Port of Los Angeles Sees 35% Cargo Drop as Trump Tariffs Disrupt Supply Chains and Threaten 900,000 Jobs
U.S. Tariff Shock: Port of Los Angeles Faces 35% Volume Collapse as Supply Chain Crisis Unfolds
LOS ANGELES — As dawn breaks over the sprawling concrete expanse of America's busiest container port, an eerie silence has replaced the usual cacophony of crane motors and diesel engines. Row upon row of empty berths stretch along the waterfront where towering cargo vessels should be queuing.
The Port of Los Angeles, the nation's premier gateway for international trade, has experienced a precipitous 35% drop in cargo volume this week compared to the same period last year — a plunge that Executive Director Gene Seroka had ominously predicted in late April, and which has now materialized with startling precision.
Port of Los Angeles Weekly Cargo Volume (YoY Comparison)
| Week (2025) | Import Volumes (TEU) | YoY Change | Scheduled Vessels |
|---|---|---|---|
| Apr 20 – Apr 26 (W17) | 119,793 | -56.04% | 22 |
| Apr 27 – May 3 (W18) | 85,378 | -10.64% | 17 |
| May 4 – May 10 (W19) | 76,257 | -31.56% | 16 |
| May 11 – May 17 (W20) | 95,103 | -3.51% | 22 |
| May 18 – May 24 (W21) | 94,677 | -43.45% | 18 |
"We're seeing something unprecedented in modern American trade history," a veteran logistics analyst with 30 years of port experience told us. "This isn't just a seasonal dip or market correction. This is structural damage to our supply chain."
The culprit behind this dramatic decline is unmistakable: the Trump administration's aggressive tariff policies toward China, particularly the 145% tariff rate now applied to Chinese imports. This punitive measure, implemented on April 9, has effectively severed decades-old supply chains almost overnight.
Import tariffs, functioning as taxes on goods, increase costs and disrupt global supply chains by altering established trade flows. These economic impacts affect logistics and are often exacerbated during trade wars, forcing businesses to re-evaluate sourcing and distribution strategies.
The Human Cost: Nearly One Million Jobs at Risk
The economic consequences of this policy extend far beyond shipping statistics. In the harsh sunlight of a Southern California afternoon, Sal DiCostanzo, a member of the International Longshore and Warehouse Union (ILWU), surveyed the half-empty port with visible concern.
DiCostanzo pointed out the unusually empty berths and emphasized that many people are unaware of the seriousness of the situation. He explained that the current conditions are putting 900,000 Southern California workers at risk of losing their jobs, which could have serious effects on families, home ownership, and education plans.
The scale of potential employment impact is staggering. The ports of Los Angeles and Long Beach together handle approximately one-third of all cargo containers entering the United States from abroad. For Southern California's ports alone, about 175,000 workers are directly employed in harbor operations, trucking, and warehouse storage.
Economic modeling suggests each 1% drop in container volume costs approximately 2,800 jobs in the region. With the current 35% decline, nearly 100,000 direct roles are endangered in Southern California's logistics sector alone.
Estimated Job Losses in Southern California Logistics per 1% Drop in Container Volume
| Job Category | Estimated Loss per 1% Drop | Notes |
|---|---|---|
| Total Trade Cluster Jobs | 8,000 jobs | Based on a 9.6% drop equaling 77,100 lost jobs (2006–2022 data). |
| Direct, Indirect & Induced Regional Jobs | ~2,770 jobs | From a 2023 study on LA and Long Beach ports (reported in 2025); risk could reach 4,000. |
| Middle-Class Blue-Collar Wage Jobs | ~6,820 jobs | Estimated from 65,500 jobs lost due to 9.6% volume decline. |
Mario Cordero, CEO of the neighboring Port of Long Beach, echoed these concerns in a statement released, warning that decreased vessel arrivals "could result in fewer jobs" — a dramatic understatement of what many industry insiders view as an impending employment catastrophe.
Logistics Chain in Free Fall: The Metrics of Disruption
The disruption at America's premier port complex is profound and measurable. Weekly container arrivals at the combined Los Angeles/Long Beach ports have plummeted from approximately 95 vessels pre-tariff to just 53 vessels in the first week of May 2025 — a 44% decline.
