May 2025 - Economic Update [Legacy Content]

Current Signal
May 7, 2025
2 min read

SUPPLY

(Import Policy, Customs Enforcement, Supply Chain Disruptions & Shortages)

On April 2nd’s "Liberation Day” Trump announced tariffs on more than 50 different countries with the aim of “ending a policy of unilateral economic surrender” represented by the large trade deficits the US has with most of its trading partners. These trade deficits are a direct result of the fact that the US buys more goods from other countries than it sells to them, a natural byproduct of the loss of our manufacturing economy which the Trump administration hopes to restore by encouraging companies to increase domestic production and the sale of US manufactured goods.

The response to Liberation Day was broad. We saw:

A severe and swift negative reaction from the stock market.
Retaliatory tariffs from major trading partners like the EU
An escalation of the trade conflict with China which ended in a 145% tariff Chinese goods. The white house also announced an end to the de minimis exception which allowed low cost Chinese goods to be imported duty (tariff) free.

The Trump administration later announced a 90 day pause on the tariffs to allow time for negotiation, but excluded China from the exception.

The result?

The number of ships and containers bringing goods to the US has dropped significantly, and many containers are arriving only partially full. Popular direct to consumer based sellers in China like Aliexpress and Temu have raised prices and are now applying the 145% tariff to purchases made on their platforms.

Negotiations with China over tariffs continue to encounter roadblocks, and whether or not a deal is made, both government officials and business leaders expect shortages to impact store shelves soon, likely withing the next 4-7 weeks.

WHAT YOU CAN DO:

Don’t panic buy, plan. Understand which products your household uses regularly and buy enough to last at least 3 months.
- For critical or high use items, consider switching to reusable alternatives. Replace paper towels with dish towels, disposable diapers with cloth diapers, plastic straws with metal or silicone straws, etc.
In addition to canned goods, consider freezing fruits and vegetables for long term storage.

SOCIAL MEDIA SPOTLIGHT

Reddit / AmazonFBA - “174% tariff applied on a $47,000 shipment”

Reddit / Aliexpress (Order Estimate That Includes Tariffs) - “This is Insane”