LA Port Receives First Chinese Shipments Hit by 145% US Tariff

The first cargo ships carrying Chinese goods under a steep 145% US tariff are now arriving at ports in California. As a result, Chinese imports have plummeted, and American businesses are bracing for higher prices and potential shortages.

Officials confirmed that shipping activity has significantly slowed at the Port of Los Angeles. According to the port’s executive director, Gene Seroka, imports this week have dropped by around 35% compared to the same period last year.

The ships now docking are the first to carry cargo subject to the hefty tariffs imposed in April. Seroka stated that the volume of cargo from China aboard these ships has dropped by over 50%.

Many US importers have cancelled previously placed orders to avoid paying the steep duties. “Retailers and importers alike are telling me that the products now cost about two and a half times more than they did just last month,” Seroka reported.

Initially, 80 ships were scheduled to arrive in Los Angeles during May, but about 20% of those have already been cancelled.

Another 13 sailings for June have also been scrapped, a clear sign of businesses pulling back from sourcing goods from China due to cost concerns.

Flexport CEO Ryan Petersen explained that some retailers are opting to store goods in Chinese warehouses instead of bringing them to the US, as the storage costs are now lower than the import taxes.

Petersen estimated that if this continues, there could be a 60% drop in deliveries. “A 60% decline in containers means 60% less stuff arriving,” Petersen said, suggesting it’s only a matter of time before retailers exhaust existing inventory and shoppers begin seeing fewer choices and higher prices on store shelves.

The National Retail Federation predicts that overall imports to the US will fall by at least 20% in the second half of 2025. The reduction from China is expected to be even more severe, with JP Morgan forecasting a dramatic 75% to 80% drop in shipments.

For now, American consumers are still purchasing goods that were stocked in warehouses before the tariffs hit. But those inventories are running low.

Petersen warned that if the trend continues, by summer, shortages and empty shelves could become a reality. Seroka added that while shelves may not go completely empty, product variety will shrink, and the cost of preferred items will rise.

The heavy front-loading of imports ahead of the tariff implementation also pushed the US trade deficit to a record $140.5 billion in March. Businesses scrambled to bring in goods before the new rates kicked in on April 2, leading to a surge in Q1 imports.

Daniel Vielhaber, an economist at Nationwide, wrote in a client note that this pre-tariff stockpiling helped fuel inflation, which is now expected to put further strain on consumer spending and slow overall economic growth.

Despite the April tariff hike, some goods will still enter the US without the new duties if they were already in transit or loaded before the April 2 announcement and arrive before May 27, 2025.

Economists at Wells Fargo expect a final wave of imports in the April data, but beyond that, they foresee a steep trade slowdown.

One vessel already caught in the tariff storm is the OOCL Violet, which recently docked at the Port of Long Beach. The ship began loading goods in Dalian, China, just before the tariffs escalated. It carried an estimated $564 million worth of cargo, with around 40% of that now subject to the 145% rate.

This could result in over $417 million in new duties for American importers. By the time the ship left its final port in Shanghai, a new round of tariffs had kicked in just hours earlier-raising rates to their highest levels yet.

That last-minute change alone is believed to have added $220 million to the total cost of the goods onboard.

Among the products onboard were lawnmowers, fish, sneakers, forklifts, bras, pasta, wheelchairs, medical gloves, and car windshields.

A representative from Worldlawn Power Equipment, a company based in Nebraska with products on the Violet, said they were blindsided by the rapid tariff increases and are now trying to reassess their supply chain strategy.

“There were goods already on the water,” the company representative said, explaining that the company is still uncertain whether the change is temporary or long-term.

The tariffs’ financial impact will ultimately depend on customs processing and the specific product details declared by importers. Bloomberg News, referencing data from IHS Markit, stated that some duties may still vary depending on when and how the goods are released from ports.

References: CNN, Bloomberg

Source: Maritime Shipping News