The Trump administration is officially terminating the "de minimis" exemption on import fees for international shipments under $800 — and it's about to kick prices and shortages up into high gear, warned Gene Seroka, executive director of the Port of Los Angeles, in a new interview on CNN Friday evening.
"Walk us through how big of a deal that will be for Americans, that exemption expiring?" asked anchor Jake Tapper.
"It is a big deal," said Seroka. "Millions of these parcels have been coming from China into the United States and it's a bit of a competition versus our overnight or next-day delivery. Maybe it takes a little bit longer, but the prices have been great, anything under that de minimis number, tax and tariff-free."
With that gone, he added, it's two and a half times pricier for the buyer.
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"Trump put those 145 percent tariffs on Chinese goods in early April," said Tapper. "Any cargo ships from China loaded after April 9th carried products — it's almost like they had the tariffs with them, carried products that the tariffs would affect, and they've mostly arrived here. Has there been a decline at the Port of Los Angeles in terms of container ships, and what are you expecting in terms of any sort of drop?"
"And that's where we find ourselves today," said Seroka. "Beginning next week, Jake, our business at the Port of Los Angeles on the import side will be down 35 percent year-over-year. Major American importers have said, 'I'm not buying any more with these elevated tariff levels, let's wait and see whether it's two hours, two weeks, or two months with this whipsaw effect of information coming out, I'm going to take a look at what policies can change and what talks will help alleviate this.' And what we're seeing also is that on the flip side, with the retaliatory tariffs, our agricultural products are getting walloped. Central Valley of California, Red River Valley area of North Dakota were not able to sell those ag products. In fact, Brazil sold more soybeans in the month of March to China than ever in their history."
"When will American consumers start to feel the direct impacts of these tariffs, beyond the effect on the stock market, of course, and what will those impacts look like?" asked Tapper. "Are we talking prices shooting up 50 percent, we talking empty shelves, what should we prepare for ourselves for?"
"Jake, retailers are telling me that they've got about four to six weeks of normal inventory levels remaining, and that's with the big guys who brought a lot of extra product in to pad those and bring the cost down," said Seroka. "So, four to six weeks left, then after that, if no trade accord or framework is reached, you'll likely see spot shortages, and for those products in demand, the prices will go up. If you're looking for that blue shirt and it's not the right size or the right style that you want, but you've got 11 purple ones, that blue shirt's price is going to be elevated just based on quantity that's available."
Watch the video below or at the link here.