Shortages from China trade war will hit shelves in stages

Recent reports have highlighted the warnings of potential empty store shelves as CEOs of major retail stores in the U.S. expressed concerns to President Trump about the impact of a prolonged trade war on product shortages.

One key area to monitor for potential shortages is apparel and footwear, as a significant percentage of imports in these categories come from China. The high tariff rates imposed on Chinese imports have made it challenging for companies to maintain their supply chain, leading to canceled orders and potential product shortages.

Experts suggest that low-cost, fast-moving goods will be the first to disappear from shelves, including items like toys, games, budget home goods, and apparel. The impact of the trade war on the supply chain will depend on the duration of high tariffs and the ability of companies to adjust their sourcing strategies.

Key Points to Note:

• Apparel and footwear imports from China account for a significant portion of U.S. imports in these categories.
• The high tariff rates on Chinese imports have disrupted the supply chain, leading to canceled orders and potential product shortages.
• Low-margin, fast-moving goods are expected to disappear first from shelves in the event of persistent high tariffs.
• Experts recommend monitoring port container volumes in the coming months to assess the health of the supply chain.
• Small businesses and retailers are likely to face inventory challenges and price increases due to the trade war.