Monday brought a double dose of bad news for anyone paying attention to trade flows, fiscal health, or the macro environment developers operate within. If you’re in real estate, you might not think shipping containers and federal deficits are your business. But they are—because both shape the cost of capital, the direction of demand, and the policies that frame the viability of every project we touch.

Let’s break down what happened.

Shipping Volumes Are Falling Fast—and the Drop Isn’t Cyclical

First, we got fresh data on inbound container traffic at America’s largest ports. And the numbers are ugly.

Veteran shipping analyst John McCown reported a 7.9% year-over-year drop in container volume in June, the second consecutive monthly decline. That’s not just noise—this kind of sustained drop hasn’t been seen outside of full-blown crises like the 2008 financial meltdown or COVID lockdowns.

But this time is different. This isn’t a short-term contraction due to a credit shock or global health event. It’s the early impact of Trump’s escalating trade war.

McCown projects that a 25% reduction in U.S. container volume is “readily possible,” which would translate to a $510 billion hit to annual commerce. That’s not just a shipping story—that’s lost goods, lost contracts, and lost GDP.

For developers, this matters because global trade drives tenant demand. It shapes the outlook for industrial, retail, and even residential absorption in trade-dependent markets. And it has real implications for how we think about building near ports, distribution hubs, or in logistics-heavy metros like Savannah, Long Beach, Houston, or Charleston.

The GOP’s “Tax and Spend” Bill Will Widen the Deficit by $3.4 Trillion

The second headline came from the Congressional Budget Office, which released its formal estimate on the fiscal impact of the Republican tax-and-budget bill signed by Trump on July 4.

Their conclusion? The legislation will add $3.4 trillion to the federal deficit over the next decade and strip health care coverage from 10 million Americans by 2034.

The backstory: this bill effectively renews and expands the 2017 Trump tax cuts, which primarily benefit corporations and high-income households. To partially offset those benefits, the bill imposes sharp cuts to Medicaid. Trump has long insisted he wouldn’t touch Medicaid—but the CBO report makes clear that’s exactly what this bill does.

In a clear election-year calculation, Republicans delayed the Medicaid cuts until after the 2026 midterms, but the fiscal impact begins now. Rising deficits—especially in a high-rate environment—apply pressure to future Fed policy, Treasury yields, and long-term interest rate assumptions. For developers relying on steady inflation or rate normalization, that’s a dangerous curveball.

Why This Matters to Real Estate

If you’re underwriting deals today, none of this is abstract. Whether you’re in capital raising mode, structuring a build-to-rent community, or trying to pin down your exit cap, here’s what these headlines mean:

• Slowing imports could signal broader economic weakness—not just in trade but in consumption. Watch retail, hospitality, and last-mile logistics demand carefully.

• Rising deficits are likely to keep pressure on interest rates—making debt more expensive, equity harder to raise, and refinance scenarios riskier.

• Policy instability is increasing. The current environment favors projects that are nimble, flexible, and structured to weather political volatility.

We often talk about “uncertainty” as a buzzword. But today’s headlines are a reminder that it’s not just noise. Trade, taxes, deficits—these are foundational drivers of our economy. And if you’re not baking that into your investment thesis, you’re flying blind.

Daniel Kaufman is a real estate developer and investor with a national portfolio of multifamily, BTR, and mixed-use projects. He leads Kaufman Development, Oldivai, and Elevation Development. Follow him at www.danielkaufmanrealestate.com and on Substack @danielkaufmanre.