Evelyn Reynolds

“It’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs,” said Gene Seroka, executive director of the Port of Los Angeles.
Shipments from China make up about 45% of the business for the port, though some transport companies will be looking to pick up goods at other points in Southeast Asia to try to fill up their ships, Seroka said.
Data on shipments out of China had already started to signal slowing trade volume to the U.S., alarming some economists.

A container ship is shown at the Port of Los Angeles in Los Angeles, California, U.S. November 22, 2021.
Mike Blake | Reuters

Shipments from China to the West Coast of the U.S. will plummet next week as the impact of President Donald Trump’s tariffs leads companies to cut their import orders.
Gene Seroka, executive director of the Port of Los Angeles, said Tuesday on CNBC’s “Squawk Box” that he expects incoming cargo volume to slide by more than a third next week compared with the same period in 2024.

“According to our own port optimizer, which measures the loadings in Asia, we’ll be down just a little bit over 35% next week compared to last year. And it’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs,” Seroka said.

Shipments from China make up about 45% of the business for the Port of LA, though some transport companies will be looking to pick up goods at other points in Southeast Asia to try to fill up their ships, Seroka said.
“Realistically speaking, until some accord or framework can be reached with China, the volume coming out of there — save a couple of different commodities — will be very light at best,” Seroka said.
Along with the lower volume of goods, Seroka said he expects roughly a quarter of the usual number of arriving ships to the port to be canceled in May.
Trump announced a sharp increase in tariffs on Chinese goods on April 2, which led to escalation on both sides, eventually resulting in both the U.S. and China imposing levies of more than 100% on many goods from each other. U.S. Treasury Secretary Scott Bessent has described the situation as “unsustainable” but there has been no sign of substantial negotiations between the two countries.

Data on shipments out of China had already started to signal slowing trade volume to the U.S., alarming some economists. Apollo Global Management’s chief economist, Torsten Slok, recently laid out a timeline where lower imports from China leads to layoffs in transportation and retail industries in the U.S., empty shelves and a recession this summer.
Seroka said he thinks U.S. retailers have about five to seven weeks before the impact of the curtailed shipments begins to bite, partly because companies stocked up ahead of Trump’s tariff announcements.
“I don’t see a complete emptiness on store shelves or online when we’re buying. But if you’re out looking for a blue shirt, you might find 11 purple ones and one blue in a size that’s not yours. So we’ll start seeing less choice on those shelves simply because we’re not getting the variety of goods coming in here based on the additional costs in place. And for that one blue shirt that’s still left, you’ll see a price hike,” Seroka said.

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Sportswear giant Adidas said Tuesday that President Donald Trump’s tariffs would eventually cause it to raise prices on all its U.S. products.
The German company added that it was unable to confirm how much prices would rise by due to uncertainty about tariff rates, with key suppliers in China, Vietnam and Cambodia.
In results that were largely pre-released, Adidas net income from continuing operations leapt 155% in the first quarter to 436 million euros ($496.5 million), above the 383 million euros forecast in an LSEG-compiled consensus.

Sportswear giant Adidas on Tuesday said that U.S. President Donald Trump’s tariffs would result in price hikes for all its U.S. products.
The company said it did not yet know by how much it would boost prices, also noting that the global trade dispute was preventing it from raising its full-year outlook despite a bumper increase in first-quarter profits.

“Higher tariffs will eventually cause higher costs for all our products for the US market,” Adidas said in a statement.
The company said it was “somewhat exposed” to White House tariffs on Beijing — currently at an effective rate of 145% — but that it had already reduced exports of its China-made products to the U.S. to a minimum. However, it said the biggest impact was coming from the general increase in U.S. tariffs on all other countries, which are largely held at 10% while trade negotiations take place.
“Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be,” the Adidas statement continued.
“Therefore, we cannot make any ‘final’ decisions on what to do. Cost increases due to higher tariffs will eventually cause price increases, not only in our sector, but it is currently impossible to quantify these or to conclude what impact this could have on the consumer demand for our products.”
Adidas said it was currently unable to produce almost any of its products in the U.S.

The company, best-known for sneakers including Superstar, Sambas, Stan Smiths and Gazelles as well as sportswear, uses factories in countries including Vietnam and Cambodia — which are facing U.S. tariffs upwards of 40% in the absence of a trade deal.
A similar dilemma regarding price hikes and demand impact is facing almost all retail businesses which serve the U.S., from ultra-low-cost e-retailers like Temu to luxury giants such as Hermès.

Earnings improve

Without the cloud of U.S. tariffs, Adidas would have raised its full-year outlook for revenues and operating profit due to a strong order book and positive brand sentiment, the company said. It instead reaffirmed its existing outlook, but said the “range of possible outcomes has increased.”
In results that were largely pre-released, net income from continuing operations leapt 155% in the first quarter to 436 million euros ($496.5 million), above the 383 million euros forecast in an LSEG-compiled consensus. Net sales climbed 12.7% to 6.15 billion euros as its operating margin rose 3.8 percentage points to 9.9%.
The firm has finally shaken off a years-long headache from its collaboration with controversial musician Ye, with whom it cut ties in 2022 over antisemitic comments. It announced last month it had sold the last of its Yeezy stock.
Analysts at Deutsche Bank said in a Tuesday note that Adidas delivered a “good print with the company making progress across all areas,” despite higher uncertainty.
“So far this year, Adidas has been seeing double digit sales growth across all regions and channels, with wholesale outperforming the direct-to-consumer offering,” Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said in a note.
“Footwear continues to be a strong performer, with consumers also opting for lifestyle clothing, while the performance category also continues to do well. Adidas will hope these trends continue in the face of the economic uncertainty created by tariffs in the US, but unfortunately we very much have to wait and see before the full impact comes through.” More

The Washington Post | The Washington Post | Getty Images

The economic impact of the tariffs imposed by the Trump administration will soon become apparent to everyday Americans and lead to a recession this summer, according to Apollo Global Management.
Torsten Slok, chief economist at Apollo, laid out a timeline in a presentation for clients that showed when the impact of tariffs announced by President Donald Trump could hit the U.S. economy. Based on the transport time required for goods from China, U.S. consumers could start to notice trade-related shortages in their local stores next month, according to the presentation.

