Tariffs, consumer spending playing outsized role in SC Ports’ cargo forecast

MOUNT PLEASANT — It’s a simple economic reality: The number of cargo containers moving through the Port of Charleston closely mirrors growth — or declines — in consumer spending.

Not so simple is U.S. trade policy and President Donald Trump’s on-again, off-again tariff pronouncements.

That has the S.C. State Ports Authority looking at a wide-ranging forecast for cargo volumes in the coming fiscal year, which starts July 1.

“If we have a good sense of where durable goods spending will be in the coming months, we can estimate what pier container volumes look like,” said Joey Von Nessen, a research economist with the Moore School of Business at the University of South Carolina.

Von Nessen, who presented his forecast Tuesday for the authority’s board of directors, said positive trends in spending will go head-to-head with erratic tariff policies over the coming 12 months.

Depending on which factor prevails, Von Nessen sees the number of pier containers moving through Charleston’s terminals ranging from a little more than 1.3 million on the low side and a maximum of 1.5 million in fiscal 2026.

For budgeting purposes, the authority’s board voted to split Von Nessen’s forecast in the middle, with the expectation of about 1.4 million pier containers — that is cargo boxes of all sizes — for the coming fiscal year.

That’s unchanged from the 1.4 million containers the port will see by the time the current fiscal year comes to a close at month’s end.

“With so much uncertainty in our industry and the broader market, we are anticipating mostly flat growth for FY26,” the authority said in a statement.

The past few months have seen stable or growing cargo volumes, and the authority expects a stronger summer as some shippers rush to get goods to market while tariffs are paused.

“The outlook is uncertain after that,” the authority said. “We plan to reevaluate our outlook in January and may reforecast then, depending on the broader market.”

Barbara Melvin, the ports authority’s president and CEO, said regardless of short-term economic situations “the port is a long-cycle business.”

“We are investing today to have the capacity to support our customers for decades to come,” she said.

Von Nessen said a surge in consumer spending during the pandemic years created an artificial bubble — boosted by stimulus dollars — that has largely deflated.

That means people are now in the mood to start buying again. They just might not have the means.

“It turns out we haven’t seen that much growth this year because of the impact of tariffs and changes in trade policy,” he said. “That’s had an impact on prices.”

The cumulative growth in U.S. prices has topped 25% since May 2025 while wages have increased at just a 20% clip during that time.

Tariffs will raise prices even more, “which can make it harder for consumers to continue to spend at current levels,” Von Nessen said.

“The primary headwind is the potential rebounding of inflation due to tariff activity,” he added. “That’s the No. 1 metric to watch.”

The National Retail Federation is forecasting higher inflation that will impact spending.

“Consumers are seeing their way through the uncertainty with trade policies, but expect the inflation associated with tariffs to be felt later this year,” Jack Kleinhenz, the federation’s chief economist, said in a statement. “Consumers remain very price sensitive, and those costs are likely to weigh heavily on consumer budgets.”

Charleston’s port, while impacted by national trends, will be somewhat buffered by population and economic growth in the Southeast, which is outpacing every other U.S. region.

It’s a key reason credit ratings firm S&P Global affirmed the authority’s A-plus rating while downgrading the U.S. port industry as a whole.

“Despite the back and forth and uncertainty that we’ve seen emerge in 2025, as we look ahead this does nothing to change our long-run bullishness on South Carolina and the Southeast,” Von Nessen said. “We have strong economic competitiveness in this region primarily because of the population growth that we’re seeing.”

The ports authority’s board also approved a $294 million capital plan for fiscal 2026 that will support completion of the Navy Base Intermodal Facility where cargo containers will be transferred between trucks and trains.

The budget also includes money for the second phase of the adjacent Leatherman Terminal in North Charleston and upgrades to Columbus Street Terminal in Charleston to alleviate flooding concerns.