Across the world, businesses aren’t waiting until U.S. Inauguration Day on Jan. 20 to see which countries, products or tariff rates are announced in President-elect Donald Trump’s widely telegraphed trade wars, according to Bloomberg. The mere threat of his universal tariffs is sparking a scramble that’s leaving the global trading system prone to bottlenecks, saddled with higher costs and vulnerable to disruptions should an economic shock come along.
“We’re still in the freakout period,” Robert Krieger, president of Los Angeles-based customs brokerage and logistics advisory firm Krieger Worldwide, told Bloomberg. “There’s about to be a king tide in the supply chain.”
To get ahead of the game, some firms are frontloading orders. Others are seeking new suppliers or, if that’s not possible, renegotiating terms with existing ones. A common theme: The renewed stress comes with higher costs, in the form of bigger inventories, costlier expedited shipping, or taking a chance on untested partners. Profits will suffer and expenses will be reduced elsewhere, they said. Ultimately consumers will foot the bill.
China’s ports saw double-digit growth in container throughput in the two weeks around the election and that rose further to an almost 30% gain in the second week of December. International air freight flights have increased by at least a third each week since mid-October and economists expect that’ll continue as customers rush to frontload orders.
The busiest container gateway in the U.S., made up of the twin ports of Los Angeles and Long Beach, is seeing a surge of inbound shipments — not unlike the wave that accompanied Trump’s first tariff volleys at China. Both ports smashed pandemic-era records in the third quarter and volumes are expected to stay elevated into the new year.
