As President Donald Trump’s trade war continues to roll on, U.S. products that would have once been sold across the world remained trapped in the country.
When the U.S. placed tariffs on dozens of countries, some retaliated, hampering the U.S.’s ability to trade with the rest of the world. One of the first effects of the tariffs was a reduction in imports to the U.S., which had suddenly placed exorbitant levies on products. But now several weeks after the tariffs were announced in early April, a new effect of the tariffs has emerged: Products from the U.S. are struggling to get shipped abroad to prospective customers overseas.
“One person’s exports is another person’s imports,” said Peter Swartz, chief science officer at supply-chain management startup Altana. “If there’s a trade war going on, then both sides are going to see both their imports and their exports impacted.”
“The world is fragmenting into blocks as globalization unwinds—we see a rearrangement of global supply chains both for the US and in general, across the multiple tiers of the supply chain,” Swartz said. “The most obvious are the rearrangement of exports away from the highly tariffed U.S. China trade lane.”
However, U.S. exports to some countries rose over the same April and May time frame. For example, exports to India were up 5%, according to Altana’s data.
The tariffs—and in particular, those implemented in China—have the potential to rewire global trade routes, according to Swartz. He explained that as China and the U.S. limit their trade, global goods will get rerouted elsewhere. There is also the fact that as U.S. companies move their production facilities outside of China, global shipping routes will adjust to travel between places like India that could see a rise in manufacturing.
“What that’ll look like then is a rearrangement of the supply chains to match,” Swartz said. “So you might see more flow out of India.”
The port with the steepest decline between these five-week periods was the Port of Portland, which had a 50% drop in exports. However, that port has a small number of shipping containers compared to other U.S. ports.
“We haven’t seen anything like this since the disruptions of summer 2020,” Vizion CEO Kyle Henderson told CNBC. “That means goods expected to arrive in the next six to eight weeks simply won’t. With tariffs driving costs higher, small businesses are pausing orders. Products that once moved reliably are now twice as expensive, forcing importers into tough decisions.”
“We believe we’re in the early innings of U.S.-China trade negotiations, and expect disruptive conditions in the Transpacific,” Cox said during an earnings call last month.
Trump administration officials are in negotiations over trade with multiple countries in an effort to reach agreements that could lower the tariffs, and as a result, the costs that are set to rise for companies across the world. The latest count, according to Treasury Secretary Scott Bessent, is that the U.S. is in simultaneous talks with 17 countries, and that a deal with India appears closest to the finish line. Many businesses are waiting on those deals to close before making any other moves, which also slows down global shipping.
“General global economic uncertainty percolates through the supply chain even along trade links that are not specifically tariffed,” Swartz said.
