Gene Seroka, Executive Director of the Port of Los Angeles, has cautioned that the recently announced reduction in tariffs on Chinese goods will not be sufficient to reverse a sharp decline in cargo volumes. The port has experienced a substantial drop in imports due to businesses frontloading inventory earlier in the year to avoid higher tariffs. As a result, many companies have since halted or canceled new shipments, leading to a wave of shipping route cancellations in the coming weeks.
Tariff Reduction Offers Selective Relief, But Fails to Spur Broad Cargo Recovery Surge
A temporary reduction in the base tariff rate on Chinese imports—from 145% down to 30% for a 90-day period—was introduced to ease some trade tension. However, Seroka emphasized that the reduction would not cause a major spike in cargo movement. He noted that the high tariffs have already disrupted shipping schedules and inventories, and even at 30%, the levies remain high enough to discourage normal import patterns.
Port of LA Chief Warns Tariff Cuts Won’t Reverse Import Slump Despite Hopes for Modest ReboundWhile Seroka is skeptical about a full recovery in cargo volumes, he acknowledged that some sectors could benefit from the tariff reprieve. Companies dealing in essential items such as healthcare supplies and holiday-related goods like toys may take this opportunity to restock. Nonetheless, everyday consumer items like appliances and furniture are unlikely to flood the market, indicating a selective and limited recovery.
Retailers See Temporary Relief Amid Stable Shipping Rates and Modest Trade Rebound Forecast
The National Retail Federation has suggested that some retailers could experience brief relief as they prepare for the back-to-school and holiday shopping seasons. Seroka noted that some inventory stranded in China may now be shipped to the U.S. under the more favorable tariff rate. However, he maintained that a widespread return to previous cargo levels is unlikely, as the new tariff level still disincentivizes large-scale early ordering or “frontloading.”
Shipping costs have remained stable in the face of the ongoing trade uncertainty. The average spot rate for a 40-foot container from Asia to the U.S. West Coast stayed at around $2,321 as of early May. Judah Levine of Freightos predicted a moderate increase in shipping rates as volume rebounds slightly, possibly kicking off an early peak season. Seroka concurred, anticipating a slight uptick in rates as carriers redirect capacity toward the China-U.S. trade lane.
