TLDR
- Trump’s tariffs have caused a 64% drop in container shipments from China to the US
- Ocean container rates between Shanghai and Los Angeles have halved
- Retail executives warn of potential empty shelves within weeks
- Airlines including American, Southwest, and Delta have pulled their 2025 outlooks
- Tourism and hospitality sectors report declining bookings, particularly from international travelers
President Trump’s escalating trade war with China is causing major disruptions across multiple sectors of the US economy, from shipping and retail to travel and tourism. The effects are becoming increasingly visible as businesses and consumers adapt to new economic realities.
Shipping Crisis Looms
Container bookings from China to the US plummeted 64% in the first week of April compared to the previous week, according to logistics data platform Vizion. The drop affected numerous product categories, with apparel, fabrics, and textiles experiencing the most dramatic declines.
The shipping route between Shanghai and Los Angeles has seen container rates cut in half. This price drop reflects severely reduced demand for this critical shipping lane.
Voyage cancellations have risen sharply in the past week. Maritime analysis firm Sea-Intelligence described this as “a dramatic change in the market” in a Thursday report.
The slowdown comes after Trump raised minimum tariffs on Chinese imports to 145% earlier this month. China has responded by increasing its tariffs on US goods to 125%.
Trump has recently suggested the tariffs won’t remain at current levels. “It will come down substantially but it won’t be zero,” he told reporters in the Oval Office.
Retail Concerns Growing
The effects of shipping disruptions may soon reach consumers. Ocean freight typically takes about a month to travel from China to the US West Coast and up to two months to reach the East Coast.
Treasury Secretary Scott Bessent described the current situation as “effectively a trade embargo” between the two countries, calling it “unsustainable.”
Executives from major retailers including Walmart, Home Depot, and Target met with Trump this week. They warned that the trade war could lead to higher prices and empty store shelves within weeks.
Some companies rushed to bring goods into the US ahead of the tariffs. Regional Federal Reserve Banks reported strong cargo activity in March and early April as businesses built up inventory.
Ryan Petersen, CEO of supply-chain logistics company Flexport, warned on social media that without a quick reversal in policy, “Covid-19 style supply-chain snarls could be on the way.”
Travel Industry Hit Hard
The summer travel season looks bleak compared to recent years. Major airlines including American Airlines, Southwest Airlines, and Delta Air Lines have pulled their financial outlooks for 2025, citing uncertainty affecting demand.
The Federal Reserve’s latest Beige Book contains numerous reports of declining tourism. Cape Cod businesses noted slower first-quarter performance and weaker summer bookings compared to recent years.
Travel from Canada has fallen, and businesses fear summer travel from Europe and China could suffer due to negative reactions to US tariff policies. New York City hotels report fewer international reservations.
In Florida and other southern states, hotel stays are shorter and business travel has decreased. Major attractions that typically draw international visitors have seen fewer travelers from abroad.
The San Francisco Fed district reported, “Consumer demand for air travel, hotels, and entertainment events slowed — an atypical trend for the early spring growth period.”
Other economic concerns extend beyond shipping and travel. Businesses that rely on immigrant labor report worker shortages. Car dealers have seen a surge in demand as consumers try to buy before price increases take effect.
The Dallas Fed summarized the situation: “Numerous contacts voiced concern that heightened uncertainty stemming from on-again, off-again tariffs was making it increasingly challenging to plan.”
Even if Trump softens his tariff stance, economic recovery may take longer than the time it took for the damage to occur. The ripple effects of these policies are already reshaping consumer and business behavior across the American economy.
