All Quiet on the Waterfront ⚓️

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The port of Los Angeles is typically a vibrant hub of activity and one of America's busiest maritime gateways. It handles about 40% of the United States’ containerized imports. According to statistics from the Port of Los Angeles, it processes nearly 3,50,000 TEUs each month, with around 45% of those shipments coming from China. 

But now all is quiet on the waterfront. 

The usual hum of cargo ships has diminished, the cranes are not as fast as they used to be, the vessel calls have dwindled, and a cloud of uncertainty has engulfed the port like the rest of the nation. 

The Executive Director of the Port of Los Angeles, Gene Seroka, has stated that he expects a 35% drop in import volumes within weeks. 

It’s a similar story at the neighboring Port of Long Beach. “We are at a point of inflection. It’s kind of dire,” said Mario Cordero, CEO of the Port of Long Beach, to NBC. “What happens here will signal broader trends across the supply chain. We're seeing fewer vessel calls and reduced cargo volumes.”

Official reports state that overall traffic across the two Southern California ports is down by nearly half.

The signs are clearer than ever: the US-China tariff war has reached the American shores, literally. 

In this issue of CrossDock, we examine the repercussions and effects of the ongoing US-China trade war on supply chains and logistics. We also discuss its impact on both countries and what the future holds.

But to understand how we got here, we need to go back to April 2, 2025.

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Space race

On April 2, President Donald Trump made an important announcement at the White House podium, flanked by American flags and with a board in his hand. He called it Liberation Day. The day America would stop being, in his words, “taken advantage of.” 

The board he carried listed 57 nations, each tagged with a new U.S. tariff rate. At the top stood China, with a 34% tariff (the total tariff for China was 54%). The announcement sent immediate shockwaves through global markets.

Interestingly, in the following days, Trump offered most countries a 90-day window to negotiate their way out. But China did not receive such an offer. 

The administration argued that China had been taking advantage of the U.S. for years, citing its massive trade surplus, rampant intellectual property theft, and the steady flow of illegal fentanyl into American cities.

China didn’t wait to retaliate. It raised its tariffs on American goods to 125% and imposed export controls on critical rare earth minerals essential to U.S. electronics, electric vehicles, and military technology. 

This set off a rapid tit-for-tat escalation. Washington responded by raising tariffs to 84% and then again to 145%. Beijing hit back, increasing the tariff rates to 125%.

Now, the standoff has turned into a full-blown trade war. With U.S. tariffs on Chinese goods at 145% and China’s tariffs at 125%, the two countries are locked in the most extreme bilateral trade conflict since the protectionist era of the 1930s.

The most significant impact of the trade war is the growing pressure it’s placing on the supply chains that connect the two superpowers.

The short supply

For decades, China’s manufacturing prowess has powered the backend of American commerce, churning out the smartphones, auto parts, toys, machines, and generic drugs that keep U.S. industries moving. From big-box retailers to tech giants, entire sectors have built their margins on the reliability and scale of Chinese manufacturing.

According to the U.S. Trade Representative data, the goods trade between the U.S. and China totaled $582.4 billion in 2024. In that year, the U.S. imported goods worth $438.9 billion from China, most of which were packed into steel containers and shipped across the Pacific.

Now, those very containers are on the front lines of the trade war. 

Today, for businesses importing goods from China, which was once the cheapest and most efficient option, has suddenly become too costly to justify.

Many businesses simply can’t afford the cost. This has forced companies to cancel orders, reroute shipments, or entirely discontinue product lines. 

Interestingly, it’s the booking data that acts as the bellwether for the shortage storm that’s brewing and about to hit the U.S. supply chain.

According to Vizion’s ocean booking tracker between March 24 and April 14, the U.S.–China trade lane saw a dramatic contraction in container booking activity, highlighting the immediate impact of the new tariffs announced on April 4 and 5. 

Bookings for shipments from China to the U.S. plunged by nearly 40%, falling from 134,911 to 81,239 twenty-foot equivalent units (TEUs). Simultaneously, overall U.S. import bookings dropped by 22.7%, from 353,896 to 273,391 TEUs.

