Trump’s tariffs loom over the economy as shipments from China fall

By PAUL WISEMAN ANNE D INNOCENZIO and CHRISTOPHER RUGABER Associated Press Business Writers WASHINGTON AP American businesses are cancelling orders from China postponing expansion plans and hunkering down to see what exchange program surprises President Donald Trump plans to spring on them next The president s massive and unpredictable taxes on imports seem likely to mean emptier shelves and higher prices for American shoppers perhaps within weeks And the higher costs and paralyzing uncertainty could exact an economic toll U S consumers are in the biggest funk since COVID- hit five years ago and economists say recession risks are climbing Related Articles World shares are mixed as strong corporate earnings are offset by tariff worries GM recalls nearly Cadillac Chevrolet and GMC cars due to engine failure risks First accuser takes the witness stand at Harvey Weinstein s MeToo retrial Take It Down Act addressing nonconsensual deepfakes and revenge porn passes What is it Black female WWII unit Six Triple Eight receives congressional honor An early sign of the damage is expected to emerge on Wednesday when the Commerce Department releases its first look at first-quarter economic upsurge The financial market is forecast to have expanded at an annual pace of just from January through March according to a survey of economists by the evidence firm FactSet That would be the slowest quarter of development in nearly three years and would be down from a healthy in the last three months of Various economists suspect things were even worse Requested how much of deterioration in the world s biggest market could be traced to Trump s erratic policies Boston College economist Brian Bethune mentioned All of it As he promised on the campaign trail Trump has upended decades of American transaction framework He s been imposing then sometimes suspending big import taxes or tariffs on a wide range of targets He s presently plastered a levy on products from almost every country in the world He s hit China America s third-biggest trading partner and second-biggest source of imported goods with a staggering tariff China has responded with retaliatory tariffs of its own on American products The take-no-prisoners contract war between the world s two biggest economies has shaken global financial markets and threatened to bring U S -China pact to a standstill Gene Seroka executive director of the Port of Los Angeles warned last Thursday within two weeks arrivals to the port will drop by as essentially all shipments out of China for major retailers and manufacturers has ceased Seroka added that cargo from Southeast Asia also is much softer than normal with tariffs now in place After Trump publicized expansive tariffs in early April ocean container bookings from China to the United States dropped and stayed there revealed Ryan Petersen founder and CEO of Flexport a San Francisco company that helps companies ship cargo around the world With orders down ocean carriers have reduced their maximum by cancelling of their sailings Flexport mentioned Various companies tried to beat the clock by bringing in foreign goods before Trump s tariffs took effect In fact that is a big reason that first-quarter economic increase is expected to come in so low A surge in imports swelled the exchange deficit which weighs on development By stockpiling goods ahead of the bargain war numerous companies will be positioned to ride out this storm for a while noted Judah Levine research director at the global freight-booking platform Freightos But at a certain point inventories will run down In the next limited weeks Levine announced you could start seeing shortages it s likely to be concentrated in categories where the U S is heavily dependent on Chinese manufacturing and there aren t a lot of alternatives and certainly quick alternatives Among them furniture baby products and plastic goods including toys Jay Foreman CEO of toymaker Basic Fun disclosed he paused shipments of Tonka trucks Care Bears and other toys from China after Trump s tariff plan was communicated in early April Now he s hoping to get by for a minimal months on inventory he s stockpiled Consumers will find Basic Fun toys in stores for a month or two but very expeditiously we will be out of stock and stock product will disappear from store shelves he declared Kevin Brusky who owns APE Games a small tabletop encounter publisher in St Louis has about copies of three different games sitting in a warehouse in China The tariff bill of about would wipe out his profit on the games so he is launching a Kickstarter campaign next week to help defray the cost of the duties Still his sales representative is urging him to import the games if doable because he expects that retailers will soon be desperate for products to sell If he does import the games Brusky is considering raising its price from to at least Worried that tariffs will push up prices and drive away customer retailers have put expansion plans on hold for next year reported Naveen Jaggi president of retail advisory services in the Americas for real-estate firm JLL What they are telling us is We want to slow down the decision to open up stores and commit to leases because they want to watch how the consumer reacts Consumers already seem to be freaking out The Conference Board a business group released Tuesday that Americans confidence in the financial system fell for the fifth straight month to the lowest level since the onset of the COVID- pandemic Nearly one-third of consumers expect hiring to slow in the coming months nearly matching the level reached in April when the financial sector was mired in the Great Recession Consumer spending accounts for about of U S GDP so if nervous consumers stop shopping the economic fallout could get ugly Economist Joseph Brusuelas of the consultancy RSM pegs the probability of a recession within the next months at Even gloomier is Torsten Slok chief economist at Apollo Global Management He sees a chance of a recession by this summer if Trump s tariffs remain in place Businesses are already planning on important disruptions particularly from the duties on goods from China he mentioned You see that in company reactions Orders are down spending plans are down costs are up prices paid are up he revealed He expects large layoffs by trucking firms and retailers as soon as late May as the slowdown in goods coming into U S ports from China works its way through the supply chain Flexport CEO Petersen explained shortages of products are not a tragedy It s going to be much more about the layoffs that follow Petersen noted That s where the real pain is going to be felt Shortages mean companies aren t selling stuff and therefore don t have the profits that they need to pay their workers He explained the stakes are so high that he expects the U S and China to deescalate their contract war and bring down the tariffs In fact Trump and his advisers have sounded more conciliatory lately Treasury Secretary Scott Bessent for example disclosed that the triple-digit tariffs the U S and China have slapped on each other are not sustainable But more abrupt shifts in transaction agenda jeopardy increasing the uncertainty that has paralyzed businesses and worried consumers Moreover mentioned economist Cory Stahle of the Indeed Hiring Lab conditions may worsen in the coming months if people start behaving like they are in a recession Softening several of the latest business strategy changes may ease specific business concerns but it may already be too late D Innocenzio revealed from New York