A tidal tide goes to the American economy

When the cocovated pandemic struck, factories in China closed and world shipping traffic has slowed down. In a few weeks, the products began to disappear from the shelves of American stores and American companies that depend on foreign materials that were bankrupt.

A similar trend is starting to take place, but this time, the catalyst is President Trump’s decision to increase the prices on Chinese imports to a minimum of 145%, a amount so high that a large part of the trade between the United States and China stopped. Fewer ships with massive containers have exercised the ocean between the Chinese and American ports, and in the coming weeks, much fewer Chinese products will arrive on the American coast.

While high prices on Chinese products have been in place since early April, the availability of Chinese products and the price that consumers pay for them have not changed much. But some companies are now starting to increase their prices. And experts say that the effects will become more and more obvious in the coming weeks, because a tidal raz from orders canceled in Chinese factories goes to the world in the United States.

The number of massive containers carrying metallic boxes of toys, furniture and other products that leave China for the United States has dropped by about a third this month.

The reason why consumers have not yet felt a lot of effects is that it takes 20 to 40 days for a container carrier to travel through the Pacific Ocean. It then takes another to 10 days for Chinese products to spawn their train or truck path in various cities in the country, the economists of Apollo Global Management wrote in a recent report. This means that the higher prices on China that came into force in early April barely begin to lead to a drop in the number of ships arriving in American ports, a trend that should intensify.

At the end of May or early June, consumers could start to see empty shelves and layoffs could occur for retailers and logistics industries. The main effects on the US economy of closure of trade with China will begin to become apparent in the summer of 2025, when the United States could slip into a recession, Torsten Slok, an economist in Apollo, said.