
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On Friday morning, West Coast port officials told CNN about a startling sight: Not a single cargo vessel had left China with goods for the two major West Coast ports in the past 12 hours. That hasn’t happened since the pandemic.
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Six days ago, 41 vessels were scheduled to depart China for the San Pedro Bay Complex, which encompasses both the Port of Los Angeles and Port of Long Beach in California. On Friday, it was zero.
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President Donald Trump’s trade war imposed massive tariffs on most Chinese imports last month. That’s led to fewer ships at sea carrying less cargo to America’s ports. For many businesses, it is now too expensive to do business with China, one of America’s most important trading partners.
Officials are concerned not just about the lack of vessels leaving China, but the speed at which that number dropped.
“That’s cause for alarm,” said Mario Cordero, the CEO of the Port of Long Beach. “We are now seeing numbers in excess of what we witnessed in the pandemic” for cancellations and fewer vessel arrivals.
The busiest ports in the country are experiencing steep declines in cargo. The Port of Long Beach is seeing a 35-40% drop compared to normal cargo volume. The Port of Los Angeles had a 31% drop in volume this week, and the Port of New York and Jersey says it’s also bracing for a slowdown. On Wednesday, the Port of Seattle said it had zero container ships in the port, another anomaly that hasn’t happened since the pandemic.
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