No, it’s not over

It feels like the tariff war has been dragging on for years, but sadly it’s only been five months. Remember way back in April, when “Liberation Day” set off a sh_tstorm, but then Scott Bessent and Howard Lutnick sent Peter Navarro out to buy some Doritos, and while he was gone they convinced Trump to cancel the Liberation and lower tariffs from insane levels to merely “wut?” levels?

Good times, and thank goodness that’s all behind us. Remember the talk about empty shelves and increasing prices? We dodged that bullet!

Perhaps not. One of my favourite economic sites is The Real Economy Blog, which has the added benefit of being free. Yesterday they reported on the slowing of traffic at the Port of Los Angeles, the entry point of all goods coming from the Asia-Pacific economies to the USA. Here’s the link to their reporting. I have no frame of reference, but the statistic that there are now a record 710,000 empty containers sitting on the docks, and that number has been growing in the first four months of 2025 is concerning. The nature of container shipping is that once the imports are offloaded, the containers are filled with exports, they’re shipped, and they’re no longer on the dock.

The fact that few items are shipping from the USA is of course worrying, but if the containers are sitting on the dock of the bay (well, the dock of L.A., but it sounds better), then they’re not in other ports, where they can be used to ship. Scarcity drives up costs for exporters in Asia, which will eventually be passed on to consumers in the USA, no matter what the Trump administration says.

The blog estimates that the impact of this decline in imports and increased costs will hit the US economy in mid-July. I guess we don’t have long to find out.