The worst is yet to come: Trump's tariffs could mean even higher prices and empty shelves within weeks

• President Donald Trump's tariff strategy is already causing price hikes and supply chain snarls.
• Logistics experts and shipping industry insiders told BI the effects are only going to intensify.
• Consumers can expect inflation, stock shortages, and higher unemployment, the experts said.

President Donald Trump's tariffs are already wreaking havoc on the supply chain, and several experts believe it could get worse.

Business Insider spoke with nine supply chain researchers, shipping industry insiders, and logistics specialists about the timeline for when consumers might expect to see the most significant effects of Trump's aggressive trade policy, should he maintain his current strategy.

They agreed that, in the coming weeks, Americans can expect major disruptions to the prices and availability of goods — store shelves may be emptier, prices will rise, and some products will run out sooner than others.

And if things continue on the current trajectory, four of them said, by the end of the year, those effects could be compounded, leading to higher domestic unemployment rates, global market instability, and increased geopolitical tensions.

Shipping rates are already down

Bookings of ocean freight shipments have been down significantly in the weeks since Trump's sweeping tariffs took effect. Though on April 9, the president paused his higher tariffs on goods from many countries for 90 days, his 10% baseline tariff on all countries remains in effect, as does his 145% tariff on imported Chinese goods.

During the first week of April, following Trump's initial April 2 tariff announcement, ocean freight container bookings saw a sharp global decline of nearly 50%, according to data from the digital logistics company, Vizion. Specifically, imports into the US fell 64% compared to the previous week, including imports from China to the US, which dropped 36%. Exports out of the US also dropped 30%, according to Vizion data.

In the following weeks, that nosedive continued in what Vizion has called a "tariff shockwave." For the week of April 14, ocean freight container bookings showed that overall US imports declined 12% week over week, and imports to the US from China declined 22% week over week, Vizion data shows.

"This is a big deal," Bob Ferrari, a supply chain executive and managing director of the Ferrari Consulting and Research Group, told Business Insider of the changes in shipping volume. "It has a lot of ramifications because it's something that the system is not equipped to deal with, and businesses are not equipped to deal with. It has a lot of far-reaching implications."

Front-loaded inventory is running low

Before Trump took office, let alone announced or implemented his tariffs plan, many major companies brought in extra inventory of products to the US in an attempt to mitigate the impact of potential tariffs, multiple supply chain experts told Business Insider. Trump implemented tariffs on countries including Mexico, Canada, and China during his first term and made tariffs a central part of his reelection campaign.

"I would say between one and three months of inventory, they tried to bring in early," Lisa Anderson, a supply chain expert and president of LMA Consulting, said.

But that buffer will run out — and soon.

With the tariffs against China currently at 145%, many companies have been forced to cancel their shipments of new stock and are in a holding pattern trying to wait out Trump's 90-day tariff pause to see what changes come next before placing big orders, Chris Tang, a University of California, Los Angeles professor who's an expert in global supply chain management and the impact of regulatory policies, told Business Insider.

"Right now, they're canceling orders, so the inventory will be running low, " Tang said of businesses. "And once they sell off this inventory, then it's either higher prices or no products."

According to data from supply chain research and analysis firm Sea Intelligence, canceled bookings of container shipments from Asia to both coasts of the US over the next few weeks are increasing drastically, in what the company calls a "quite extreme" scenario.

Multiple supply chain analysts told Business Insider that, in a normal business cycle, June through August is when end-of-year imports, like back-to-school supplies, fall products, and holiday merchandise, arrive in US ports. But the decreased volume of shipments and increased cancellations of shipment bookings that the industry is already seeing indicate that the normal cycle could be significantly disrupted, they said.

"There may be short-term stockouts, particularly in retail," Sean Henry, founder and CEO of the logistics startup Stord, told Business Insider. "And with brands streamlining their product lines, there will be a tighter selection of products in certain categories."

Ryan Petersen, the founder and CEO of Flexport, told Business Insider that if Trump makes a deal to lower the tariffs in time to bring back shipping bookings before inventory completely runs out, there will be minimal impact on consumers.

"But if there's no deal, then yes, there will be big shortages," Petersen said. "Probably worse than anything we've seen in our lifetimes."

