The Blubber

President Donald Trump’s sweeping tariffs have been rattling both Washington and Wall Street for weeks—but the next shockwave could strike closer to home.

Since the U.S. hiked tariffs on Chinese imports to 145% in early April, cargo traffic from China has plunged—possibly by as much as 60%, according to some estimates. So far, many Americans haven’t felt the impact, but that’s likely to change soon.

By mid-May, companies across the country—from mom-and-pop shops to major retailers—will need to restock their shelves. Retail giants like Walmart and Target reportedly warned Trump during a recent meeting that consumers could soon be facing empty aisles and higher prices.

Torsten Slok, chief economist at Apollo Management, cautioned that the country may be headed for “Covid-like” product shortages and widespread layoffs in retail, logistics, and transportation.

Although Trump has hinted he may ease some tariffs, it may already be too late to head off a broader economic ripple effect that could stretch into the holiday season.

“The clock is absolutely ticking,” said Jim Gerson, president of The Gerson Companies, a Kansas-based firm that supplies holiday goods to U.S. retailers. The company, which sources over half of its products from China, currently has 250 containers stalled, waiting to be shipped. “We have to get this worked out—and soon,” said Gerson, whose family-run company brings in about $100 million in annual sales.

Even if tensions ease, restarting trade across the Pacific won’t be simple. Shipping firms have already cut back capacity in response to weaker demand. A sudden spike in orders could overwhelm supply chains, triggering delays and pushing up costs—much like the shipping chaos seen during the pandemic when container prices soared and ports were gridlocked.

“Ports are built for consistent flow, not the stop-and-go surges we’ll likely see,” said Lars Jensen, CEO of Vespucci Maritime, a shipping consultancy.

The tariffs come at a crucial time for retailers. March and April mark the beginning of the inventory ramp-up for back-to-school and holiday seasons. By late spring, the first wave of Christmas products should already be on their way to U.S. shores.

“We’re paralyzed,” said Jay Foreman, CEO of Florida-based toymaker Basic Fun, which supplies major retailers like Amazon and Walmart. Foreman described the tariffs as a “de facto embargo” and said while some customers have hit pause on orders, full cancellations could follow if the trade barriers remain in place.

“There’s a short window where this is still manageable,” said Foreman, whose company sources about 90% of its products from China and brings in around $200 million a year. “But every week this continues, the damage is going to get worse.”