Trump's 'done' deal with China: Trade damage will remain, logistics firms and retailers say

President Donald Trump declared the trade warfare with China "done" Wednesday, portion Commerce Secretary Howard Lutnick said tariffs connected Chinese goods volition beryllium locked successful astatine the existent 55% rate without further increases. Even if the solution to the conflict with the biggest U.S. foe successful Trump's commercialized warfare is real, the harm to the proviso chain, the U.S. user and the system volition remain, accidental logistics and retail manufacture executives.

The latest headlines successful the commercialized warfare travel amid a slowdown successful orders arsenic the aboriginal 2025 play of tariff front-loading ended and firms crossed the system prepared for a imaginable slowdown successful the U.S.

"I deliberation there's a accidental existent numbers volition deteriorate soon," Jamie Dimon, CEO of JPMorgan, the nation's largest bank, said astatine a Morgan Stanley lawsuit Tuesday, earlier the Trump administration's astir caller comments.

Alan Baer, CEO of logistics steadfast OL USA, said the existing 55% tariff connected Chinese goods volition enactment hundreds, if not thousands, of companies and yet jobs astatine risk. "Very fewer firms person the pricing powerfulness to sorb the tariffs oregon rise prices to offset the impact," Baer said. "Ultimately, the user pays."

White House officials told CNBC the 55% tariff mentioned successful Trump's societal media station comes from the stacking of the Chinese tariffs. This is the minimum complaint being paid by U.S. shippers.

U.S. importers told CNBC the complaint is inactive mode excessively precocious to resume afloat orders.

"A 55% tariff from China volition substantially origin instability for user goods companies that are bringing goods successful from China," said Bruce Kaminstein, a subordinate of NY Angels and laminitis and erstwhile CEO of cleaning products institution Casabella. "President Trump precocious said helium doesn't privation to marque T-shirts. Why is helium doing this then? Does helium privation to marque spatulas? I don't deliberation so."

The latest national ostentation data released Wednesday showed a smaller-than-expected summation successful prices, though volatility is expected with uncertainty astir tariff policies remaining.

Kaminstein said astir companies are moving connected a 40%-60% gross margin, which volition origin either important terms increases oregon important cutting of expenses to survive, adding accent to the currency travel of these companies.

"A reported 55% tariff connected our largest supplier of American apparel and footwear, stacked connected apical of already precocious MFN and Section 301 rates is not a triumph for America," said Steve Lamar, CEO of the American Apparel and Footwear Association. "We're intimately watching for much details, but the world is this: Nearly each apparel and shoes sold successful the U.S. are present taxable to elevated tariff rates. These costs volition deed American families hard, particularly arsenic they get acceptable for back-to-school buying and the vacation season. New commercialized deals that bring little tariffs can't travel soon enough."

The Chinese authorities has not confirmed the Trump statements beyond saying Tuesday it had agreed to the "Geneva consensus" commercialized terms worked retired earlier this twelvemonth with the U.S. Trump said successful a societal media station Wednesday astir the woody that it is "subject to last approval" of Trump and Chinese President Xi Jinping.

Also connected Wednesday, Treasury Secretary Scott Bessent floated the idea of extending commercialized tariff pauses with countries negotiating successful bully faith.

The tariff uncertainty is besides weighing connected EU exports bound for the U.S. Lutnick said Wednesday that an EU commercialized woody would apt travel last, partially owed to the request to woody with a bloc of countries alternatively than a azygous government.

Consumer demand, recession fears proceed during tariff pauses

Freight carriers focused connected commercialized betwixt the U.S. and the EU said they are concerned.

Andrew Abbott, CEO of Atlantic Container Lines, a niche water bearer connected the Europe/US commercialized lane, told CNBC the gait of exports and imports has been good, but helium is disquieted a large correction is coming due to the fact that of the tariff uncertainty and lingering fears of a recession.

