What the Deal Means

In late 2025, the U.S. and China struck a diplomatic agreement known as the “Busan Truce.” The deal offers temporary relief—but comes with a looming deadline. For Southern California retail, it touches everything from supply chain costs to Inland Empire logistics jobs.

Here’s the key structure: General trade duties dropped. Tariffs on Chinese semiconductors were delayed until June 2027. “Legacy” chips (the older technology found in most consumer goods) face 0% tariffs for 18 months. In return, China agreed to buy U.S. agricultural products and crack down on fentanyl precursor exports.

What This Means for Retail

Consumer electronics retailers get breathing room. Smartphones, laptops, and connected devices won’t see the price spikes many feared. That preserves spending in the category—and supports tenants who sell these products.

The 2027 Cliff Risk

But this truce creates a dangerous pattern.

Corporations know tariffs could snap back above 50% in mid-2027. The rational response? Stockpile now. Expect 2026 to be defined by massive inventory building as companies rush to import goods before potential tariffs hit.

This surge has local effects. The Ports of LA and Long Beach will stay busy. Inland Empire warehousing demand rises. Logistics jobs benefit in the near term. Retailers may carry heavier inventory, which strains working capital and cash flow.

The real risk comes later. If tariffs return in 2027, that stockpiled inventory creates a glut. Orders collapse. Logistics jobs disappear.

Action Steps

Don’t mistake tariff-driven activity for organic demand. Watch tenant inventory levels closely—excessive stockpiling today could signal working capital stress tomorrow.

Review your portfolio’s supply chain exposure with us.

(213) 880-8107 | francisco.williams@williamscap.ai | williamscapitaladvisors.com