Perhaps most alarming for shipping executives is the surge in "blank sailings" — industry terminology for canceled voyages. Such cancellations have skyrocketed by 467% for May, with 34 voyages now scrapped compared to just six in the previous comparable period.
Blank sailings refer to cancelled shipping voyages or skipped port calls, often implemented by carriers to manage capacity in response to fluctuating demand, port congestion, or to stabilize freight rates. These occurrences can significantly disrupt supply chains by causing delays and uncertainty.
The economic ripple effects extend across the Pacific. Spot freight rates from the Far East to the U.S. West Coast have collapsed by 44% since January, plummeting from $5,000 per container to $2,790 — a development that threatens the financial viability of numerous shipping lines.
Spot Freight Rates: Far East to U.S. West Coast (Jan–May 2025)
| Date | Rate (USD/FEU) | Key Context | Source |
|---|---|---|---|
| Jan 30 | 5,175 | January peak; down 5% from earlier in the month | Bertling/Drewry |
| Mar 7 | 3,160 | Down 35% from February | Xeneta |
| Mar 20 | 2,680 | Down 54% since Jan 1 | Xeneta |
| Apr 3 | 2,187 | Down 50% post-Lunar New Year; 20% below 2024 lows | Freightos FBX |
| Apr 10 | 2,935 | Flat since Apr 1; up 15% from Mar; down 50% since Jan | Xeneta |
| Apr 30 | 2,658 | Down 35% MoM in March; increase expected in May/June | Bertling |
| May 1 | 2,590 | Down 1% WoW; Shanghai–LA specific | Drewry WCI |
| May 6 | 2,790 | Flat since mid-April; down 52% since Jan | Xeneta |
"Major U.S. retailers have simply stopped ordering from China," explained an international trade attorney who advises several Fortune 500 companies. "When your landed cost suddenly increases by nearly one and a half times, entire business models become unsustainable overnight."
Stagflation Warning Lights: Inflation and Growth Outlooks Darken
The economic implications of this supply chain disruption are particularly troubling as they point toward stagflation — that dreaded economic condition combining slowing growth with accelerating inflation.
Stagflation describes the challenging economic scenario of slow growth occurring simultaneously with high inflation, a dual threat. Understanding this phenomenon involves exploring its definition, causes, significant economic impacts, and historical occurrences.
Economic forecasters have already begun slashing their growth projections for 2025, cutting between 0.5 and 0.9 percentage points from expected real GDP growth. The consensus now hovers around 1% real GDP growth for the year, down substantially from the 1.8% projected before the tariff implementation.
2025 U.S. Real GDP Growth Revisions After Tariffs
| Organization | Revised Forecast (%) | Note |
|---|---|---|
| IMF | 1.8 | Downgraded from 2.7 due to tariffs |
| Fed (FOMC) | 1.7 | Slower growth from tariff impact |
| Goldman Sachs | 1.7 (Q4 YoY) | Tariffs expected to dampen growth |
| OECD | 2.2 | Assumes sustained U.S.-China tariffs |
| Conference Board | 1.6 (YoY) | Growth shock post-April tariff hike |
| CBO | 1.9 | Forecast reflects cooling economy |
Simultaneously, inflation pressures are building. The Boston Federal Reserve estimates the mechanical pass-through of these tariffs will add approximately 0.5 percentage points to core PCE inflation. More comprehensive modeling from Yale Budget Lab's CGE analysis suggests the full 2025 tariff stack will lift consumer price index levels by 2.3% and cost the median American household an additional $3,800 annually.
Most concerning to monetary policymakers, S&P Global now forecasts core CPI will rebound to 4% by year-end, likely forcing the Federal Reserve to maintain higher interest rates for a longer period — postponing expected rate cuts until the second quarter of 2026.
"We're looking at a classic stagflation pulse," observed a senior economist at a major investment bank. "Headline inflation will likely spike in the third and fourth quarters as retailers exhaust their pre-tariff inventories of toys, apparel, and other consumer goods. After that, deflationary forces from weakened consumer demand will eventually take over, but the transition will be painful."
Geographic Shift: East Coast Ports Poised to Benefit
Not all maritime facilities are suffering equally. As West Coast ports struggle with volume collapse, East Coast and Gulf Coast ports are experiencing a modest uptick in traffic — a trend that could accelerate if the tariff regime persists.