“The consequence will be empty shelves in US stores in a few weeks and Covid-like shortages for consumers and for firms using Chinese products as intermediate goods,” Slok wrote in a note to clients Friday.

Tariff to recession timeline:

April 2: Tariffs announced, containership departures from China to U.S. slowing
Early-to-mid May: Containerships to U.S. ports come to a stop
Mid-to-late May: Trucking demand comes to a halt, leading to empty shelves and lower sales for companies
Late May to early June: Layoffs in trucking and retail industries
Summer 2025: recession

Source: Apollo Global Management
To support the idea that the U.S. economy is on the verge of recession, the presentation also included data that shows new orders for business, earnings outlooks and capital spending plans have all fallen sharply in recent weeks.
The Trump administration has paused some of the tariffs announced on April 2, but has hiked duties even higher on China. Treasury Secretary Scott Bessent acknowledged Monday on CNBC’s “Squawk Box” that the current tariff standoff with Beijing is “unsustainable.” Levies on goods from China are now subject to a 145% rate.
China is not the only source of consumer goods, but it does have a large role in the U.S. economy. The U.S. imported $438.9 billion of goods from China in 2024, according to the Office of the United States Trade Representative, putting it right behind Mexico and above Canada on the list of trading partners by that metric.

While many on Wall Street are now saying that a recession for the U.S. is likely in 2025, Slok’s predictions are toward the more pessimistic side. Bessent has said the administration expects a “detox period” for the economy due to the trade negotiations but not necessarily a recession.
There is also some evidence of a “pull-forward” in orders from before the tariffs were announced, which could keep goods on the shelves for longer than the Apollo timelines sets out.
“Don’t expect empty shelves yet — [year to date] stock is still up, and demand is slowing,” Bernstein analyst Aneesha Sherman said in a note to clients Monday.
— CNBC’s Michael Bloom contributed reporting.

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The IMF last week cut its growth outlook for the euro area, also making downgrades for the U.S., U.K. and many Asian countries due to President Donald Trump’s volatile tariff policy.
The negative impact of tariffs will be slightly offset by Germany’s recent infrastructure spending bill, which will boost growth in the euro area over those two years, Alfred Kammer, director of the European department at the IMF said.
He added that the ECB should only cut interest rates once more this year despite growth risks.

Higher German infrastructure spending will boost Europe’s economic growth in the coming years — but not enough to outweigh the expected drag from U.S. tariffs, according to Alfred Kammer, director of the European department at the International Monetary Fund.
The IMF last week cut its growth outlook for the euro area, also making downgrades for the U.S., U.K. and many Asian countries due to President Donald Trump’s volatile tariff policy.

The institution cut its euro area growth forecasts for each of the next two years by 0.2 percentage points, to 0.8% in 2025 and 1.2% in 2026.
“It’s the tariffs and the trade tensions which weigh on the outlook rather than the positive effects on the fiscal side,” Kammer told CNBC’s Carolin Roth in an interview at the IMF-World Bank Spring Meetings last week.
“What we see is we have a meaningful downgrade for Europe advanced economies… and for the emerging euro area countries double as much over this two-year period.”
The negative impact of tariffs will be slightly offset by Germany’s recent infrastructure spending bill, which will boost growth in the euro area over those two years, Kammer said.
Exemptions passed to Germany’s longstanding debt rules have unlocked higher defense spending and enabled creation of a 500 billion euro ($548 billion) infrastructure and climate fund. The move has been described by economists as a potential “game changer” for the sluggish economy — the largest in the euro zone.

Inflation job nearly done but tariff risks loom — What European Central Bank members said this week

However, optimism has been shaken by U.S. tariffs, which are widely expected to dampen global growth and trade flows.
Several policymakers at the European Central Bank told CNBC last week that while the inflation path appeared positive — with tariffs potentially bringing inflation in the bloc down further — their broader outlook was now significantly more uncertain.
The IMF’s Kammer said that the ECB should only cut interest rates once more this year, by a quarter percentage point, despite growth risks.
The ECB has so far reduced rates seven times in quarter-percentage-point increments, starting in June 2024. Its most recent move lower in April took the deposit facility, its key rate, to 2.25%.
“We have a very clear recommendation for the ECB. What we saw so far is a huge success in the disinflation effort and monetary policy has worked … so we are expecting to sustainably hit the 2% inflation target in the second half of 2025,” Kammer told CNBC.
“Our recommendation is there is room for one more 25-basis-point cut, in the summer, and then the ECB should hold that 2% policy rate unless major shocks hit and there is a need for recalibrating monetary policy,” he added.
Overnight index swap pricing on Monday pointed to market expectations for two more quarter-point cuts this year. More