CNN
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US ports have been seeing pandemic-level declines in imports, so good news on tariffs was just what port officials were hoping for.
For awhile on Wednesday, it looked like retailers and ports got exactly that, with a court blocking many of President Donald Trump’s tariffs. But a federal appeals court on Thursday quickly paused that ruling.
That kind of whiplash underscores why, even when there’s news of tariffs easing, goods don’t start flowing into US ports right away. And that could mean fewer goods on store shelves in the coming months, cutting into available choices and raising prices for everyday Americans.
Indeed, last month, imports declined by a whopping $68.4 billion, according to advanced trade data released by the Census Bureau on Friday. This came after retailers stocked up on goods in March, aiming to get ahead of tariffs. But the stunning decline in imports could mean retailers have less of an inventory buffer, leaving them less able to avoid paying future tariffs — and that could lead to price increases for US consumers.
“I think there was an expectation that all of a sudden everything would start coming in again. I don’t think you’ve seen that huge rush to bring everything in again because I think folks are still being cautious on how this is going to proceed,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
Even after Trump lowered tariffs on China from 145% to 30% earlier this month, America’s largest ports have yet to see a rebound. The Port of Los Angeles reported a 30% import decline during the final week of May compared to last year. The Northwest Seaport Alliance, which represents the ports of Seattle and Tacoma, says imports also dropped by 30% from the last week in April to the first week in May, and volume is significantly lower compared to last year.
Then Wednesday evening’s decision by a US court in Manhattan injected new chaos into the trade picture. The ruling blocked a swath of Trump’s tariffs, including a 10% tariff on most imports and the higher duties on China, Mexico and Canada. The White House filed an appeal, and by Thursday afternoon a federal appeals court restored the tariffs until both sides provide written arguments by early next month.
The back and forth is confusing enough for any retailer trying to do business, especially when they have to plan weeks or even months in advance.
“It’s kind of a ping pong back and forth. We’re trying to understand what’s on, what’s off. So it’s very difficult for retailers to try and plan ahead,” said Gold.
As retailers sit confused, fewer containers are headed for America’s ports. The 30% tariff on China was already proving too costly for many retailers to bring more inventory into the United States, according to Gene Seroka, executive director of the Port of Los Angeles. About 45% of the port’s cargo comes from China.
Those that can afford the cost are shipping already-manufactured products, but no new factory orders are being placed, he said.
“With the whipsaw effect of information that continues to come out on trade policy and tariffs – many continue to take the wait-and-see approach,” Seroka told CNBC on Thursday.
Things are improving for the Port of LA, albeit slowly. In the first week of June, 96,000 large cargo containers are expected to arrive, up from 69,000 in the final week of May. By the second week of June, 106,000 containers are expected. That’s a jump, but that’s still a loss of 9.4% from last year, according to port data.
“We’re nowhere near where we should be heading into the first two weeks of June. We still have 10 cancelled sailings of scheduled vessel arrivals for June – half of those are in the first week,” Seroka said. “So we are not seeing an uptick like some observers had called for or a big surge. It’s a moderate uptick to catch up to where we were.”
It’s not just cost – businesses are also facing a time crunch. The 90-day pause on reciprocal tariffs is set to expire on July 9, and the 90-day pause with China expires on August 12.
“Ninety days of this reprieve is a short time in our business. That’s typically the amount of time that it takes to put an order in, get the goods manufactured and ready to ship here to LA,” Seroka said.
Still, some experts say a surge may manifest, but what it looks like is hard to predict.
“There’s probably not going to be an issue with empty shelves, but I think there will be additional costs being potentially passed on to consumers, because what we’re seeing is all this uncertainty has a cost,” said Daniel Hackett, a partner at Hackett Associates, a maritime strategy and trade logistics company.
A number of large retailers, such as Walmart, Home Depot and Target, have already said they will increase prices to mitigate the impact of tariffs.
“You have supply chains, and they like predictability. They like certainty,” Hackett said. “It’s just that uncertainty is adding costs, if nothing else.”
