How Tariffs Shook America’s Ports: Brace for a Stockpiling Surge Ahead | CNN Business

US ports are witnessing a significant slowdown in cargo traffic, but the tides might soon turn. Starting Wednesday, cargo from China to the US will be subject to a 30% tariff, down from a staggering 145% that was in effect for the past six weeks. This change comes as part of a temporary relief plan aimed at easing trade tensions between the two nations.

Experts predict that retailers will likely rush to import goods during this pause in tariffs. Jonathan Gold, from the National Retail Federation, noted that many retailers are eager to stock up before potential new tariffs kick in. “It’s a crucial time for holiday inventory,” he said. Just like earlier this year, when businesses stockpiled goods before tariffs hit, we may see similar behavior now.

Flexport, a logistics company, anticipates a surge in cargo bookings but cautions that it’s too early to predict the full impact. Economist Peter Boockvar also weighed in, suggesting we could see unprecedented ordering momentum in the next 90 days. However, he worries that the costs of transporting goods will spike as demand increases.

Despite this optimistic outlook, West Coast ports project a decline in activity this month. Gene Seroka, the Port of Los Angeles director, mentioned they expect ship calls to drop by 20% and cargo volume by 25%. The Port of Long Beach faced a significant cargo drop as well, with no ships leaving China for a 12-hour period last week—a rare occurrence.

The Port of Seattle also reported having empty docks, which has not been seen since the pandemic began. The Northwest Seaport Alliance predicted an 8% to 15% drop in volume when compared to usual times.

Looking at historical trends, this situation echoes events from prior tariff implementations. Trade fluctuations, uncertainty, and market disruption often follow such government decisions. The Northwest Seaport Alliance pointed out that the consequences of tariffs last longer than their removal. Consistency is key for a smooth supply chain, and both cargo surges and reductions can create complications.

Additionally, while a 30% tariff is lighter than 145%, it remains too steep for many small businesses. The US Chamber of Commerce emphasized that tariffs are still significantly higher than they were earlier this year and renewed calls for exemptions for smaller retailers.

As we navigate these changes, industry experts remind us that while larger retailers may have more resources to handle tariffs, many smaller companies could face uphill battles. There’s much uncertainty ahead, and discussions about these challenges are ongoing.

For more details on the impact of tariffs on US trade, check this report from the US Chamber of Commerce.

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