There are some eternal truths in this world, like how the sun will rise tomorrow, or how tariffs typically get passed down to the customer or that it takes time to cross the ocean. You can stick your head in the sand and scream fake news all you want, but it won’t change some unavoidable realities that will happen whether president deals says they will or not.
It typically takes about two to three weeks for a container ship to travel across the Pacific Ocean, meaning that when Trump announced his tariffs back on April 2nd, the ships that left China that day arrived on America’s shores within the last few weeks. Companies were blindsided by the staggering level of tariffs Trump imposed using horrendous math that even by its own illogic, Trump still screwed up, and they spent the following weeks in a mad scramble to prepare for a world where Trump’s massive tax hike presented an existential threat to their business. Ryan Petersen, CEO of the shipping company Flexport, told the Wall Street Journal that “if they don’t change the tariffs, it’s going to be an extinction-level, asteroid-wiping-out-the-dinosaurs kind of event” for small businesses.
Businesses small and large are affected by these, but Trump only pays attention to those who bribe him the most, which naturally will tilt the playing field towards the largest players. Either way, all companies who sell products manufactured outside the United States scrambled to purchase more supplies in the past couple of months to build up inventory to try to survive through however long Trump’s demented trade war lasts. This front-running was entirely responsible for last quarter’s negative GDP print that was warped by the largest negative net exports figure in recorded US history, and according to Gene Seroka, the Port of Los Angeles Executive Director, “about a third of the import volume” is “gone off the arrivals coming in next week.”
Is this bad? I’m no international shipping expert, but this sounds bad.
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— Matt Novak (@paleofuture.bsky.social) May 4, 2025 at 3:56 PM
This Bloomberg interview was conducted on Friday which means that “next week” is now this week. Seroka said that “we’ve got about 5-7 weeks of normal inventory in the country right now. Then we start to see spot shortages if it goes much beyond this.” Folks are probably getting out over their skis calling for empty shelves this month given last quarter’s staggering net exports figure showing businesses stocking up on inventory like never before, but empty shelves are practically guaranteed by the late fall if nothing changes.
To put that one-third decline in the port of Los Angeles’s container volume in some context, during the Great Depression, all US imports fell by 41 percent. If Trump’s trade war lasts longer than existing inventories have prepared for, all bets are off as to how bad this rolling economic crisis could get.
Already there are questions about what products may be available the rest of the year due to incontrovertible facts like “supply chains take a while for orders to process and ship” and “the ocean is big.” Companies that sell Christmas items typically place orders right around now, meaning that Trump may be the one to finally win the war on Christmas. This is such an obvious fact that even Republicans are going on TV and acknowledging it while claiming that it’s OK for kids to have their Christmases ruined while billionaires get another tax cut.
Rep. David Joyce on Trump saying girls should have fewer dolls: “The idea that the Christmas trade is already starting to slow down and there might be less around, I get it. I think the American people will understand that because the American people understand shared sacrifice.”
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— Aaron Rupar (@atrupar.com) May 5, 2025 at 10:40 AM
Trump this weekend said a recession is an acceptable outcome for him, and it clearly is beginning to take root amongst Republicans how much damage from Trump’s trade war is already baked into our slowing economy no matter what he does today or tomorrow (and as a reminder, Congress has the power to end this whenever they want because they actually control tariff policy, but Congressional Republicans have decided that deep-throating dear leader’s boot is preferable to exercising the power they spent their entire lives trying to gain).
As the early days of COVID and the big ship getting caught in the Suez Canal taught the world, supply chains are not something that you can just turn on and off at will, and Trump effectively has turned much of them off right now. He could cave today and take off all the tariffs he has imposed, and it wouldn’t change much about the damage he has already done to the second and third quarters of the year. The fourth quarter still may be salvageable, but that depends entirely on a president whose brains are seeping out his ears to accept unambiguous truths he has never been able to understand.
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