Trump's tariffs threaten to the economy when the programs fall from China

Washington (AP) – American companies cancel orders from China, move the expansion plans and scurce to see which trade policy, Donald Trump, plans to jump on them next.

The massive and unpredictable taxes of the president on imports seem to mean empty shelves and higher prices for American buyers, perhaps within weeks.

And the higher costs and paralyzing uncertainties could demand an economic tribute: US consumers have been in the largest radio since Covid-19's goal five years ago, and economists say that recession risks are increasing.

An early sign of the damage arose on Wednesday when the trade department released the first glance at economic growth in the first quarter.

The US economy From January to March by 0.3% shrankThe first decline in three years. The gross domestic product of goods and services due to the land-ging in the past three months of 2024 of 2.4%. Imports shaved 5 percentage points from the growth of the first quarter. Consumer expenditure also slow down.

When asked how much deterioration in the world's largest economy could be attributed to Trump's irregular politics, said the economist of Boston College, Brian Bethune,: “Everything, '' '' '

As he promised on the campaign path, Trump has improved decades of American trade policy for decades. He has imposed a wide range of destinations on a wide range of destinations – then sometimes exposed to – large import taxes or tariffs. He has currently grabbed 10% for products from almost every country in the world. He has China America's third largest trading partner and second largest source for imported goods with an amazing 145% tariff.

China reacted with its own retaliatory tariffs – 125% for American products. The trade war between the two largest economies in the world has shaken the global financial markets and threatens to bring the US China trade to standstill.

Gene Seroka, managing director of the port of Los Angeles, warned last Thursday to the port “35%, since all programs from China essentially stopped for large retailers and manufacturers. '' Seroka added that load from Southeast Asia is also” with tariffs that are present today, softer than normal. “

After Trump announced expansive tariffs at the beginning of April, the bookings of Oceangontainers from China to the USA fell by 60% – and stayed there, said Ryan Petersen, founder and CEO of Flexport, a company in San Francisco that helps to send companies around the world. With down orders, the ocean carriers reduced their capacity by canceling 25% of their sails, said Flexport.

Many companies tried to exceed the clock by introducing foreign goods before Trump's tariffs came into force. In fact, this is a big reason why economic growth in the first quarter is so low: an increase in imports has increased the trade deficit that affects growth.

By storing goods before the trade war, many companies will “extend this storm for a while,” said Judah Levine, research director of the Global Frachtbücher platform Freightos.

In the next few weeks, Levine said: “You could start seeing bottlenecks … It will probably concentrate in categories in which the USA depends heavily on Chinese production and there are not many alternatives and certainly quick alternatives.” Among them: furniture, baby products and plastic goods, including toys.

Jay Foreman, CEO of Toymaker Basic Fun, said that he had the programs of Tonka trucks, Care Bears and other toys from China after Trump's tariff plan was announced in early April. Now he hopes to get along with the inventory for a few months.

“Consumers will find basic toys in the shops for a month or two, but we won't be in stock very quickly and the warehouse product will disappear from the shop shelves,” he said.

Kevin Brusky, who owns Ape Games, a small tabletop game publisher in St. Louis, has about 7,000 copies of three different games in a warehouse in China. The tariff calculation of around 25,000 US dollars would wipe out its profit for the games, so he starts a Kickstarter campaign next week to cover the costs of the tasks.

Nevertheless, he asks him to import the games if possible, as he assumes that retailers will soon be desperate after the sale of products. When he imports the games, Bruky is considering increasing the price of $ 40 to at least $ 45.

Fears that the tariffs will increase prices and lend the customers. Retailers have put expansion plans for the next year in the queue, said Naveen Jaggi, President of the retail consulting services in America for the real estate company JLL. “What they tell us is:” We want to slow down the decision to open business and to commit themselves to leases “because they want to observe how the consumer reacts.”

Consumers already seem to freak out. The Board conference, a business group, reported on Tuesday that the trust of the Americans fell into the economy For the fifth month in a row up to the lowest level since the beginning of Covid 19 pandemic. Almost a third of consumers expect the setting to slow down in the coming months.

Consumer expenses make up about 70% of the US BIP. So if nervous consumers shop, the economic failure could become ugly. Economist Joseph Brusuelas from the advice RSM is the likelihood of a recession within the next 12 months at 55%.

Torsten Slok, chief economist at Apollo Global Management is even darker. He sees a 90% chance of recession this summer when Trump's tariffs remain. Companies are already planning significant disorders, especially from the 145% tasks to be from China, he said.

“You see that in corporate reactions: orders have dropped, (expenses) plans decrease, the costs have risen, the prices paid have increased,” he said.

He expects large layoffs of freight forwarders and retailers who already work through the supply chain at the end of May, since the slowdown of the goods that come from China in US ports.

Petersen, CEO from Flexport, said that lack of product are “not a tragedy”.

“There will be much more about the following layoffs,” said Petersen. “The real pain will be felt here. Bottlenecks mean that companies do not sell things and therefore do not have the profits they need to pay their workers. ''

He said the missions were so high that he expects the United States and China to de -escalate their trade war and reduce the tariffs. In fact, Trump and his consultants have recently sounded more conciliatory. The finance minister Scott Bessent said, for example, that the three -digit tariff of the USA and China beat each other are not sustainable.

But abrupt changes in the trade policy, which increase uncertainty, paralyzed companies and obtained concerned consumers.

In addition, the economist Cory Stahel from The Tat Miet Lab “can deteriorate if people behave as in a recession, if the changes in the latest trade policy mitigate, possibly dismantle some business concerns, but it may already be too late.”

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D'uniczuzio reported from New York