(End of the American Dream)—It would be difficult to overstate the seriousness of the crisis that we are facing. Just about every single industry in the United States is extremely dependent on imports from China, and now trade with China is essentially coming to a standstill. I wish that I was exaggerating, but I am not. According to the World Trade Organization, trade between the United States and China could decline by as much as 80 percent…
The World Trade Organization has warned that goods traded between the US and China could decrease by as much as 80%, backing US Treasury Secretary Scott Bessent’s description of the current situation as essentially a trade embargo.
Unless something changes, this is going to be the biggest shock to our economy in decades.
At the moment, our stores are filled with products that are manufactured in factories in China.
But now many of those factories have become eerily quiet…
“I know several factories that have told half of their employees to go home for a few weeks and stopped most of their production,” said Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions. He said factories making toys, sporting goods and low-cost dollar store-type goods are the most affected right now.
“While not large-scale yet, it is happening in the key [export] hubs of Yiwu and Dongguan and there is concern that it will grow,” Johnson said. “There is a hope that tariffs will be lowered so orders can resume, but in the meantime companies are furloughing employees and idling some production.”
We are also witnessing an unprecedented decline in cargo shipments from China to the United States.
Port of Los Angeles Executive Director Gene Seroka is telling us that “essentially all shipments out of China for major retailers and manufacturers have ceased”…
President Donald Trump’s trade war policies are expected to bring about a 35% decline in cargo arriving at the Port of Los Angeles by next week as “essentially all shipments out of China for major retailers and manufacturers have ceased,” according to Port of Los Angeles Executive Director Gene Seroka.
The good news is that major retailers still have Chinese-made goods that they previously purchased to sell to us.
But as they work through their existing inventory levels, pretty soon we are going to start seeing empty shelves.
In fact, the chief economic advisor to President Trump during his first term is openly warning that we could start experiencing significant shortages in late May…
American consumers are just weeks away from feeling the effects of President Donald Trump’s tariffs at the cash register, Gary Cohn, Trump’s chief economic advisor during his first term, said.
In a CBS interview, Cohn forecast that the consequences of newly imposed tariffs on China will start rippling through the US economy by late May.
“The cycle from a good being sold in China, loaded on a vessel, sailed across the ocean, unloaded in the United States, put in a factory, and distributed to a shelf is about eight weeks in the United States,” he told “Face the Nation” on Sunday.
Torsten Slok, the chief economist at Apollo Global Management, is also pointing to next month as the time when we will begin seeing “empty shelves in US stores” and “Covid-like shortages for consumers”…
The economic impact of the tariffs imposed by the Trump administration will soon become apparent to everyday Americans and lead to a recession this summer, according to Apollo Global Management.
Torsten Slok, chief economist at Apollo, laid out a timeline in a presentation for clients that showed when the impact of tariffs announced by President Donald Trump could hit the U.S. economy. Based on the transport time required for goods from China, U.S. consumers could start to notice trade-related shortages in their local stores next month, according to the presentation.
“The consequence will be empty shelves in US stores in a few weeks and Covid-like shortages for consumers and for firms using Chinese products as intermediate goods,” Slok wrote in a note to clients Friday.
In his note, Slok went on to warn that unless something changes it is likely that we will soon see substantial layoffs in the trucking and retail industries.
Approximately 80 percent of our toys are normally made in China, and so that is one industry that will be absolutely monkey-hammered if things do not change…
The tariffs are expected to hit small businesses especially hard. Toy retailers, for example, are already struggling with a 145% tariff on goods they normally order for the holiday season. Many are either scaling back orders or facing potential closures, Cohn said.
Last week, logistics experts and shipping industry insiders echoed similar concerns, telling Business Insider they expect major disruptions to the prices and availability of goods in the coming weeks.
Four even warned that unchecked supply-chain stress could trigger higher domestic unemployment, global market instability, and rising geopolitical tensions.
Whatever you think that you are going to need for the second half of this year, I would get it now while you still can.
The president of a company that supplies major retailers with holiday decorations is concerned that his business could be ruined if a trade deal is not worked out soon…
“The clock is absolutely ticking,” said Jim Gerson, president of The Gersons Companies, an 84-year-old supplier of holiday decorations and candles to major US retailers. The company, based in Olathe, Kansas, sources more than half its products from China and currently has about 250 containers waiting to be shipped.
“We have to get this worked out,” said Gerson, who’s part of the third generation from his family to run the company, which generates roughly $100 million in sales a year. “And hopefully very soon.”
He is right.
The clock is most certainly ticking, and more damage is being done with each passing day.
Unfortunately, it does not appear that a trade deal with China is anywhere on the horizon at this stage.
In fact, U.S. Treasury Secretary Scott Bessent is insisting that it is up to China to make the next move…
Treasury Secretary Scott Bessent on Monday put the responsibility for reaching a trade agreement on China.
“I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable,” Bessent said during an interview on CNBC’s “Squawk Box.”
A lot of products that are made in China have already disappeared from Amazon.
So let me offer a piece of advice.
I would recommend making a list of products that you normally purchase and products that you think that you will need in the months ahead.
If any of those products are made in China, I would purchase them immediately.
I do not think that we are going to see a trade deal with China any time soon, and that means that we are about to move into unprecedented territory.
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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Starting the Day With a Scripture-Inspired Roast Helps Center Your Thoughts on Eternal Truths Amid Temporal Pressures
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