Print

Global freight markets are navigating turbulent waters in the wake of escalating trade tensions between the United States and China, with container demand on the critical Trans-Pacific corridor falling sharply—yet freight rates proving more resilient than expected.

The market upheaval follows Washington’s imposition of a sweeping 145% tariff on Chinese imports, swiftly met by Beijing’s own retaliatory 125% levy. Initial reports suggest that demand for China–US ocean freight has plunged by 30% to 50%, disrupting established supply chains and casting a shadow over the near-term outlook.

Despite this sharp fall in demand, spot rates on Trans-Pacific routes have not collapsed. Industry observers credit this to proactive capacity management by carriers, who are curbing supply through extensive blank sailings and suspended services. Analysts estimate that 28% of capacity to the US West Coast and 42% to the East Coast will be withdrawn over the coming weeks, helping to support rate levels and maintain a relatively tight market.

At the same time, demand from Southeast Asia has been rising. Bookings from the region to the US are reported to have climbed by approximately 20% in recent weeks, as importers diversify sourcing away from China. This shift has prompted some carriers to redeploy idle tonnage to Southeast Asian origins, partially offsetting the volume shortfall from China.

The US government’s decision to temporarily suspend reciprocal tariffs on most trading partners except China for a 90-day period has triggered a front-loading spree. American importers are rushing to bring in goods ahead of the 9 July deadline, when the moratorium is set to expire. This pre-emptive strategy—compounded by elevated ordering in previous months—has left many buyers well-stocked in the short term.

However, if tariffs persist beyond the July cut-off, inventory buffers may erode quickly. Retailers could then face higher costs and potential stock shortages, particularly for consumer categories such as toys, baby products, and sporting goods—sectors that remain heavily dependent on Chinese manufacturing.

Read more on Freightos