Flexport CEO Warns Trump's China Tariffs Could Cost US Economy $2 Trillion, Trigger Millions Of Layoffs

Ryan Petersen said ocean container bookings from China to the United States are down over 60% industry-wide after tariffs were imposed.

The U.S. economy could take a $2 trillion hit if the current U.S. tariffs on China are maintained, according to the chief of a tech-focused logistics firm.

In a series of posts on X, Ryan Petersen, the CEO of Flexiport, warned tens of thousands of American businesses could fail, and millions of people could be laid off due to President Donald Trump's trade war with China.

Petersen noted that Chinese imports to the U.S. are about $400 billion, and those goods sell at retail for nearly $2 trillion.

Flexport acquires space on ships, planes, and trucks and earns money based on the difference between its costs and the rates it charges customers.

The firm raked in $2.1 billion in revenue in 2024, according to a report by The Wall Street Journal.

"In the three weeks since the tariffs took effect, ocean container bookings from China to the United States are down over 60% industry-wide," Petersen said.

Bilateral trade between the U.S. and China — the two largest economies in the world — could hit a new low as both countries have imposed tariffs exceeding 100% on each other.

Earlier this week, Trump hinted that tariffs on Chinese goods would come down "substantially."

Petersen said that companies had stocked up on inventories in anticipation of the tariffs, and it would take a while before the shortages were felt. He added that if Trump reverses course soon, the worst could be avoided.

But he said there might be a "bullwhip scenario" if Trump eases tariffs and "all those canceled orders get rebooked," creating a "huge" surge.

With many ocean shipping services cut and vessels repositioned elsewhere, the current network might be unable to absorb the sudden spike in demand, Petersen said.

This mismatch, he added, could drive ocean freight prices sharply higher — potentially surpassing the surge seen in 2024 during the Red Sea disruptions and nearing the record highs of 2021–22, when container rates from China to the U.S. hit $20,000.

"We just need him (Trump) to act quickly to avoid creating insane surge pricing and COVID-level logistics bottlenecks as this bubble of cancelled orders gets rebooked," Petersen said.

The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, was up 0.2% in after-hours trading, while the SPDR S&P 500 ETF Trust (SPY) also rose 0.2%. 

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