Shippers Brace for Tariff Shockwaves as China-U.S. Cargo Rush Fades

The Chinese export front-loading rush, driven by fears of tariffs under U.S. President Donald Trump's policies, is diminishing, negatively impacting freight volumes and container rates along the China-U.S. trade route. This development is unfolding as shippers prepare for greater challenges following new tariffs. As of a recent announcement, the U.S. is imposing an additional 34% duty on Chinese imports, raising the average U.S. tariff on Chinese goods to about 65% according to a report by Nomura Holdings Inc. Despite expectations of a surge in shipping demand prior to the tariffs' implementation, activity remains subdued since a preemptive surge of cargo in late 2024 and January 2025 [para. 1][para. 2][para. 3][para. 4].

The effect of front-loading has cleared most of the trade backlog, with shippers adopting a "wait and see" approach. This is evidenced by consistently falling freight rates. Since early February, freight demand from Asia to North America has been weak, and the anticipated March rise in demand did not materialize. This slowdown has caused U.S.-bound container rates, which spiked briefly during contract negotiations, to decline again amid flagging demand [para. 4][para. 5][para. 6].

While the Shanghai Containerized Freight Index recorded a 5% increase on March 28, attributed to the onset of annual contract season, it is not reflective of any significant uptick in American import demand. In the first quarter of the year, container freight rates for Chinese exports dropped 28%, marking the steepest first-quarter decline in two decades according to international shipping association BIMCO [para. 6][para. 7][para. 8].

The flurry of U.S. container imports peaked in 2024, reaching 28.2 million twenty-foot equivalent units (TEUs), partially driven by frontloading amid impending tariff policies. This momentum extended into January 2025, with record imports of 2.49 million TEUs. However, the February figures showed a sharp decline of 10% from January, with shipments from China experiencing a 12.5% monthly and 10.6% yearly fall [para. 9][para. 10][para. 11].

The steep drop in cargo volumes has resulted in a collapse of U.S.-bound freight rates. For example, spot container rates from China to the U.S. West Coast dropped sharply from $5,000 per container in early January to $1,872 by March 21. Despite the reduced impact of tariffs on China, other Southeast Asian nations face greater challenges. Chinese exporters are increasingly using Latin America as a supportive trade hub, with seven Asian carriers initiating an Asia-to-Mexico express line and COSCO Shipping Corp. Ltd. expanding operations in Peru [para. 12][para. 13][para. 14][para. 15].

Trump's tariff policies also bring broader uncertainties, presenting complexities that are difficult to manage and cause logistics operators to face planning challenges. Markets in Southeast Asia, such as Vietnam and Thailand, have also been adversely affected by these tariffs. Nevertheless, China's manufacturing infrastructure remains critical globally, prompting discussions of "friendshoring," though few nations can match China's capabilities. As the new tariffs implementation date, April 9, approaches, a small window remains for negotiations on exemptions or lower rates [para. 16][para. 17][para. 18][para. 19][para. 20].

Due to the complexities and uncertainties involved, port officials, such as those in Los Angeles, predict reduced cargo volumes, potentially decreasing by up to 10% in the second half of the year. This underscores the significant adjustments still ahead for global trade and logistics industries [para. 21][para. 22].