Trump says that ports running empty is a "good thing"
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President Trump called the slowdown at U.S. ports in the wake of his tariffs on China going into effect a "good thing."
Why it matters: West Coast ports warn of plunging cargo volume, with likely far-reaching economic effects in the weeks and months ahead.
Driving the news: Trump falsely suggested that the dock slowdown is a positive sign for the U.S. economy.
- "We're seeing as a result that ports here in the US, the traffic has really slowed and now thousands of dockworkers and truck drivers are worried about their jobs," one reporter said in the Oval Office on Thursday.
- "That means we lose less money ... when you say it slowed down, that's a good thing, not a bad thing," Trump replied.
- Trump's tariffs threaten a recession and the destruction of supply chains.
What they're saying: Trump asserted that "China was making over a trillion," without it being immediately clear what he was referring to.
- "From 500 billion to 1.1 trillion… frankly if we didn't do business we would've been better off," he said.
- China says it sent around 15% of its exports, worth $525 billion, to the U.S. last year — about 3x what flowed in the opposite direction. (U.S. data differs on the total value by nearly $100 billion, but the ratios are about the same.)
- "We'd like to see China opened up so we can compete in China and give people something that they've never had – access to something that would be great for the world, great for the businesses, and great for friendship," Trump said.
State of play: Trump's tariffs have led to slowdowns at vital U.S. shipping hubs.
- The tariff shock is likely to ripple through the economy, eventually hitting domestic transportation and warehousing, employment, as well as the price and availability of goods on shelves, Axios' Courtenay Brown and Neil Irwin wrote this week.
- Plunging container volume, especially from China — on which 145% tariffs are in place — means fewer hours for dockworkers, which could quickly cause less demand for the trucks and rails that transport the cargo.
According to a press release last month from freight forwarder Flexport, ocean carriers are "withdrawing capacity" for transpacific eastbound trade at faster rates than they were during the pandemic.
- Flexport also said there was an increase in "blanking" – cancelled scheduled sailings. It said blank sailings almost doubled between the weeks beginning on April 13 and April 20, and that more than 25% of weekly service loops have already been canceled for late April and early May.
- "It's a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs," Gene Seroka, executive director of the Port of Los Angeles, told CNBC in April. He expected a 35% drop in incoming cargo volume for the first week in May.
