Tariff damage looms without new trade deal, says economist

Exports totaled 120,000 units, also down 5% y/y, the sixth straight month of decline.

Seroka said it was “promising” that the U.S. and China continue to talk, referring to the recent negotiations in London. But “tariffs remain elevated,” maintaining an impactful 55% rate on Chinese imports to the United States. The retaliatory tariffs from China, averaging 10%, contribute to an uncertain trade environment.

Still, data from SONAR showed shippers taking advantage of the tariff pause. Through June 16 loaded container volume headed to the U.S. from Chinese ports was even with year-ago levels. 

At the same time, consumers reined in spending as the National Retail Federation reported overall retail sales fell y/y in May.

Ernie Tedeschi, director of economics at the Budget Lab at Yale University, in the briefing provided a detailed analysis of how the tariffs are affecting consumers and the economy at large. 

“Tariffs to date announced in 2025 raise the average effective tariff rate in the United States by an additional 12 percentage points,” Tedeschi said. This increase translates into a 1.5% hike in prices for American families, which effectively reduces purchasing power by approximately $2,500 per family per year in 2024 dollars.

Tedeschi said the regressive nature of tariffs “hurt lower and working-class families more,” with those at the income scale’s bottom experiencing a 2.5% pinch compared to the top’s 1%.

As the conversation turned to the inflationary impacts of tariffs, Tedeschi said it takes time for tariffs to flow through to the official data. He said tariffs on imported washing machines in 2018 took three months to influence consumer prices significantly. The current situation, complicated by factors like inventory levels and uncertain policy outcomes, suggests a gradual but persistent effect on inflation.

Despite these challenges, there was a semblance of positive news shared with respect to future port activities. Seroka noted, “Released just this week, the National Retail Federation’s port tracker predicts a decline in imports for June, July, and August.” Although this points to continued caution, the port’s operational readiness offers some optimism. “Our velocity statistics are good,” Seroka emphasized, indicating that the port’s infrastructure is well-prepared to manage fluctuating cargo volumes efficiently.

Find more articles by Stuart Chirls here.

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