Tariff pause boosts China imports, but retail empty shelf risk remains

The recent pause on the steepest tariffs on Chinese goods has led importers to boost stalled orders from Asia, but not by enough to eliminate the risk of retail shortages in the months ahead, according to a new survey from CNBC and interviews with logistics executives and retailers.

The majority of respondents to a recent CNBC Supply Chain Survey (59%) said they are not seeing a restart in holiday orders from importers since the announcement of the trade war pause. Among those saying order activity has resumed, over half (53%) say those orders are full holiday orders.

The CNBC Supply Chain Survey was conducted between May 14 and 16, with approximately 100 responses to these questions fielded from a sample including freight and logistics services providers, retailers, and consumer goods companies.

Separately, retailers tell CNBC even with the reduction in the steepest tariffs on Chinese goods from 125% to 30%, the import taxes remain too high to complete full orders. The “stacking of existing tariffs” has many companies paying well over 30%.

“While the de-escalation deal moves us in the right direction, we need to move much farther and much faster to avoid more damage to the economy,” said Stephen Lamar, CEO of the American Apparel and Footwear Association. “Clarity, not more confusion and costs, needs to be the order of the day,” he said.

Fewer shipping containers are expected to enter major U.S. ports in the coming weeks even as some imports rebound from trade war lows, based on commentary from the Port of Los Angeles.

On Monday, Gene Seroka, executive director of the Port of Los Angeles, said some companies are cutting it really close with their seasonal product orders.

“Think summer fashion, back to school, Halloween,” said Seroka. “May is traditionally the month where a lot of purchase orders go in for the year-end and Christmas holidays. It typically takes about three months to send an order to a factory, have those goods made and get them ready to ship from Asia to the United States.”

Seroka said he does not see a container surge similar to the pandemic coming to the Port of Los Angeles since the port has less than 30% of the number of containers it had during the peak of Covid.

“What we’ll see is a little bit of an uptick in bookings in Asia cargo coming over,” Seroka said. “You won’t see a deluge of freight here at the Port of Los Angeles,” he added.

He said that means consumers should expect lower inventory across retail sectors and in the parts supply chains for American factories.

“That’ll leave us with fewer selections of products and likely higher prices,” Seroka said. “But for now, uncertainty remains in every business meeting that I have, and trying to find a way to make the best decisions for companies possible still remains elusive.”

The freight business is impacted by the ongoing trade pressures, with port labor and trucking and rail industries that depend on container volumes also taking a hit.

“Currently, we are experiencing a…