NRF: Tariffs likely to keep import cargo levels elevated

A new report indicates that import levels at the nation’s major container ports are expected to remain high as retailers continue to bring in cargo ahead of announced tariffs on China and tariff threats against other countries.

The Global Port Tractor report recently released by the National Retail Federation (NRF) and Hackett Associates outlines price mitigation efforts in response to the announced and threatened tariffs by President Donald Trump. Supply chains are complex, according to Jonathan Gold, NRF supply chain and customs policy executive.

“Retailers continue to engage in diversification efforts,” Gold said. “Unfortunately, it takes significant time to move supply chains, even if you can find available capacity. While we support the need to address the fentanyl crisis at our borders, new tariffs on China and other countries will mean higher prices for American families. Retailers have engaged in mitigation strategies to minimize the potential impact of tariffs, including front-loading of some products, but that can lead to increased challenges because of added warehousing and related costs. We hope to resolve our outstanding border security issues as quickly as possible because there will be a significant impact on the economy if increased tariffs are maintained and expanded.”

Retailers front-loaded imports of key products for several months because of the potential for the East Coast/Gulf Coast port strike in January and to get ahead of potential tariffs. Trump announced tariffs of 25% on most goods from Canada and Mexico and 10% on goods from China. The Canadian and Mexican tariffs were suspended on Feb. 3 for 30 days, but the China tariffs took effect Feb. 4.

Hackett Associates Founder Ben Hackett said tariffs on Canada and Mexico would initially have minimal impact at ports because most imports from either country move by truck, rail or pipeline. In the long term, tariffs on goods that receive final manufacturing in Canada or Mexico but originate elsewhere could prompt an increase in direct U.S. maritime imports. Port cargo “could be badly hit” if tariffs on Asian and European nations increase prices and prompt consumers to buy less, he said.

“At this stage the situation is fluid, and it’s too early to know if the tariffs will be implemented, removed or further delayed,” Hackett said. “As such, our view of North American imports has not changed significantly for the next six months.”

U.S. ports covered by Global Port Tracker handled 2.14 million containers in December, although the Port of New York and New Jersey and the Port of Miami have yet to report final data. That was down 0.9% from November but up 14.4% year-over-year and would be the busiest December on record.

December brought 2024 to a total of 25.5 million containers, up 14.8% from 2023 and the highest level since the 2021 record of 25.8 million containers.

Ports have not yet reported January’s numbers, but Global Port Tracker projected the month at 2.11 million containers, up 7.8% year-over-year. February, traditionally the slowest month of the year because of Lunar New Year factory shutdowns in China, is forecast at 1.96 million containers, up 0.2% year over year. March is forecast at 2.14 million containers, up 11.1% year over year.

Retail analysts believe tariffs will be a hurdle for some retailers. Jefferies Analyst Cory Tarlowe said retail inventories were up 2% in the third quarter as more product came in ahead of the tariffs.

“A storm is brewing” in the retail sector as inventories are rising for the first time in two years,  Tarlowe said. “TJX is one of a few retailers that could benefit from tariffs, if retailers overbuy. Tariffs likely create meaningful supply chain dislocation, and Boot Barn, Steve Madden, and Sketchers have the most negative exposure.”