"We're already seeing strain on Savannah's rail infrastructure as shippers reroute cargo," noted a transportation consultant who works with multiple port authorities. "This could become a structural shift in American trade patterns."
The Port of Savannah in Georgia appears particularly well-positioned to benefit from this realignment, with its extensive rail connections to the Midwest and recent capacity expansions. Industry experts anticipate an acceleration of capital expenditure at East Coast facilities as they race to accommodate this potential long-term shift in trade flows.
Winners and Losers in the Supply Chain Shakeup
The tariff-induced disruption has created clear winners and losers across the economy. Among the most vulnerable are West Coast dockworkers and truckers, who are already experiencing severe cuts to working hours and the elimination of lucrative overtime opportunities.
Major retailers like Walmart, Target, and Costco face a complex adjustment period. In the immediate term, they benefit from lower costs of goods sold as they work through existing inventory. However, industry analysts predict margin squeezes and potential Christmas season shortages as the year progresses, particularly in categories heavily dependent on Chinese manufacturing.
Mexico and suppliers in CAFTA (Central America Free Trade Agreement) countries are emerging as beneficiaries of the "China-plus-2" sourcing strategy now rapidly being adopted by U.S. companies. The influx of tooling orders and manufacturing contracts to these neighboring countries is already visible in preliminary trade data.
The "China-Plus-Two" sourcing strategy explains how companies diversify their manufacturing by maintaining a base in China while adding operations in two other countries. This approach often leverages nearshoring or friend-shoring to build more resilient supply chains and reap associated benefits.
The clean technology sector faces particular challenges. Input costs for electric vehicles and solar installations have jumped dramatically, with Chinese cell imports effectively halted. While this creates short-term headwinds for the sector, domestic manufacturing facilities may gain market share in the medium term — though likely at higher cost structures.
Market Reaction: Flight to Quality and Volatility
Financial markets have responded to the supply chain disruption with predictable nervousness. Gold has surged to an all-time high of $3,400 per ounce as investors seek safe havens amid heightened tariff risk and broader geopolitical concerns. Gold Price (USD per ounce) Performance Amidst Rising Trade Tensions
| Date | Price (USD/ounce) | Change | Notes |
|---|---|---|---|
| May 7, 2025 | $3,385.32 | -15.42 (0.45%) | Gold slipped as US and Chinese officials are set to meet, potentially easing trade tensions. Investors also await the Federal Reserve's policy decision. |
| May 6, 2025 | $3,401.00 | -$4.64 | Gold prices reached a two-week high due to renewed safe-haven demand following tariff announcements and a declining U.S. dollar. |
| May 5, 2025 | $3,333.59 | ||
| April 2025 | $3,500 (High) | Gold reached an all-time high during this month. | |
| Jan 1, 2025 | $2,624.60 (Open) | Gold has seen a significant increase since the beginning of 2025. | |
| Dec 9, 2024 | $2,660.50 | Gold prices experienced volatility towards the end of 2024. | |
| Oct 30, 2024 | $2,785.40 | A new record high for gold was set, fueled by a weaker-than-expected US consumer price index report. | |
| Aug 28, 2024 | $2,502.53 | Gold price showed impressive growth in 2024, increasing by over 21% in under eight months. | |
| Jan 1, 2024 | $2,063.73 | Starting price for gold at the beginning of 2024. |
The equity volatility index (VIX) has climbed above 26, though some market strategists argue this still underprices the macroeconomic uncertainty. Ten-year Treasury yields have begun to decline as investors anticipate economic weakness will eventually outweigh inflationary pressures. CBOE Volatility Index (VIX) Trend Reflecting Market Uncertainty
| Date | VIX Level | Change from Previous Day | Change from One Year Ago | Market Conditions/Events |
|---|---|---|---|---|
| May 7, 2025 | 24.76 | +4.74% | N/A | General market volatility. The VIX measures the market's expectation of 30-day volatility of the S&P 500. |
| May 5, 2025 | 23.64 | +4.23% | +75.24% (from 13.49) | The VIX is used as a barometer for market fear and uncertainty. |
| May 2, 2025 | 22.68 | N/A | N/A | The VIX measures the expectation of stock market volatility over the next 30 days implied by S&P 500 index options. |
| April 7, 2025 | 55 | N/A | N/A | Global equity markets fell due to worsening trade conflict; VIX spiked to a level last seen during the early COVID-19 pandemic. |
| April 4, 2025 | >40 | Rose over 30% | N/A | U.S. stock markets in "panic mode" due to White House tariff announcement and China's retaliation. VIX hit highest level since August 2024. |
| March 2020 | ~90 | N/A | N/A | COVID-19 pandemic outbreak caused extreme market panic and VIX reached near unprecedented levels, coinciding with a market bottom. |
| Oct 24, 2008 | 89.53 | N/A | N/A | One month after Lehman Brothers' bankruptcy, VIX recorded its maximum record ever. |
| 2018-2019 | Varied | N/A | N/A | Trade war between US and China caused market volatility with VIX fluctuations dictated by news on trade talks and tariff implementations/removals. |
Interpreting VIX Levels:.