Hapag-Lloyd AG, the world’s fifth-largest container carrier, reported last week that about 30% of bookings from China to the U.S. have been canceled. 

The steep tariffs have not spared anyone, not even the largest e-commerce company in the world — Amazon.  

According to a Bloomberg report, the e-commerce giant abruptly canceled multiple supplier orders in the days following the tariff hike. While the cancellations didn’t directly reference tariffs, the timing strongly suggests a connection. 

It’s worth noting that much of Amazon’s own product ecosystem is deeply tied to China. The company relies heavily on Chinese manufacturers for its private-label goods, and in its 2024 annual report, Amazon acknowledged: “A significant share of our third-party sellers are based in China, and many of our components and finished products are sourced from Chinese suppliers.”

In fact, Amazon isn’t the only one. Major retailers like Home Depot, Target, Walmart, and IKEA also rely heavily on imports from China, and have reportedly cancelled their orders from China.

What do these canceled orders translate into?

When orders get canceled, it means fewer container ships packed with products are headed to the U.S. — and that drop-off has already started.

Empty waterfronts

The fallout from the tariff war is now plainly visible at America’s busiest ports. As of the first week of May, the Ports of Los Angeles and Long Beach — collectively responsible for handling over 20 million containers annually — have seen a 44% drop in docked vessels compared to last year. The Port of Long Beach alone reported 34 canceled sailings, while Los Angeles saw 36 cancellations in a single week.

In a board meeting, Port of Los Angeles Executive Director Gene Seroka said, “We’re starting to see cargo flow into the port slow down.” He added, “Within two weeks, I expect arrivals to fall by 35% — shipments out of China for most major retailers and manufacturers have essentially come to a halt.”

So what’s the broader impact of these tariffs on the supply chain and logistics ecosystem?

The slowdown isn’t just showing up in shipping lanes; it’s rippling across the entire supply chain. 

In March, net orders for heavy-duty trucks dropped to just 16,500 units, a 6% decline year-over-year, according to ACT Research. Worse, the industry saw the highest order cancellation rate in nearly two years, as trucking companies brace for declining freight volumes and economic uncertainty.

This contraction is translating into real job losses across the supply chain, from dock workers at ports to truck drivers, warehouse workers, and countless others involved in the movement and storage of goods.

And what does this slowdown mean for average Americans? 

Less and more

With imports from China slowing down, fewer shipments are arriving at U.S. ports, and retailers are scrambling to manage their inventories. For American consumers, that means emptier shelves and steeper prices in the coming months. 

The first to disappear will be the most price-sensitive, fast-moving products. Toys and budget home goods — typically low-margin and high-turnover — are heavily reliant on Chinese imports and will likely vanish early. 

Fast fashion staples like tees, leggings, and socks won’t be far behind; in 2024, China accounted for 37% of all U.S. apparel imports and 58% of footwear, according to the American Apparel & Footwear Association.

Even consumer electronics such as earbuds and phone accessories could see a fall in numbers, as many components still originate from China despite final assembly happening elsewhere.

Imports into the United States are projected to decline by at least 20% year-over-year in the second half of 2025, according to the National Retail Federation. The drop from China is expected to be even steeper, with JP Morgan forecasting a staggering 75% to 80% plunge in Chinese imports.

Interestingly, to get ahead of the tariff shock, many retailers, automakers, and businesses rushed to frontload shipments in February and March. 

This sudden spike in imports contributed to a record trade deficit in March 2025. The goods trade deficit widened by 9.6% in March and reached an all-time high of $162 billion. But even this wave of early shipments may not be enough. With blank sailings on the rise and new orders drying up, the initial cushion is thinning fast.

