US imports drop as tariff uncertainty takes toll on retailers

Imports to the United States fell more than anticipated in June, signalling the growing impact of shifting tariff policies and trade uncertainties. According to the National Retail Federation (NRF), US ports handled 1.96 million 20-foot equivalent units (TEUs) in June, marking an 8.4 per cent decline from the same month last year. While there was a slight increase of 0.7 per cent compared to May, the drop was sharper than expected, with NRF initially forecasting a modest rise for the month.

The downturn is attributed to the unpredictable nature of US trade policy, particularly under US President Donald Trump's administration. Several rounds of tariffs went into effect in early August, with duties now ranging from 10 per cent to 50 per cent on products from countries like India, Brazil, and Switzerland. The uncertainty around tariff adjustments has left retailers in a state of flux, with many grappling to predict holiday orders and manage inventory effectively.

Impact on retailers and the supply chain

Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy, highlighted that the tariff uncertainty is not only affecting retailers’ ability to forecast holiday shipments but is also expected to lead to higher prices for US consumers. With duties on a wide range of goods set to increase, consumers could face fewer choices on store shelves as supply chains become strained. Apparel retailers, including major brands like Under Armour and Deckers Outdoor, have already noted the impact of these tariff changes and are working to diversify their supply chains to minimise costs.

"We need binding trade agreements that open markets by lowering tariffs, not raising them," Gold toldReuters, adding that the tariffs are contributing to a slowdown in economic growth, reduced hiring, and diminished business investment.

Forecast for 2025: A decline in import volumes

Looking ahead, the NRF’s Global Port Tracker projects that US import volumes will end 2025 down 5.6 per cent compared to 2024. While this forecast remains preliminary, it underscores the broader impact that ongoing tariff hikes and the Trump administration’s trade policies are having on the nation’s supply chain. Lower import volumes mean fewer goods will make it to store shelves, exacerbating the challenges faced by small businesses in particular.

Ben Hackett, founder of Hackett Associates, pointed out that the volatility in tariff policies is causing widespread confusion among importers, exporters, and consumers. Many businesses have pulled forward imports in anticipation of tariff hikes, potentially leading to a sharp decline in trade volumes by late September. Hackett also noted that US exporters are facing growing challenges, with counter-tariffs from other nations leaving their products unsold.

The reduced import volumes are expected to continue through the rest of the year, with September through December forecasted to see significant year-over-year declines, in some months as much as 20 per cent. The overall import volume for 2025 is expected to fall to 24.1 million TEUs, a 5.6 per cent drop from the previous year’s 25.5 million TEUs. As businesses continue to navigate the unpredictable tariff landscape, both US consumers and businesses may face higher prices, fewer product choices, and strained supply chains in the months to come.