Container Volume Declines Amid U.S.-China Trade Tensions

Categories: California Business NewsCalifornia News

The Port of Los Angeles faces significant container volume declines due to the ongoing trade tensions with China.

News Summary

Recent reports indicate that eastbound international container volume from Southern California has dropped significantly, reflecting the ongoing effects of tariffs from the U.S.-China trade war. As of May 18, the volume declined by 5% week-over-week and 10% compared to a four-week average. The Port of Los Angeles anticipates a 35% drop in cargo arrivals due to halted shipments from China and concerns over limited inventory among retailers. Trade experts predict further reductions in container volume, signaling challenges for the logistics industry crucial to the local economy.

California – Eastbound international container volume from Southern California has seen a significant decline, reaching its lowest level in six months. During the week ending May 18, the volume dropped by 5% from the previous week and 10% compared to the four-week rolling average, reflecting the ongoing impact of the U.S.-China trade war.

This downturn in container volume is largely attributed to the steep tariffs imposed on Chinese imports, which have at times reached as high as 145% on certain goods. International container volume, specifically on eastbound trains monitored by RailState, has plummeted by 26.3% compared to its peak during the week of March 3-9, 2025. This peak was indicative of a situation where importers rushed to frontload goods in anticipation of impending tariff increases.

Despite a recent truce between the U.S. and China, which resulted in the reduction of tariffs on most Chinese goods to 30% for a temporary period of 90 days, experts forecast that a surge in imports could occur as companies strive to rebuild their inventories during this pause. However, the immediate effects of previous tariffs are apparent, as the Port of Los Angeles expects a staggering 35% decline in cargo arrivals. The region is seeing a halt in shipments from China, coupled with diminished cargo volumes from Southeast Asia.

In terms of specific forecasts, projections indicate a 28.6% drop in cargo volume to 85,486 Twenty-foot Equivalent Units (TEUs) in the upcoming weeks, with a nearly 33% anticipated reduction to 74,925 TEUs in subsequent arrivals. This decline underscores the continuing challenges facing the trade and logistics industries, which contribute nearly $300 billion annually to the local economy.

The port has been grappling with persistent decreases in TEUs, having reported a 15% year-over-year decline in March. This figure marks the fourth straight month of volume losses. Major retailers in Southern California have also expressed concerns about limited inventory, with many indicating a supply that could last only six to eight weeks, potentially leading to product shortages if the trade issues are not resolved.

The initial implementation of tariffs dates back to January 2025, which initially led to a spike in TEU volume as suppliers hurried to ship products before the tariffs took effect. After the peak noted in early March, there was a notable drop of 15,000 TEUs, signaling the end of the rush to “beat the tariff.” Current TEU volumes have now decreased to about two-thirds of those earlier highs.

Gene Seroka, the executive director of the Port, reflected on the potential ramifications of ongoing tariff policies. Without changes, consumers and manufacturers alike are likely to face difficult choices in the months ahead. The trade industry is also a major employer in Southern California, supporting nearly 2 million jobs, which heightens the need for a resolution in trade agreements.

As the situation unfolds, analysts warn that U.S. consumers may face price increases and reduced product availability due to ongoing supply chain disruptions, in part driven by the unresolved nature of U.S.-China trade relations. The future implications of tariffs and their impact on the economy, business operations, and consumer habits are areas of continued scrutiny.