In fact, top retail CEOs sounded the alarm directly to the White House. According to reports, three of the nation’s biggest retail leaders — Walmart’s Doug McMillon, Target’s Brian Cornell, and Home Depot’s Ted Decker — met with President Trump to warn against the fallout of the proposed tariffs. They argued that the sweeping duties would raise prices for consumers, disrupt supply chains, and trigger widespread product shortages if left unchecked.

Small businesses across the United States are also increasingly vocal in their appeals for relief from the financial strain imposed by recent tariffs. 

The U.S. Chamber of Commerce has urged the Trump administration to grant automatic tariff exclusions for small-business importers, emphasizing that many lack the financial capacity to absorb the increased costs or quickly adjust their supply chains. The Chamber warned that without immediate action, these businesses could suffer irreparable harm, potentially leading to job losses and closures. 

When it rains, it pours. And it’s not just imports feeling the heat. U.S. exports are now facing similar troubles, with shipments slowing down across major ports and key sectors.

Diminished Exports

While most headlines spotlight collapsing imports, the U.S. faces a quieter but equally devastating blow on the export front. What began as a slowdown in shipments to China has rapidly escalated into a nationwide slump affecting nearly all outbound trade. 

Data from Vizion, which analyzed U.S. export container bookings five weeks before and after Trump’s April tariff hikes, reveals sharp declines across key ports. 

So, how are things on the other side of the Pacific? Let’s break it down for you. 

Chinese Slump

The well-oiled Chinese manufacturing engine is now showing signs of damage. In April 2025, export orders from Chinese factories dropped to their lowest level since December 2022, according to data from the National Bureau of Statistics. The new export orders index sank to 44.7, well below the 50-point line that separates growth from contraction. 

It’s the steepest fall since the COVID lockdown era. This isn’t just a seasonal slowdown. Analysts say it’s the direct fallout from the U.S. tariff hikes. Rising costs, disrupted container shipping, and mass order cancellations have hit Chinese exporters hard. Many factories are now scaling back production, cutting shifts, and scrambling for new buyers.

But replacing the U.S. won’t be easy. America remains China’s largest single-country customer, importing nearly $500 billion worth of goods in 2024 — about 15% of China’s total exports, according to Chinese customs data. Now, with demand drying up, Chinese manufacturers are racing to find new markets across Asia, Europe, and Latin America.

However, Chinese e-commerce giants believe the answer lies not overseas, but at home.

Chinese e-commerce giants are stepping in to cushion the blow for struggling exporters. JD.com has pledged to purchase ¥200 billion ($27.4 billion) worth of goods from export-driven businesses, helping them pivot to the domestic market with dedicated platform visibility and marketing support. 

Alibaba’s Freshippo is fast-tracking onboarding for exporters, offering streamlined registration and access to its nationwide warehouse network to speed up distribution. Pinduoduo has committed ¥100 billion to support small and mid-sized manufacturers, while Meituan is waiving fees and boosting local marketing efforts. These moves are part of a broader push to redirect outbound supply toward Chinese consumers.

What’s next

After months of escalating tariffs and retaliatory blows, the U.S. and China are finally returning to the negotiation table. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to meet with Chinese Vice Premier He Lifeng in Switzerland in May 2025, marking the first high-level trade dialogue since the tariff war reignited in early 2025. 

China’s Ministry of Commerce confirmed the talks, citing signals from Washington that it may be open to adjusting tariffs.

While both sides have downplayed expectations, calling these preliminary talks, their timing couldn’t be more critical. With back-to-school and holiday shopping seasons around the corner, American retailers and importers are rapidly running out of time to secure inventory. 

And for Beijing internally, pressure is mounting on Xi Jinping’s leadership. The economy is slowing, business confidence is shaken, and Beijing faces calls to re-engage diplomatically. In a notable shift, China has offered limited tariff exemptions on U.S. goods and is exploring cooperation on issues like fentanyl to reopen backchannel talks.

The meetings may not produce a sweeping deal, but they offer a chance to pause the spiral and give businesses on both sides of the Pacific a shot at stability.

This newsletter was written by Shyam Gowtham

Thank you for reading. We’ll see you at the next edition!