Tariffs are disrupting freight volumes and cutting consumer purchasing power, says Yale economist. Learn how trucking, ports, and shipping are being affected—and why a new trade deal is critical.
🧭 Port Volume Declines as Tariff Pause Ends
Previously on a ten-month growth streak, the Port of Los Angeles recorded a 5% year-over-year drop in total throughput in May—down to 717,000 TEUs (twenty-foot equivalent units)—with a 19% monthly decline compared to April
Despite a temporary tariff pause that aligned shipments with year-ago levels until June 16, volume has since slumped, signaling deeper demand weakness.
💰 Economic Costs: Yale Breaks It Down
Ernie Tedeschi, Director of Economics at Yale’s Budget Lab, explains:
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Average U.S. tariff rates jumped ~12 percentage points in 2025, effectively raising consumer prices by 1.5%, costing American families around $2,500 annually (in 2024 dollars) freightwaves.com.
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Tariffs disproportionately burden lower-income households, with a 2.5% income squeeze versus 1% for higher earners freightwaves.com.
These inflationary pressures don’t always show up immediately—some consumer prices took three months to adjust after the 2018 washing machine tariffs
🚚 Freight Sector Feels the Squeeze
In trucking and intermodal:
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Truckload demand has dropped nearly 10% year-over-year, with more shipments shifting to intermodal due to cost and timing advantages
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Shippers are “pulling forward” shipments to beat prospective tariff hikes—a trend similar to prior trade battles.
Longer supply chains and less just-in-time inventory amplify the strain on logistics infrastructure.
🌐 Ocean Shipping & Trade Diversification
Ocean freight rates, especially on routes from Asia, have eased ~20% below 2024 highs—driven by excess capacity, alliance changes, and diminished frontloading
Meanwhile, firms are diversifying production out of China, shifting to Vietnam, India, Taiwan, and Mexico under the “China‑plus‑one” strategy.
🏗️ Industrial Sentiment & Manufacturing Outlook
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Homebuilding materials like lumber face rising costs due to potential tariffs, risking further inflation in housing.
Manufacturers continue to delay capital spending, citing tariff uncertainty and unclear policy direction.
✅ BOTTOM LINE
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Freight volumes and freight rates will remain volatile until a new U.S.–China trade agreement is signed.
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Watch for June–July inflation data, which could show delayed tariff effects on consumer prices.
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Logistics operators should prepare for intermittent demand and further supply chain redesigns.
