Shipments of Goods From China Plunge at the Port of Los Angeles

What Happened?

The executive director of the port of Los Angeles recently told reporters, ‘Essentially all shipments out of China for major retailers and manufacturers have ceased. Many large importers have “hit the pause button on cargo from China”’ because they don't want to pay the tariffs imposed by President Trump. The Trump Administration claims it is getting close to a deal with China, but Beijing denies that is happening.

Why it Matters

The drop in shipping to Los Angeles, which is the busiest commercial shipping port in the United States, is already starting to have ripple effects across the American economy. One of the first segments of the economy to feel the impact of the trade was the trucking industry. 

Craig Fuller, founder of Freight Alley, a firm which tracks commercial shipping trends, recently warned truckers to avoid hauling shipments to Los Angeles, since they would likely have to ‘deadhead’ back home—the industry term for driving an empty load. The reason is the drop off in shipments from China. Without those, truckers could deliver their current cargo to Los Angeles but have nothing to haul for the return trip. 

On X, entrepreneur Molson Hart, posted shipping route data to show that in the next two weeks, containers will stop arriving in Houston and Chicago, and that the same will happen in New York a week later. 

Retailers are estimated to have roughly a six to eight week supply of goods on hand, and if those run out consumers will begin seeing empty spaces on store shelves. Unless the tariffs are lifted or a deal is made with Beijing, goods normally imported from China will begin to run out over the course of the next month.

China is the top single supplier of goods to the United States, accounting for nearly a fifth of all U.S. imports. Last year the United States imported nearly half a trillion dollar’s worth of goods from China. Electronic components, especially those used to make cars, computers, or cell phones, are among the most vulnerable products to supply chain disruptions from sources in China.

Beijing has started exempting some American goods from retaliatory tariffs, and the Trump Administration has indicated a reduction in tariffs may be coming soon. Whether or not that is enough to reassure shippers and suppliers remains to be seen.

How it Affects You

Declining imports from China, if continued, will translate directly into fewer loads for truckers to transport, as well as fewer electronics components available to manufacturers and retailers in the near future. When retailers run out of goods normally imported from China, American consumers will then face shortages and higher prices.