US-China Tariff Truce May Not Revive Imports, Says Port Of LA Chief: 'You're Not Going To Be Frontloading At 30%'

The Port of Los Angeles, one of the largest import gateways in the U.S., has issued a warning that the recent reduction in tariffs on Chinese goods may not be enough to reverse the declining cargo volume.

What Happened: Cargo volumes at the Port of Los Angeles have been on a downward trend. To avoid new tariffs, companies previously stockpiled inventory but have since halted or canceled new orders, prompting shipping firms to cancel numerous upcoming sailings, as per report from the Wall Street Journal.

The port’s executive director, Gene Seroka, predicts a 25% year-over-year drop in imports for May. He remains doubtful that the recent tariff reduction from 145% to 30% on Chinese imports will lead to a significant increase in cargo volume. “Even at a 30% tariff with a 90-day reprieve, it’s not going to dramatically change what we’re seeing right now,” Seroka told the Wall Street Journal.

Although some retailers may see short-term benefits from reduced tariffs while preparing for peak seasons such as holiday and back-to-school, Seroka does not expect cargo volumes to return to previous levels in recent weeks and months. “Reason being, you're not going to be frontloading at 30%.", he said.

Why It Matters: This warning comes on the heels of a prediction by RSM chief economist Joseph Brusuelas of a potential tariff-induced recession originating from the Los Angeles docks. He described the tariff decision as a "misapplied consumption tax" that could halt economic expansion prematurely.

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Furthermore, a recent report highlighted that for the first time since the COVID pandemic, no cargo ships were en route from China to the two primary ports in California. This sudden halt in trade followed the Trump administration’s imposition of substantial tariffs on Chinese imports.

Meanwhile, shipping rates have remained stable, with spot rates from Asia to the U.S. West Coast at $2,321 as of May 7, as per Freightos Baltic Index. Freightos’ Judah Levine expects rates to rise moderately, not sharply, as a volume rebound may trigger an early peak season.

• READ MORE: Gordon Johnson Warns Of Potential ‘Liberation Day 2.0’ As 30-Year Treasury Yields Approach 5% Amid Dollar Weakness

Image via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.