Andrea G. from Boston, MA asks: Hi Mitch, I was thinking there would be a bunch of announced deals on the tariffs by now, but we’re still waiting. My question is, with the time that has passed already and with a potentially long timeline for deals to get done, when are we likely to see the real effects of these tariffs? Higher prices? Empty store shelves? A recession? All of the above? Thank you.
Mitch’s Response:
Thanks for your email. There’s already early data showing the impact of tariffs, namely with regard to imports from China.
Before I dive into some of the details and implications, it’s important to note $438.9 billion of goods were imported from China in 2024, which makes it clear that tariffs of the current magnitude could cause significant economic disruption if they stay in place for the next few weeks or months.
Early data shows that the flow of goods from China to the United States is experiencing a sharp decline, as cargo sailings are increasingly being canceled. At the Port of Los Angeles—one of the primary gateways for Chinese imports into the U.S.—executive director Gene Seroka warned of an impending 35% decline in import volume over the first two weeks in May. He attributed this steep drop to a near-complete halt in shipments from China by major U.S. retailers and manufacturers.1
Think the Market’s Telling You to Act? Start Here.
With tariffs back in the headlines and market uncertainty rising, it’s easy to second-guess your next move. That’s why we’re offering our free guide, “The Perils of Market Timing.”1
Inside, you’ll find research-backed insights on common behavioral mistakes investors make, and strategies that may help keep your long-term plan on track. You’ll learn:
If you have $500,000 or more to invest and want to learn how you may be able to avoid these mistakes today, click on the link below to get your free copy:
Download Zacks Guide, “The Perils of Market Timing”2
There is some evidence that retailers “pulled forward” purchases in anticipation of tariffs, which in my view means it may be a few weeks or months before U.S. consumers notice empty shelves. The case-in-point is that ports like Los Angeles and Long Beach processed nearly 2.5 million import containers in the first quarter of the year, marking a 14% increase over the same period last year.
There is also evidence that American companies are adapting in other ways. There has been a sharp spike in imports from Southeast Asian countries, as companies urgently reroute their supply chains to countries like Vietnam, Malaysia, and Cambodia. At present, imports from non-China countries are facing a much lighter tariff burden of just 10%, and companies with operations in multiple Asian nations are pivoting production away from China rapidly.
The bottom line, however, is that current tariff rates between China and the U.S. are not sustainable. And the longer this trade dispute drags on, the higher the likelihood that consumers will start to notice the impact in stores and economic growth and earnings will suffer as a result. If I had to put a timeline on it, I’d say that if there’s no movement on tariffs by the end of May, consumers will start to notice empty shelves this summer and economic growth will slow considerably in the summer months as well.
With this all being said, we know that the news cycle on trade moves quickly, and the U.S. and China could de-escalate at a moment’s notice. That would imply a sudden and overwhelming surge in demand for shipping space from China, with container ships quickly becoming overbooked and shipping rates pushing substantially higher. This, too, would be temporary however.
Uncertainty around trade and markets can tempt even experienced investors to take short-term actions that feel “safe” in the moment—but often come at a long-term cost.
That’s why we created our guide, The Perils of Market Timing3. It breaks down what happens when investors try to outguess the market—and why discipline often outperforms reaction. Inside, you’ll learn:
If you have $500,000 or more to invest and want to avoid the most common timing mistakes, download your free copy today!
Disclosure