Trump's escalating tariffs threaten to reverse US import boom

By Lisa Baertlein

LOS ANGELES, April 10 (Reuters) - U.S. container imports rose 11% year over year in March, continuing this year's outsized monthly gains, but U.S. President Donald Trump's escalating tariffs are dimming the outlook for later this year, trade executives said.

U.S. seaport imports totaled 2,380,674 20-foot-equivalent units (TEUs) in March, the third-highest level recorded for the month, supply chain technology provider Descartes DSG.TO said on Thursday.

China accounted for nearly one-third of overall import volume in March. That volume rose 9.4% year-on-year, as front-loading by tariff-avoiding importers continued to fuel this year's near-record monthly import gains.

Still, trade with China - the top U.S. maritime trading partner - is softening. Volume fell 12.6% from February to March, after the Trump administration imposed 10% tariffs on China-made goods in February and an additional 10% tariff in March.

"Global supply chains are facing significant challenges, in particular from the volatility associated with widening U.S. tariffs and retaliatory measures from key trading partners," Jackson Wood, Descartes' director of industry strategy, said.

Trump fueled such concern on Wednesday, ratcheting up additional duties on the world's biggest export nation to 125% from 104% in response to China's push back on tariffs. At the same time, Trump put a 90-day hold on "reciprocal" tariffs on other countries above the blanket rate of 10%.

Moments before Trump's tariff adjustments on Wednesday, the National Retail Federation (NRF) and Hackett Associates forecast containerized import cargo volume would drop at least 20% year-over-year in the second half of 2025. They declined to revise their forecast.

"Trump blinked, but the damage isn't all undone," UBS chief strategist Bhanu Baweja wrote in a client note.

U.S. companies, ranging from retailer Walmart WMT.N to automaker Ford F.N, rely on China and other key nations to keep store shelves stocked and factories supplied with parts.

Investors and forecasters consider imports a gauge of U.S. economic health. Some major banks have warned that Trump's far-reaching trade war raises the risk of a U.S. recession. That's because tariffs can stoke inflation, which can depress consumer and corporate spending that underpins growth.

Consumers face an overall average effective tariff rate of 25.3%, the highest since 1909, according to the Yale Budget Lab.

"This is only slightly different from where the effective rate was before the late-April 9 announcement," it said, adding that even after consumption shifts, the average tariff rate will be 18.1%, the highest since 1934.

Gene Seroka, executive director of the busiest U.S. seaport and a key China import gateway, joined a chorus of executives warning that the U.S. trade war could choke imports. He said tariffs could cause volume at the Port of Los Angeles to fall 10% or more in the second half of this year compared to 2024.

"A continued trade war will impact the global economy," Port of Long Beach CEO Mario Cordero said.