Shipping Data Suggests Sharp Drop In Trade Between USA & China
Stock up while we still can???
A big chill is settling upon us... I've been reading articles and watching videos in the last few weeks that present information suggesting we may soon be facing a summer of empty shelves as trade with China is seeing a dramatic downturn. As an example, an article titled, 'All Quiet On The Western Ports' on Zero Hedge this morning shows that for the week ending today, April 26, just under 120,000 containers were unloaded at the Port of Los Angeles. For the following week ending May 3, just over 85,000 containers are expected to be unloaded. For the following week ending May 10, that number drops to just over 77,000 containers (and so on).
There's still a lot coming in but the numbers don't lie. The Port of L.A. is already seeing a significant drop in imports. The decline in shipping activity is also affecting other ports such as the Ports of Seattle and Tacoma. According to the Washington Examiner, Ocean carriers have cancelled 81 shipments for the month of April. This week, 12 vessels are expected are to arrive in California. Last week, that number was 22!
This is serious, folks. In a previous post, I stated that Amazon and Walmart would be hardest hit as most of their inventories come from China. Well, earlier this week, the CEOs of Walmart and Target met with President Trump in a private meeting to warn him that their store shelves would start going empty within a few weeks. For the most part, the meeting was kept hush hush but we can assume these CEOs are panicking. Personally, I expect mass layoffs from both these retailers while Amazon sellers too are panicking. This post suggests Amazon third party sellers are 'stashing' goods in Canada in hopes of avoiding tariffs. I think that's a bad bet because if the product states 'Made In China' and sellers try to circumvent tariffs, it could lead to serious consequences for their businesses.
It's not just us facing empty shelves. China, which has threatened to cut vital critical minerals shipments such as rare earth metals to the USA has slapped itself in the face by imposing a 125% tariff on ethane. Ethane is critical in the plastics manufacturing industry and almost everything we touch that is plastic comes from China. As it turns out, China imports 90% of its ethane from the U.S.A..
So while China threatens to cut off vital rare earth metal supply to America, America has its own bazooka in the form of Ethane and already, Chinese plastics manufacturers are facing shutdown and mass layoffs as 125% tariffs eat away at any remaining profits.
It's getting so serious that the Chinese government has warned other countries against making trade deals with America if it is detrimental to China. They 'firmly oppose any party reaching a deal at the expense of China's interests'. Around the world, countries are being forced to choose sides. America is the world's largest importer of goods, totaling $3.83 trillion in 2023. Threatening these other countries will only encourage them to run to the arms of America (and their protection).
Add to the mix the announcement from Hong Kong Post that it will stop shipping small parcels to the USA after the USA said it would remove the 'de minimis' exemption on May 2 which allowed shipments worth less than $800 to come in duty free. Well, not anymore...
It should be clear to all who read this post that serious disruptions are in front of us and should come to a full head this summer. As more and more people realize the true seriousness of the issue, we can expect a rush to the stores similar to what we saw in 2020 at the start of the lockdowns, resulting in... empty shelves.
I think this will really come to light in about 2 weeks or so. In the meantime, to beat the rush, think of the necessities you really need and buy them sooner than later. Car parts should be high on the list. Think cleaning supplies. Think clothing and shoes. I expect a rush to the stores that will push prices higher as items become fewer and harder to find. Get in front of the line, avoid higher prices and empty shelves.
As for food, a lot of it is local so we should be ok on that front but nevertheless, it is a very good idea to stock up on foods. Starting a garden in your backyard this summer is strongly suggested. Also, the risk of inflation could affect food prices for a while. We are transitioning back into an industrial manufacturing base but it'll take a couple of years, possibly up to 5 years to get the momentum going so prepare now to get ahead of the game.
The price of gold which nearly hit $3,500 in the last week is a clear sign that the present financial system is dying and a new financial paradigm is on its way in. We can already feel it coming as the price of Bitcoin once again is nearing $100,000 per. Treasury Secretary Scott Bessent earlier this week called for a re-balancing of the international financial system, specifically mentioning a 'Bretton Woods 2.0' style agreement within the next 4 years!
Which brings us to the fabled 'Mar-A-Lago Accord'. This hasn't happened yet but with Sec. Bessent suggesting Bretton Woods 2.0, it seems to me that what he really meant to suggest was 'Mar-A-Lago'.
Is there any other way I can convince people that sh#t is about to hit the fan? It's going to be a fun summer and it's going to get hot. Earlier this week I went to Dollarama and bought little things like scotch tape, scratch pads for the kitchen and twine rope of all things. I also bought from Costco. Of course, I made sure to buy a large pack of toilet paper. Can't live without it!
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