President Donald Trump’s sky-high tariffs on China have prompted many US importers to halt sourcing from the world’s factory floor, causing disruptions in global shipping not seen since the Covid-19 pandemic.
Facing a 145% levy on most imports from China, many US companies have paused or canceled orders. In turn, global shipping companies are sailing between Chinese and US ports much less.
At the Port of Los Angeles, one of the busiest US ports handling containerized goods from China, executive director Gene Seroka on April 24 predicted a 35% plunge in import volumes over the coming two weeks as “essentially all shipments out of China for major retailers and manufacturers have ceased.”
Container bookings from China to the US fell by 44% on the year in the week of April 14, according to shipping tracker Vizion, after Trump’s April 2 “reciprocal” tariff announcement pushed the rival superpowers into a cycle of retaliation against each other. A gauge of container freight costs departing from Chinese ports dropped to the lowest level since January 2024.
Worldwide, container shippers skipped at least 80 planned sailings in April. That exceeds the 51 that were scrapped in March 2020, when Covid-19 lockdowns ensnarled global supply chains, data from Sea-Intelligence shows.
“Customers right now are very much in a ‘wait-and-see’ mode,” said Christian Roeloffs, CEO at Container xChange, a Hamburg-based container operator.
Torsten Slok, chief economist at Apollo Global Management, a private equity firm, warned in a note last week, “The consequence will be empty shelves in US stores in a few weeks and Covid-19-like shortages for consumers and for firms using Chinese products as intermediate goods.”
The trade war-induced plunge in goods moving between the two largest economies is already dimming the world’s prospects. Global growth is forecast to slow to 2.3% this year, below the 2.5% threshold that often marks a global recession, as manufacturers and investors delay decisions due to highly uncertain trade policy, according to United Nations Trade and Development.
China’s factory activity index for April was the weakest in more than a year due to sinking export orders. Many economists expect exports to drag on China’s growth from the second quarter.
Executives say the pinch is real.
Patrick Soong, who helps US companies such as Peak Design source goods like backpacks, tripods and toys from Asia, saw most of his clients pause orders in China after Trump’s April 2 bombshell.
“The indefinite pause means no activity for manufacturers,” said Soong, CEO of Portland, Oregon-based Allitra. “There’s not a whole lot of margin typically involved in manufacturing. So when orders stop coming for one month, two months, six months, that’s death for them.”
Jacob Rothman, co-founder and CEO of Velong Enterprises, which makes kitchen and grilling accessories for retailers around the world including Walmart, said he has been losing sleep. He fears “Americans won’t get goods” due to the high levies and that, in effect, “Trump canceled Christmas.”
“Every day, our ability to execute orders is compounded by the need to balance cash flow, which means potentially laying off workers in China,” said Rothman, who owns a factory in the southern Chinese city of Yangjiang as well as production sites in Cambodia and India. “I have this Faustian bargain between protecting my customers and my workers.”
There are some signs that Beijing and Washington may be seeking to ease tensions. The US granted tariff exemptions on consumer electronics such as smartphones and computers from China, while Beijing is mulling excluding some US goods such as chemicals and semiconductors from its 125% import levies.
Nevertheless, analysts predict negotiations will drag on, clouding the shipping outlook.
For eastbound trans-Pacific sailings alone, London maritime consultancy Drewry predicted that the number of cancellations rose to 65 during the three weeks from mid-April. The firm said that “uncertainty remains high, leading to a drop in export bookings from China and a surge in blank sailings.”
Meanwhile, ZIM Integrated Shipping has suspended its shipping service between China and Los Angeles, launched less than a year ago, due to a lack of Chinese exports.
Hefty fees on China-linked vessels calling at US ports are also set to take effect later this year, producing yet another headwind. And even if there is a sudden bargain between Washington and Beijing, the global shipping sector would be in for another round of disruptions, said Container xChange’s Roeloffs.
“Major disruptions could happen quickly … almost like if you open a bottle with sparkling water too quickly after shaking it,” he said.
Jimmy Ting, president at Great World Express & Customs Service, a freight forwarder and customs broker based in San Francisco, has been busy submitting entries for shipments rushed in before the tariffs took effect. But he expects traffic from China to fall off sharply in the coming weeks.
“I’m very concerned that we’ll see a Covid-19-like disruption again,” he said, while echoing Roeloff’s concern about a sudden influx of goods at US ports if trade normalizes.
Other countries could benefit from the shift away from China but are also at risk of congestion.
Port activity in countries from Vietnam to Mexico has picked up as Chinese exporters and US importers turn to alternative markets, after Trump offered a 90-day tariff reprieve for most other trading partners.
Shipping costs from Vietnam to the west coast of the US surpassed those from China on April 25, as shippers accelerated exports from Southeast Asia countries, according to data tracked by Xenta, an ocean and air freight information provider.
“We are now seeing the shifting global trade patterns caused by the tariffs play out in ocean freight rates,” said Peter Sand, chief analyst at Xenta.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.