According to Axios, the CEOs of three major retail chains — Home Depot, Target and Walmart — “privately” gave President Donald Trump a stern warning when, on Monday, April 21, they told him that his steep tariffs could disrupt supply chains and lead to “empty shelves” in stores.
Logistics expert Ryan Peterson, founder and CEO of Flexport, discusses the possibility of supply chains being interrupted in a thread posted on X, formerly Twitter, on April 23. And customers, he says, are already suffering and hoping Trump will “step back from the cliff.”
“In the 3 weeks since the tariffs took effect,” Peterson explains, “ocean container bookings from China to the United States are down over 60% industry wide. The U.S. imports $600B worth of goods from China every year, 95% of that via ocean freight. Those goods sell at retail for ~$2T.”
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According to Peterson, “mass shortages” are a very real possibility if Trump’s tariffs cause supply chain disruption and prevent imported goods from getting to warehouses and stores.
“If the tariffs on China continue at this level,” Peterson warns, “we (will) see a $2T hit to economic activity in our country, the failure of tens of thousands of American businesses, and the laying off of millions of employees. We will also have mass shortages this summer as the goods don’t show up. The first ships carrying goods paying the duties arrived on Monday. And the decline in freight arrivals will hit in the coming weeks.”
Peterson implies that even if Trump backs down from his steep tariffs, damage has already been done.
“Soon we may find ourselves in a bullwhip scenario where Trump relaxes the tariffs, all those cancelled orders get rebooked creating a huge surge,” the Flexport CEO notes. “And with all the cancelled services and repositioned vessels, there won’t be enough throughput in the ocean network to keep up.”
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According to Peterson, “Our customers are suffering right now, and desperate to see the Trump administration step back from the cliff before these policies destroy their businesses completely.”
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