by Michael , theeconomiccollapseblog.com
Over the last several decades, the global economy has become more interconnected than ever, but now everything is changing. The flow of goods between the number one economic power on the planet and the number two economic power on the planet is absolutely imploding, and that is going to have enormous implications on both sides of the Pacific. I have written quite a bit about the dramatic decline of U.S. imports, but the numbers show that U.S. exports are falling precipitously as well. According to CNBC, there has been a 51 percent decline in exports at the Port of Portland and a 28 percent decline in exports at the Port of Tacoma…
What began as a rapid drop in U.S. imports as shippers cut orders from manufacturing partners around the world has now extended into a nationwide export slump, with the U.S. agricultural sector and top farm products including soybeans, corn and beef taking the hardest hit.
The latest trade data shows that a slide in U.S. exports to the world, and China in particular, that began in January now extends to most U.S. ports, according to trade tracker Vizion, which analyzed U.S. export container bookings for the five-week period before President Donald Trump’s tariffs began and the five weeks after the tariffs took effect.
The farming sector has been warning of a “crisis” and ports data is showing more evidence of lack of ability to move product out to global markets. The Port of Portland, Oregon, tops the list with a 51% decrease in exports, while the Port of Tacoma, Washington, a large agricultural export port, has seen a 28% decrease. Tacoma’s top destinations for corn, soybeans and other ag exports include Japan, China and South Korea.
Overall, there are 10 major U.S. ports that have already experienced a double digit decline in export volume.
Agricultural exports are being hit harder than anything else. Needless to say, this is extremely bad news for U.S. farmers.
The Trump administration has already been discussing a vigorous aid package for farmers that are being affected by this downturn.
It appears that they certainly could use the help.
Meanwhile, imports from China are also declining dramatically…
Imports from China have fallen dramatically since Trump imposed steep tariffs – particularly since last month, when the tit-for-tat trade war sent the tariff on most Chinese goods up to 145%.
“This week, we’re down about 35% compared to the same time last year, and these cargo ships coming in are the first ones to be attached to the tariffs that were levied against China and other locations last month,” Gene Seroka, executive director of the Port of Los Angeles, told CNN Tuesday. “That’s why the cargo volume is so light.”
The drop-off in imports from China on the boats now coming into port is more than 50%, Seroka said. Many importers have canceled previous orders because US businesses aren’t interested in paying the steep tariff, which can more than double the price of Chinese goods.
There is no possible way that we are going to be able to replace the goods that are not being shipped to us from China.
Even if we started building enough factories tomorrow, it would take years before we could make up the difference.
As Flexport CEO Ryan Petersen has aptly pointed out, a 60 percent decline in containers coming to the U.S. “means 60% less stuff arriving”…
Rather than import goods to the United States, some retailers are choosing to pay to store their products in Chinese warehouses because it’s cheaper than paying the tariff, according to Ryan Petersen, CEO of Flexport, a logistics and freight forwarding broker. With importers and retailers unwilling to pay the steep cost, deliveries could continue to fall – as much as 60%, said Petersen. Consumers will start to notice very soon.
“A 60% decline in containers means 60% less stuff arriving,” Petersen told CNN’s Pamela Brown Tuesday. “It’s only a matter of time before they sell through existing inventory, and then you’ll see shortages. And that’s when you see price hikes.”
He is right.
It is just a matter of time before we experience empty shelves and very noticeable shortages.
Of course the trade war is deeply hurting the Chinese economy too…
China’s manufacturing engine is sputtering, with new data revealing the most severe hit to China’s economy since the COVID shutdown.
The country’s economy slipped from growth to contraction after the Purchasing Managers’ Index (PMI) fell below 50 in April. New export orders sank to their lowest level since December 2022 when China was still under lockdown, according to figures reviewed by the Wall Street Journal. Major financial institutions including UBS and Goldman Sachs have slashed their growth forecasts for China.
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