Bloomberg ran an article on April 28th pointing out that we will likely see supply disruptions even if the trade war ends soon. As shown below, the number of cargo ships departing China for the U.S. is down roughly 40% from one month ago which may create difficulties because many retailers need to restock by the middle of May.
The World Trade Organization warns that goods traded between the U.S. and China could fall by as much as 80% should the current standoff continue. This is actually a critical time of the year for manufacturers and retailers because decisions are currently being made regarding orders to create sufficient inventory for the back-to-school and Christmas seasons. Some of the slack may be taken up by Cambodia, Thailand, Vietnam, and other exporting countries but the sheer magnitude of our trade with China suggests there may well be shortages of some products.
Interestingly, there are likely to be some logistical problems even if an agreement is reached soon because the freight industry has reduced capacity consistent with lower demand. A restart of trade will lead to a surge in activity which will stress ports as well as rail and trucking resources.
Of course, the ultimate impact of the Trade Wars is unknown but a recent survey of economists raised the probability of a recession to 50%. And, the University of Michigan Consumer Sentiment Survey found that inflation expectations for the next twelve months have increased from 2.8% to 6.5% since December.