Abandoned loads reveal the chaos of the tariff war

Tariffs up to 125% push companies on the brink of bankruptcy, forcing the rejection of ports in ports and directly impacting the consumer’s pocket

Large and small companies have told CNBC that President Donald Trump’s last round of tariffs, aiming around countries around the world and increasing trade rates to higher levels in a century, can result in port cargo abandonment, as owners and CEOs with financial difficulties reject goods that can cause financial losses.

Rick Muskat, president of the family footwear retailer Deer Stags, which imports about two million shoes a year – with about 98% of his men’s and children’s shoes made in China and sold at Macy’s, Kohl’s, Jcpenney and Amazon – is among entrepreneurs who prepare to take exponentially higher import rates, but says financial loss and the financial loss and Division of the damage between your company and retailers will be difficult.

Its pairs of men’s shoes that cost $ 50 and the $ 35 children’s shoes for boys have risen from $ 80 to $ 65, respectively, after recent US trade war measures, with Deer Stags ready to pay a new tariff of over 104% over Chinese products, accumulated over previous tariffs.

Prior to tariff increases in 2025, his company paid a 6% fee on its shoes.

“Then the rates were increased by 10% twice, raising my rates to 26%. Last week, Trump added 34% and now the 50% charged today. All these rates raise my total rates to 110% over my leather shoes. My leather shoes now have a 120% rate. How do you get it?”

He estimates that the cost of shipping orders subject to new tariffs will increase from $ 60,000 to something between $ 600,000 and $ 1 million.

“The immediate problem is cash flow,” he said. “We have no capital to deal with it. There is only a pile of money and I pay for it, but that means I won’t pay for anything else. We’ll pay the tax because we have no choice.”

Musekat said he will not reject containers in Porto, which would force the supplier to accept the load back, but asked a factory to suspend shipments for a week or two to see how things unfold. Conversations with retailers are underway.

Other US importers are expected to abandon goods at ports, which may then return to the manufacturer or be auctioned or destroyed in the US.

On Wednesday, Trump added one more change to the unstable situation, stating that some countries, besides China, would take a 90-day break in tariff implementation, but new tariffs on China would increase to 125%. According to an estimate, more than half of the $ 2 billion in daily import tariffs to be charged by the US will be about Chinese products, and tariffs on these products will reach more than $ 1 billion per day.

“The main trend we have observed is that carriers are reluctant to accept their loads,” said Joseph Esteves, CEO of Maine Pointe, global supply chain consulting firm. “Many of these companies are financially leveraged. They don’t have working capital needs and have no cash. So they just can’t just take it and wait to see what happens. They have no liquidity to do that,” he said. Balance Sheets and cash levels were more sensitive to major cost changes, with the slowdown of consumer demand, “before all this nonsense,” he said. “All the CEOs we talked with seem to be just waiting. They are just not accepting right now.”

Currently, many companies are instructing their production units to postpone boarding and not boarding the load. If the goods arrive at Porto and cannot afford import rates, they will be retained in Porto and the company will be charged with costly retention fees.

For many importers, ‘there are no factories in the United States’

Bruce Kaminstein, an angel investor at the New York Angels and founder and former CEA of Casabella cleaning products company, knows the challenges of the manufacturing industry in China. Kaminstein was able to circumvent rates in the First Trade War with China, but warns that startups do not have the resources of large companies to support the capital crisis.

“The products will be left in containers because retailers will not accept them,” Kaminstein said.

For now, any cargo on the sea will not be subject to new tariffs. In an up-to-date guide on China’s tariffs, released by US customs on Tuesday, a “water clause” explained that loads that reach ports today or in the coming weeks will not be subject to tariffs, which will not be applied to any commodities that arrive until May 27.

But Kaminstein says it takes years for manufacturing supply chains to be established.

“A medium -sized household user, for example, makes $ 20 million. They have no capital to open a factory.… There are no companies, no factories out there that produce products for other brands,” he said. “This is the main point. If you have a great idea, where are you going to make it? There are no factories here in the United States making products for other brands.”

Mary Rollman, an organizational strategist and executive partnerships at KPMG US, said companies have better and more sophisticated analysis to assess the cost of moving a supply chain today, but added that it takes years to find and qualify a supplier.

“Companies need to evaluate the cost of restoring a supply chain,” said Rollman. “They will analyze concrete data on fixed costs, analyzing the workforce to verify that there are enough workers to meet demand. They also need to assess whether it is still economically viable to maintain production outside the US or migrate to other countries with lower rates because it is still cheaper than returning.”

The other option, she said, is to stay in the country where manufacturing currently takes place and has a new administration in four years, which can revoke tariffs.

“We use components everywhere,” said Kaminstein. “Very rarely products are made in one place. We are used to a global supply chain. At Casabella, we brought products from around the world and manufacture products in the United States.”

Small business management told CNBC in an email that Trump’s commercial plan will ultimately support US entrepreneurs.

In an email, a SBA spokesman wrote: “SBA totally supports President Trump’s efforts to restore fair trade, which will bring back jobs and revitalize the American industry, enabling entrepreneurs with equitable conditions to compete and win. Combined with the new SBA manufacturing initiative, including our effort to cut $ 100 billion in bureaucracy, this government will trigger a historical opportunity for small companies and workers. ”

Deer Stags’s “minimum margins” prevented from providing products in advance, and consumers may have to pay. Muskat says difficult negotiations with pricing retailers are underway.

“We had a conversation with a retailer who agreed to divide the increase, but did not believe it could increase the price. Most of the retail community is still trying to find out what to do,” he said. “It’s so fluid. How to plan? Hope is not a strategy, but most people expect Trump and Xi to talk. Both are talking hard, but that will be harmful to both countries.”

“Tariffs on goods consumers buy every day, such as clothing, or that cannot be grown here, such as coffee or bananas, have just tripled or more,” said Josh Teitelbaum, Akin’s senior consultant. “We must expect this to have repercussions on the economy.”

“It is important to remember that the new rates will be paid by American importers,” said Jon Gold, vice president of supply chain and customs policy of the National Retail Federation. “Although retailers try to mitigate as much as possible, unfortunately they will not be able to absorb all the costs. With some rates close to 50% and others above 100%, many retailers will be forced to increase prices. We encourage the government to quickly negotiate agreements with the countries with which we maintain business relations.”

With information from CNBC*