• Economics
• North America

August 8, 2025, 3:12 PM View Comments ()

Remember the COVID-19-era shortages? Store shelves were stripped of toilet paper. Face masks were rationed. A global scarcity of semiconductors forced automakers and others to curtail production. Ford stashed unfinished Super Duty trucks in the Kentucky Speedway parking lot while waiting for crucial chips to arrive.

For a few months this year, it looked like Americans were in for another round of shortages, this time caused by U.S. President Donald Trump’s tariff war. But it appears that most products will continue to be available, albeit at higher prices (and with a few serious exceptions, which I’ll get to). That’s a rare bit of good news in a sea of bad news surrounding Trump’s tariffs, which are fraying long-standing commercial ties between the United States and its closest allies.

The latest round of tariffs went into effect on Aug. 7. Including both new and old levies, the rates are 50 percent on Brazil, 35 percent on Canada, and 25 percent on Mexico. The current rate on China, which briefly reached 145 percent earlier this year, is a still-high 55 percent under a negotiated truce between the world’s biggest economies. The high tariffs will raise costs for American consumers and businesses, while squeezing the economies of the United States’ trading partners.

What the tariffs probably won’t do is cause widespread shortages, and that matters a lot. No one likes to pay more for things, but it’s far more harmful to people and more damaging to the economy when products aren’t available at any price, as what happened during the global chip shortage that began before the pandemic and continued after it receded.

Shortages were a risk earlier this year. Sometimes it was because of hoarding by purchasers who wanted to stock up their inventories before tariffs increased prices. Other times it was the opposite: Some buyers bet that big tariff increases wouldn’t last so they held off on purchases, which left them dangerously low on supplies.

“I thought the risk of empty shelves back in April was very heightened,” said Anna Wong, chief U.S. economist of Bloomberg. Shipments from China to the Port of Los Angeles fell sharply that month as tariffs on Chinese goods leaped from 20 percent to 145 percent in a matter of days.

But when tariffs on China fell to 30 percent in May, shipments quickly rose above their normal pace to make up for lost time.

“Bottom line is the risk of empty shelves right now is significantly lower than back in April,” Wong said.

That’s borne out by comments from executives. In the U.S. Federal Reserve’s Beige Book, which compiles observations by local business contacts, people have complained about shortages of labor and housing, but not goods. There was one mention of shortages in May, when the Beige Book said, “Some manufacturers had concerns about the potential for shortages of imported goods given rising tariffs.” In the June report (which was released in July), that warning was gone. Tariffs appeared 74 times but only in the context of higher costs, not shortages.

Another reassuring data point: In a June manufacturing survey by the Institute for Supply Management, electronic components were the only product reported to be in short supply. The U.S. Census Bureau recently reported that business inventories for May are right in line with their recent average.

The apparent adequacy of supply actually makes sense. Shortages tend to occur when there are extreme changes in supply, demand, or both, which is not the case now. During the COVID-19 pandemic, there was a huge increase in demand for certain medical supplies and personal protective equipment. The chip shortage was mainly caused by multiple problems on the supply side of the equation, including a drought in Taiwan, a winter storm in Texas, and three plant fires in Japan. (It didn’t help that workers getting COVID-19 crimped production and people cooped up at home ordered chip-filled consumer electronics.)

There are no such dislocations this time around. In fact, higher prices, rather than being a warning sign of coming shortages, can actually help prevent them. That’s because price increases induce suppliers to sell more and induce consumers to buy less, helping eliminate any imbalances of supply and demand.

It helps when there are domestic suppliers that can pick up the slack when imports fall, which is the case with steel and aluminum, for example. The tariffs on raw steel and aluminum are harmful to the U.S. economy because they raise costs for the much bigger sector that uses the metals as inputs. But at least the domestic producers help ensure that supplies won’t run out.

That’s not to say there’s no risk of shortages. They are most likely to be in products such as generic drugs that have thin profit margins, according to Marta E. Wosińska, a senior fellow of economic studies at the Brookings Institution. In a March report, she noted that government price caps, including for Medicaid, prevent drug manufacturers from raising the prices of their products faster than inflation. That could induce some suppliers to exit the market for certain drugs altogether. She said that she’s particularly worried about the availability of imported generic chemotherapy drugs—a shortage that would be extremely damaging, as the 2023 shortage of carboplatin and cisplatin showed.

Outside of generic drugs, there could be some shortages of toys, shoes, and apparel because margins are so thin for those products that importers can’t afford to stockpile them, leaving them vulnerable to any type of supply interruption that may occur, Wong said. Trump braced Americans for that possibility in April when he said, “Maybe the children will have two dolls instead of 30 dolls.”

A renewed shortage of cancer drugs would be far more serious than empty shelves in a toy store. But amid the wider damage that Trump’s tariffs will cause to the United States and the world, American consumers can be glad that most goods will still be available.