American Cargo Shipments Collapse as U.S.-China Trade Battle Deepens

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The number of cargo shipments sailing from China to the United States has collapsed at a stunning pace, as President Trump’s latest round of tariffs slams global supply lines. Dozens of sailings have been canceled, cutting off major flows of goods ranging from electronics to clothing and furniture.

At the Port of Los Angeles, Executive Director Gene Seroka forecasted a 35% drop in import volumes within two weeks, citing that “essentially all shipments out of China for major retailers and manufacturers have ceased.” Nationwide, bookings from China plummeted by 60% last week, according to Flexport’s Nathan Strang. As of now, freight demand from China to West Coast ports is projected to fall by 28% next week and East Coast demand by 42% the following week.

Retailers and manufacturers have scrambled to switch supply lines to Southeast Asia. Vietnam, Malaysia, and Cambodia are emerging as alternatives, but shifting production is neither fast nor seamless. Many companies are pausing orders altogether, hoping to weather the turbulence until trade conditions stabilize.

Industry Stress Grows as Tariff Impasse Drags On

The collapse of cargo shipments is sending shockwaves across industries deeply tied to Chinese imports. Retail, technology, home goods, and apparel companies are all facing delayed inventory, higher prices, and logistical chaos. For example, Christmas retailer Balsam Hill reports having only 20% of this year’s inventory shipped, as factories in China either halt production or cancel orders outright.

The ports of Los Angeles and Long Beach handled nearly 2.5 million import containers in the first three months of 2025, up 14% from a year earlier. Much of that volume came from companies rushing to beat tariff deadlines. Now, with tariffs as high as 145% on Chinese goods, the pipeline is choking.

Shipping executives warn that if Trump and Chinese leaders reach a temporary deal, a sudden surge in demand could trigger chaos. Ports could experience bottlenecks similar to those seen during the pandemic, with skyrocketing freight rates and overwhelmed infrastructure.

“All the ships are going to be choc-a-block full, and freight rates will skyrocket,” said Lars Jensen, CEO of Vespucci Maritime. Freight data from Sea-Intelligence already suggests cargo demand patterns are whipsawing violently, which could hurt smaller importers who lack the buying power to secure space during rebounds.

How Long Will the Gridlock Last?

Despite cautious signals from Washington about a willingness to negotiate, most industry experts see no quick fix. Analysts predict that businesses may need to endure supply disruptions for at least six to nine more months. Even a partial rollback of tariffs would not immediately restore the intricate trade flows that were built over decades.

Switching manufacturing hubs, securing alternative shipping contracts, and recalibrating inventory models all take time. Furthermore, the global freight industry has already cut vessel capacity to manage falling volumes. This means that even if U.S.-China talks yield results, recovery could be slower and more painful than many expect.

Supply chain consultant Alan Murphy of Sea-Intelligence stressed that the coming months will test the resilience of both corporations and logistics networks. A sudden tariff pause could cause a shipping bottleneck worse than 2020’s pandemic surge, stretching all the way into next year’s peak seasons.

Pragmatic Advice for Investors

Investors watching the collapse of cargo shipments should prepare for a drawn-out adjustment rather than a quick snapback. Unlike the short-term reshuffling seen in previous trade spats, this disruption is cutting into the foundation of global manufacturing and distribution.

A smart strategy would be to focus on companies that demonstrate flexibility—those already diversifying supply chains and managing inventory risk aggressively. Logistics firms positioned to handle sudden surges, and technology companies aiding supply chain visibility, could become critical winners over time.

In contrast, sectors heavily dependent on seasonal imports, like apparel, furniture, and consumer electronics, face prolonged uncertainty. Investors should be cautious about overexposure to companies without clear contingency plans.

Above all, patience will be critical. Tariff cycles are volatile, and quick reversals can happen. However, rebuilding resilient supply chains is a multi-year task, not a multi-week fix. Those who recognize this now will have an edge as markets churn through the ongoing turbulence.

Investors of The Capitalist, which strategy best positions investors to navigate the shipping collapse triggered by U.S.-China tensions? Tell us what you think! 

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