Trump told Time on April 22 that he believes seeing tariffs as high as 50% in the next year would be a "total victory."

The 'bullwhip effect'

If the shortages start, further price hikes would be close behind, Ferrari said. Low-margin products that companies don't make a lot of money from — like toys, apparel, holiday items, and home goods — could see shortages and price hikes sooner than others, Ferrari said.

The exact date when Americans could start seeing the effects of those product shortages depends on how much pre-inventory companies have loaded up, Ferrari said, but added that consumers could see some price hikes as early as May or June.

"But once that occurs, then it'll be cascading," he added. Appliances and electronics could see the next round of price hikes and possible shortages starting in July or August, Ferrari said. And despite Trump's exemption of some electronic devices from tariffs, not every component of every device is included in that exemption, so Ferrari expects those to be affected as well.

Higher prices could then decrease consumer buying habits through major spending seasons, exacerbating the negative effects on the economy, Nick Vyas, the founding director of USC Marshall's Randall R. Kendrick Global Supply Chain Institute, told Business Insider.

"Imagine a mom, if her budget for back to school is exposed to 50%, 60% even 70% inflation, they will not be able to expand their budget to absorb that," Vyas said. "She will just say, 'Hey, if I was going to buy 10 things, now I'm only going to buy five things.' So that actually creates less demand, which creates consumer spending degradation. And all of a sudden, you start to see economic activity slow down, and this creates what we call in supply chain the bullwhip effect."

If consumers choose not to go out and spend money due to increased prices, demand decreases, Vyas said. Then, when all the backlogged supply that had been deferred and delayed in hopes that the trade environment would stabilize hits the market, there'll be no one interested in buying it.

"All of a sudden, now you have an imbalance between supply and demand," Vyas said. "And this becomes really the sort of crisis that we dealt with initially in COVID times, which was not pretty, where we had nothing, then too much of something, then nothing, then too much. When you go back and forth like that, the bullwhip is really bad for the market. It's bad for the industry. It's bad for retailers — for everybody."

The potential impacts in the long run

The longer it takes to work out a trade deal with China that lowers tariffs, the worse things could get for everyday Americans four supply chain analysts told Business Insider.

Margaret Kidd, an instructional associate professor of supply chain and logistics technology at the University of Houston, told Business Insider that the volatility of Trump's tariff policy is being compounded by numerous trade negotiations, the ongoing trade war with China, and potential new tariffs on pharmaceuticals, truck imports, and even Chinese ships.

"In the end, American consumers bear the brunt and become the downside partners of President Trump's tariff policies," Kidd said. "His approach could soon earn him the title of 'The President Who Canceled Christmas.'"

A continued trade war also has the potential to hurt US businesses.

Petersen told Business Insider the impact of decreased freight bookings "is already being felt."

"American companies are importing these goods, and if they have to cancel their bookings, their business is really suffering," Petersen said.

That means small and medium-sized businesses could close up shop for good, and hundreds of thousands of jobs could be lost across the retail, shipping, and logistics industries.

The Budget Lab at Yale on April 15 estimated that, if Trump's tariff strategy continues without deals, the US unemployment rate could increase by 0.6 percentage points by the end of 2025, and there could be 770,000 fewer people on payrolls.

And the international repercussions could be even more significant, Vyas and Tang said.

"If not managed properly, this could create a huge risk and drag the global economy into a tailspin," Vyas said. "And it would be a very difficult shock for us to absorb as a society, because the recovery process and the global trade world order could really go into disarray, which is actually contrary to what he's trying to accomplish."

In just a short period of time, Tang said Trump's current trade strategy could erode decades of relationship-building with our existing trade partners like Canada and Mexico. Vyas said that tension could drive our allies to create their own trade routes with China — the exact opposite effect of Trump's goals.

But Vyas said his biggest concern is the potential geopolitical conflict that could arise out of the trade war.

Still, he said he's optimistic that Trump will use the 90-day pause to strike a deal with many countries, including China, to lower their tariff rate and avoid the worst of the possible outcomes.

"Because what is alternative? If we ratchet up the continued pressure on China, we create the huge destruction of the global economy, to the point that it's as bad as the Great Depression of 1928 or something even bigger than that," Vyas said. "So then, when you think from that standpoint, I would say, why not be optimistic, because the alternatives are not that pretty."