Things To Come?

The CEOs of Walmart, Target, Home Depot and Lowe’s Warn That Store Shelves All Over America Could “Soon Be Empty”

Michael

On Tuesday, the CEOs of Walmart, Target, Home Depot and Lowe’s specifically warned President Trump that store shelves all over the country could “soon be empty” during a meeting at the White House…

The CEOs of Walmart, Target, Home Depot and Lowe’s, all of whom delivered a blunt message about interruptions in the supply chain and its effects on consumers, were invited to the White House as part of an ongoing internal campaign to make the case to Trump about the real-world impact of his policies, administration officials said.

Trump’s tariffs have placed significant pressure on the retail sector. The business leaders warned that store shelves across America could “soon be empty,” two people familiar with the meeting said, as they presented a dire economic picture that could come into sharper view within weeks.

Our biggest retailers normally import massive amounts of goods from China, and there is no easy short-term way to replace that production.

According to Axios, the CEOs “flat out told him [Trump] the prices aren’t going up, they’re steady right now, but they will go up”.  They also told President Trump that “shelves will be empty” if current tariff levels persist.

The CEO of Walmart reportedly told President Trump that his supply chains are already being disrupted…

Doug McMillon, the CEO of Walmart who has developed a cordial relationship with Trump through meetings at Mar-a-Lago and several mutual friends, bluntly told Trump that the trade war with China had already started to disrupt the supply chain, officials said, and would only intensify by summer.

We should have never become so dependent on imports from China.

I have been ranting about this for years.

Now we find ourselves in a situation where our economy literally cannot function properly without Chinese-made goods.

According to Zero Hedge, scheduled import volumes at the Port of Los Angeles are beginning to plummet dramatically…

The Trump administration is likely monitoring sliding scheduled import volumes at the Port of Los Angeles—the largest container port in the Western Hemisphere—amid President Trump’s overnight remarks hinting at a potential de-escalation in the trade war with China. The president’s comments to ease trade tensions with Beijing come as scheduled import volumes at the LA Port indicate possible inbound trade disruptions on the horizon.

According to Port Optimizer, a tracking system for vessel operators, scheduled import volumes for the LA Port for the week ending May 3 show a 38.53% week-over-week plunge. Year-over-year, the data shows a 9.79% decrease. For the week ending May 10, scheduled import volumes continued to slow, with a year-over-year change down around 35%.

One industry insider warned CNBC that more than 700,000 truckloads “have evaporated nationally” in just the last week…

The fallout from the ocean freight slowdown is beginning to hit ground transport linked to ports.

“We are at a tipping point on the West Coast,” said Ken Adamo, chief of analytics at DAT Freight & Analytics. “Looking at how many truck loads are available versus trucks, we’ve seen a precipitous drop, over 700,000 loads have evaporated nationally in the past week compared to two weeks prior,” he said.

And the outlook for the weeks ahead is even more troubling.  We are being told that “ocean container bookings from China to the United States are down over 60%”…

In the 3 weeks since the tariffs took effect, ocean container bookings from China to the United States are down over 60% industry wide.

But there is some good news.

After his meeting with the retail CEOs, President Trump told the press that tariffs on Chinese imports will “come down substantially” and that we “are going to have a fair deal with China”…

Mr Trump told reporters late on Tuesday that levies on China would “come down substantially”.

“We are going to have a fair deal with China,” the president told reporters on Wednesday, without addressing the report.

The suggestion that tariffs could be halved sent stocks soaring on Wall Street, with the tech-heavy Nasdaq stock index up as much as 4pc at one point

Unfortunately, this is not going to happen right away.

According to White House Press Secretary Karoline Leavitt, it is still the position of the Trump administration that there will be “no unilateral reduction in tariffs against China”…

White House press secretary Karoline Leavitt on Wednesday said on Fox News there will be “no unilateral reduction in tariffs against China.”

“The president has made it clear China needs to make a deal with the United States of America, and we are optimistic that will happen,” Leavitt said. “And when that continues, it will be up to the president what the tariff rate on China will be.”

What this means is that the tariffs will remain where they are until a deal with China is reached.

At least the Chinese are willing to talk.  In fact, a top Chinese official just declared that “our doors are wide open”…

China said “our doors are wide open” for talks after President Donald Trump softened his tone on the unfolding trade war between the world’s two largest economies.

Guo Jiakun, China’s foreign ministry spokesperson, made the comments at a press briefing on Wednesday, according to Chinese state media.

That is a promising sign.

But the Trump administration has no intention of going back to the way that things were before.  According to U.S. Treasury Secretary Scott Bessent, the Trump administration is seeking a deal that will fundamentally rebalance trade between the United States and China…

“Recent data shows the Chinese economy tilting even further away from consumption toward manufacturing. China’s economic system, with growth driven by manufacturing exports, will continue to create even more serious imbalances with its trading partners if the status quo is allowed to continue,” he said.

“China’s current economic model is built on exporting its way out of its economic troubles. It’s an unsustainable model that is not only harming China, but the entire world,” Bessent said. “China needs to change. The country knows it needs to change. Everyone knows it needs to change, and we want to help it change, because we need rebalancing too.”

Negotiating such a deal with the Chinese will not be easy at all.

And even if a deal is eventually reached, President Trump is warning that tariffs on Chinese goods “won’t be zero”…

Trump yesterday said the current tariff is ‘very high, and it won’t be that high. … No, it won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.’

The bottom line is that Chinese goods will never be more affordable than they are right now.

And until a deal with China is reached, many Chinese goods may not be available at all.

So you might want to stock up while it is still possible to do so.