"The transatlantic commercialized has seen an summation successful cargo measurement successful some directions during the past month, averaging 15% compared to past year," Abbott said. "An expanding fig of our U.S. import customers are expressing fears of reduced income due to the fact that of a imaginable U.S. recession successful the 2nd half, truthful this is weighing dense connected people's minds."

As a result, Abbott said, galore companies are choosing the "wait and see" strategy up of immoderate woody being made.

The commercialized headlines and concerns travel up of an expected summation successful orders successful July and August, highest play for containers to get for the vacation buying season. But logistics experts accidental determination volition beryllium nary Covid-level surges astatine U.S. ports.

"Companies pulled successful freight to get retired of the tariff crosshairs successful March, April and May," said Dean Croke, main expert astatine DAT Freight & Analytics. "Warehouse organisation surged astatine that time. We are fundamentally successful highest play now."

The archetypal customers to instrumentality vantage of the tariff intermission model were those with time-sensitive cargo, specified arsenic aesculapian supplies, and high-value cargo, specified arsenic automotive parts, luxury furniture, and fashion, according to Mike Short, president of planetary forwarding for CH Robinson.

Noah Hoffman, vice president for retail logistics for C.H. Robinson, told CNBC that erstwhile helium was visiting 1 of its biggest retail customers past week, "I was lone benignant of amazed to spot jack-o'-lantern meal plates successful their organisation halfway already."

"We're 4 months retired and already moving Halloween items to beryllium acceptable for store transportation the adjacent day," Hoffman said. "We're seeing the aforesaid happening successful our retail consolidation centers, wherever we're pulling successful seasonal and vacation freight from aggregate retail suppliers."

"This is simply a operation of carryover inventory from past twelvemonth and freight front-loaded successful Q1 to debar the higher tariffs that were coming successful April," helium said.

'Damage is done' successful trucking

After the U.S. agreed to a intermission successful the commercialized warfare with China, plans were made for shipping that volition effect successful "a engaged four-week play this summer," Croke said. But "trucking carriers are disquieted astir the remainder of the year," helium added. "The 2nd 4th is usually an important setup 4th for the remainder of the year, which drives rates up. This means arsenic of now, they are disquieted they volition play catch-up for the remainder of the year."

In the existent tariff intermission window, determination is inactive clip to bring merchandise successful from China earlier the 90-day model closes successful mid-August, Hoffman said. "Domestically, we mightiness beryllium moving immoderate of that freight successful precocious June and into July. So, shoppers whitethorn person less back-to-school items to take from, but astatine this point, glow-in-the-dark skeletons and fake vampire teeth volition astir apt marque it," helium said.

The trucking industry, successful particular, is facing a assortment of challenges. While imports lend astir 10% of trucking demand, home manufacturing is traditionally the main driver, but request is down. Produce season, different manufacture driver, is adding to headwinds owed to colder outpouring temperatures successful California and decreased user demand.

"I deliberation the harm is done this year," Croke said. "Carriers volition conflict to retrieve this year. The proviso concatenation volition not retrieve until these commercialized deals are done. When you suffer trust, however bash you marque concern decisions erstwhile it tin beryllium undone successful a tweet? You person to expect the worst-case scenario, and thing amended than that is an upside. I don't spot however the marketplace recovers."

The trickle-down interaction of the little freight volumes tin beryllium seen successful intermodal volume, down 7.42% twelvemonth implicit year, and truckload volume, down 13.37% twelvemonth implicit year. Both the obstruction and trucking industries marque their profits successful moving containers.

The Ocean TEU Index, which represents the measurement of water instrumentality bookings, shows 2025 is trailing 2024 somewhat twelvemonth implicit year. Historically, cargo measurement has been an aboriginal U.S. user request prediction tool.

The National Retail Federation's forecast, based connected orders and instrumentality investigation for June done October's vacation shipping season, is down 14% twelvemonth implicit year. Jon Gold, vice president of proviso concatenation and customs argumentation astatine the NRF, said erstwhile a woody is signed, the tariff complaint connected China volition beryllium captious for concern decisions.

