(End of the American Dream)—The United States imported 438 billion dollars worth of goods from China in 2024. All of a sudden, most of that trade is being cut off. Tariffs on Chinese goods are now so high that it no longer makes economic sense for Chinese companies to export products to us, and it no longer makes economic sense for U.S. companies to import products from China. As a result, container bookings are absolutely plummeting, and retail CEOs are warning that store shelves all over America will “soon be empty”. Yes, retailers will attempt to find replacement items from other sources when it is possible to do so. But in many cases, things that are made in China are not made anywhere else. As retailers run through existing inventory levels, shortages will begin to emerge.
I do not believe that we should have ever started trading with China. And I would love to see a day in the future when we no longer trade with China.
But at this moment we are deeply, deeply dependent on China. Nobody can deny this.
Our economy literally cannot function normally without Chinese imports, and now most of those imports will no longer be coming across the ocean. Most Chinese imports fall into these 10 categories…
- Electrical machinery and TV parts: $124.97 billion, 28% of total imports from China
- Nuclear reactor parts and mechanical appliances: $82 billion, 18% of total imports from China
- Toys, games and sports equipment: $30.03 billion, 7% of imports from China
- Plastics: $19.29 billion, 4% of total imports from China
- Furniture, lamps and pre-fabricated buildings: $18.52, 4% of total imports from China
- Vehicles: $16.85 billion, 4% of total imports from China
- Iron and steel: $11.98 billion, 3% of total imports from China
- Optical and photographic parts: $11.88 billion, 3% of total imports from China
- Clothing: $9.99 billion, 2% of total imports from China
- Shoes: $9.78 billion, 2% of total imports from China
Did you know that China makes 80 percent of our toys?
If you are going to need toys later this year, you may want to stock up now.
It is being reported that container bookings from China to the United States have already “plummeted by over 60% in just three weeks”…
Container shipping between China and the United States faces unprecedented disruption following the implementation of new Trump administration tariffs on U.S. imports from China, with industry leaders warning of potential widespread supply chain impacts and economic consequences that could rival the pandemic.
According to Ryan Peterson, Founder and CEO of Flexport, ocean container bookings from China to the United States have plummeted by over 60% in just three weeks since the new tariffs took effect. The dramatic decline follows the introduction of reciprocal tariffs that went into effect on April 9, setting rates at 145% for China and 10% for all other origin points.
I told you what I thought about this in an article that I posted yesterday.
Today, I would like to share some insights from an industry insider.
Molson Hart is the founder and president of an educational toy company called Viahart. He just posted an analysis of what we are facing that is so good that I decided to share his entire Twitter post in this article…
The White House has put itself and the country in a bad situation but doesn’t realize it yet.
Around April 10th China to USA trade shut down.
It takes ~30 days for containers to go from China to LA.
45 to Houston by sea, 45 to Chicago by train.
55 to New York by sea.
That means that there are no economic effects of what was done on April 10th until about May 10th.
Around that time (it’s already started to happen) trucking work is going to dry up. Warehouses will start doing layoffs because no labor is needed to unload containers and some products will be out of stock, reducing the need for shipping labor.
All this will start in the Los Angeles area.
After about 2 weeks, it’ll start hitting Chicago and Houston.
Let’s say the White House, after 3 weeks, changes its mind, on May 31st.
“This isn’t working out like we thought it would. Tariffs back to 0.”
Let’s say China says “bygones be bygones, we’ll go back to how things were”.
Let’s say every factory in China that got screwed by their orders being cancelled says the same thing “no problem, we’ll make and ship”.
The problem is, even under the most favorable conditions of China and the factories restarting economic ties as though nothing happened, it will be at least another 30 days before economic activity is revived.
And that’s just in LA.
In Chicago/Houston, you’ll need to wait another 45 days.
New York, at that point, will still be getting containers from before April 10th, they will then have 50 days (May 31 minus April 10) of zero economic activity at the ports, in trucking of Chinese goods, in warehousing.
The whole situation is a bit like lockdowns. Once you shut down, it takes a long time to get economic activity back to where it was, if you ever can.
And again, this assumes, that China and its factories, which make things you can’t buy elsewhere, will start right back up again as though nothing happened, which is unlikely.
It’s almost like we’re speeding towards a brick wall but the driver of the car doesn’t see it yet.
By the time he does, it’ll be too late to hit the brakes.
I could not have said it better myself.
When we finally hit that brick wall, millions of people are going to be extremely angry.
Many are suggesting that we should just start making stuff here, and I agree with that.
But the reality of the matter is that it takes a long time to construct new factories.
In a subsequent post on Twitter, Molson Hart commented on this…
Lego is building a factory in the United States.
They began looking for a location in 2021.
They originally expected to start production in the second half of 2025.
They are now forecasting 2027.
The biggest toy company in the world needed 6 years to make in America.
We can’t wait for years until new factories are built, because we are going to be in the middle of a full-blown crisis just months from now.
For example, what are you going to do if you need to get your vehicle repaired and the parts that you need have tripled in price or are no longer available at all?…
“From brake pads and batteries to bumpers and sensors, many of the parts used to repair and maintain vehicles are imported,” Cars.com editor-in-chief Jenni Newman told FOX Business. “If those parts are hit with tariffs, suppliers are expected to pass on the extra cost to repair shops and dealership service departments.”
Not only would this drive up repair bills for consumers, but it could also cause longer wait times if parts become harder to get or inventory is scaled back, Newman said.
There are thousands upon thousands of supply chains that will be disrupted by ultra-high tariffs on Chinese imports.
Unless we want to have a full-blown meltdown, we need to reach a deal with China.
Unfortunately, the Chinese just publicly stated that no negotiations with the U.S. are currently happening…
China is not negotiating with the U.S. over tariffs, Beijing declared Thursday, despite President Donald Trump recently suggesting the 145% tax on its imports could be reduced “substantially.”
Ministry of Commerce spokesman He Yadong said, “Any claims about the progress of China-U.S. trade negotiations are groundless as trying to catch the wind and have no factual basis,” according to the Associated Press.
“The unilateral tariff increase measures were initiated by the United States. If the United States really wants to solve the problem, it should face up to the rational voices of the international community and all parties at home, completely cancel all unilateral tariff measures against China, and find ways to resolve differences through equal dialogue,” he continued.
We should have never allowed ourselves to become so dependent on China.
Sometimes I feel like tearing my hair out, because decades of very foolish decisions have put us into this position.
Now we desperately need Chinese imports, but most of them won’t be coming to us for the foreseeable future, and President Trump just told Glenn Beck that he feels like he is holding all the cards and doesn’t need to negotiate…
‘I don’t have to negotiate. I don’t have to negotiate. I’m talking to people out of respect, but I don’t have to,’ Trump told the former Fox News host.
‘So we’re this giant store that people want to come in and buy from, we’re the United States. We have the richest consumers, etcetera, etcetera, right?’ the president continued.
Trump said he was currently negotiating with ’70 different countries.’
‘We’re negotiating, we’re showing great respect, but in the end, we may make deals, but either that or I just set a price and I say “here’s what you’re going to pay for the privilege of servicing the United States of America,”‘ Trump said.
There are some people out there that are insisting that I am overstating the seriousness of the crisis that we are facing.
Okay, let’s see what happens.
If a deal with China can be reached quickly, it is quite likely that the damage will be minimized.
I would be thrilled if that actually happens.
But if a deal with China cannot be reached quickly, we are going to experience a tremendous amount of pain.
Container traffic across the Pacific Ocean has already fallen dramatically, and the clock is ticking…
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
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