On the eve of the Trump tariffs taking effect, many companies chose to import large quantities of goods to the US and stock up in advance to mitigate the impact of the tariffs, which drove a surge in US container imports in April this year. However, executives from two of the US's busiest ports indicated that this trend is expected to reverse in May.
US container imports in April approached record highs
On Thursday, Eastern Time, supply chain technology provider Descartes released data showing that US container imports in April increased by 9.1% YoY, reaching 2.4 million twenty-foot equivalent units (TEUs), the second-highest monthly record on record.
China is the US's largest maritime trading partner. In April, US imports from China jumped by 6.2% YoY, accounting for 33.4% of total US imports.
On April 9, Trump imposed a 145% tariff on China, more than doubling the cost for US consumers to purchase goods from China. Trump also imposed a 10% tariff on many other countries and threatened that these tariffs could rise even higher.
Gene Seroka, Executive Director of the Port of Los Angeles in the US, stated thatimports at the Port of Los Angeles are expected to decline by 35% YoY this week.
The Port of Los Angeles is the largest seaport complex in the US and a major gateway for US imports from China. Many goods entering the Port of Los Angeles and the neighboring Port of Long Beach are transported across the US mainland by trucks and trains.
Seroka added that due to weak demand, many major cargo ship operators have canceled scheduled voyages,and vessel traffic in May may decline by approximately 20%.
He revealed that the Port of Los Angeles originally expected 80 ships to arrive in May, but 20% of these have been canceled. Additionally, as of now, customers have canceled 13 voyages for June.
Mario Cordero, CEO of the Port of Long Beach, predicted that the total throughput of the two ports in May will decline by 30% YoY.
The full impact of tariffs has yet to be fully realized
Shipping giant Maersk also recently stated that due to the trade war between the world's major economies, container freight volumes between the US and China declined by 30-40% in April. Given the time it takes to cross the Pacific,this decline may be reflected in US import data for May.
Maersk also warned that a protracted trade dispute could lead to a contraction in global freight volumes this year.
The decline in freight volumes at West Coast ports not only affects the cost of living for US consumers but also has a ripple effect, impacting employment in the US port and trucking industries.
When asked on Thursday, Eastern Time, about his views on the impact of reduced freight volume on employment in related industries, Trump said, "It means we're losing less money."
However, Trump did not elaborate on how the decrease in the supply of US goods would lead to a reduction in US losses.
US maritime imports are a closely watched indicator of the health of the US economy, as they encompass nearly all goods purchased by Americans, as well as the raw materials for many products manufactured by domestic factories. Historically, US port throughput has declined during economic recessions and global disasters, including the COVID-19 pandemic.
Descartes stated that the US's ever-changing trade policies and retaliatory measures by its trading partners, along with ongoing instability in the Middle East and Eastern Europe, have increased the risk of disruptions to the global supply chain.