"We look guardant to getting much accusation from the administration," Gold said. "However, agreeing to a 55% tariff that maintains the existent IEEPA, fentanyl, and Section 301 tariffs is inactive highly high, peculiarly for tiny businesses that proceed to conflict with the existent tariffs."

Manufacturing retired of Asia fell to a 17-month low, according to the latest GEP Global Supply Chain Volatility Index, a starring indicator tracking request conditions, shortages, proscription costs, inventories and backlogs, based connected a monthly survey of 27,000 businesses.

Another starring indicator informing of a alteration successful manufacturing orders and leaner vacation inventories is bare water freight containers.

ITS Logistics' June U.S. Port/Rail Ramp Freight Index showed that bare instrumentality instrumentality issues persisted astatine the ports of Los Angeles and Long Beach, the nation's busiest. "Empty instrumentality buildup continues contempt higher outbound empties; congestion challenges remain," the study said.

CH Robinson said it expects softer conditions to persist astatine the ports of LA and Long Beach, with measurement to emergence period implicit period successful aboriginal June but stay little than this clip past year.

According to North American larboard information investigation from ITS Logistics, the terminals that process the containers astatine ports nationally are moving astatine 60%-75% capacity.

The U.S. export marketplace volition besides proceed to acquisition challenging conditions owed to constricted vessels aft a pullback successful sailings by water freight companies.

At the Port of New York, a surplus of bare containers is simply a effect of New York larboard terminals restricting returns and limiting immoderate export bookings to escaped up vas abstraction and amended flow. "Ongoing blank sailings person hindered carriers' quality to reposition instrumentality efficiently," C.H. Robinson said. "With constricted vas calls and mounting backlogs, this imbalance is expected to persist successful the weeks ahead."

At Gulf Coast ports, tariff-related request shifts and blank sailings importantly reduced the measurement of incoming containers. "As a result, exporters should expect tightening instrumentality availability, peculiarly astatine inland obstruction ramps and U.S. Gulf Coast ports specified arsenic Houston, starting successful July oregon August," C.H. Robinson said.

During the Covid pandemic, the transport of bare containers backmost to China took precedence implicit U.S. exports. Manufacturers successful China and Asia needed those containers truthful they could capable them with products rapidly to support up with the tremendous U.S. user demand.

"With the important simplification successful vessels calling LA/LB owed to the tariff activity, we are seeing important increases successful bare instrumentality dwell extracurricular of the terminals," said Paul Brashier, vice president of planetary proviso concatenation astatine ITS Logistics. "It is getting precise hard to find locations to terminate empties and successful summation galore water carriers are implementing laborious termination policies" not seen since the post- Covid era, helium said.

The UK tariff intermission resulted successful the restoration of much "normal" measurement successful that market, Abbott said. The fearfulness of an EU tariff intermission ending successful July fueled the accrued EU shipments arsenic manufacturers stocked shelves a spot much successful lawsuit a UK-type woody for the EU, and woody connected alloy and aluminum tariffs, are not agreed to successful a mode that favors greater trade.

But the ongoing uncertainty tin beryllium seen successful the exports of the apical countries to the U.S.

Departed instrumentality volumes — 20-foot equivalent units — amusement Italy is down 15% twelvemonth implicit year. China is down 11% twelvemonth implicit year, portion South Korea is down 9%. Vietnam and India, some beneficiaries of the China-plus-one proviso concatenation strategy, are up 21% and 13%, respectively.

Factoring successful the question clip and the commercialized intermission deadlines, U.S. importers lone person 1 much week to spot water freight orders from the EU to person their products get successful the U.S. earlier the tariff intermission deadline.

Orders from China request to beryllium placed by the extremity of June to bushed retired the existing tariff intermission deadline.