- Below 15-20: Generally indicates low volatility, optimism, and market stability.
- 15-25 (or 20-30): Indicates a normal or moderate level of volatility.
- Above 25 (or 30): Signifies heightened market turbulence, investor fear, and increased uncertainty. Levels above 40 are considered extreme.
"The bond market is signaling a bumpy landing," remarked a fixed-income portfolio manager at a major asset management firm. "The yield curve is re-flattening as expectations for Fed rate cuts get pushed further into the future while long-term growth prospects dim."
Potential Resolution Scenarios
While the immediate outlook appears bleak, several potential scenarios could alter the trajectory of this supply chain crisis. Market participants assign a 25% probability to a mini-deal between the U.S. and China at the upcoming WTO talks in Geneva, which could reduce the tariff rate to 65% by October — still punitive, but potentially workable for some product categories.
More concerning is the 20% probability that ILWU dockworkers could strike for federal relief, potentially shutting West Coast ports for two weeks. Such an action would likely drive Brent crude oil prices $10 higher and push the VIX above 40, possibly forcing the Federal Reserve to open an emergency "Freight Backstop" facility.
Policymakers are also watching for signs of transshipment — the practice of routing Chinese goods through third countries to avoid tariffs. There's a 10% probability that the administration could impose reciprocal tariffs on Mexico if evidence of such practices emerges, potentially derailing the near-shoring narrative that has gained momentum in recent weeks.
Transshipment involves routing goods through an intermediate country before they reach their final destination. This can be exploited to circumvent tariffs by misrepresenting the goods' true country of origin, an often illegal practice designed to avoid higher import duties.
Signposts and Strategies
As the supply chain crisis unfolds, key indicators bear watching. The Port of Los Angeles releases TEU (twenty-foot equivalent unit) throughput flash data every Tuesday, providing real-time insight into volume trends. The count of blank sailings tracked by maritime intelligence firms Xeneta and Sea-Intelligence offers forward visibility into shipping capacity.
TEU, or Twenty-Foot Equivalent Unit, is a standard measure in shipping logistics used to describe the capacity of container ships and terminals. It represents the volume of a standard 20-foot long intermodal container, providing a consistent way to quantify container port cargo volume.
July import data for toys and apparel will be particularly telling. If these categories remain down more than 30% year-over-year, retail earnings expectations for the fourth quarter will likely face significant downward revisions.
The Federal Reserve's Beige Book references to "tariff pass-through" will provide valuable insights into how the central bank is assessing the inflationary impact of these measures. Meanwhile, any congressional discussions about emergency import-VAT credits would signal a potential policy pivot.
The Federal Reserve's Beige Book is a report summarizing anecdotal information on current economic conditions across the twelve Federal Reserve Districts. This "economic snapshot" helps inform the Federal Open Market Committee (FOMC) members in their deliberations on monetary policy.
"In a supply-chain war, the fastest mover isn't the ship—it's capital," observed a veteran trade analyst. "The winners will be those who recognize the structural shifts early and position accordingly."
For now, the Port of Los Angeles and its thousands of workers find themselves at the epicenter of an economic experiment with far-reaching consequences. As the quiet docks await the next chapter in America's trade policy, the human and economic costs of this abrupt disruption continue to mount.