Shipping executives report a surge in volumes that will likely drive up rates, following a trade deal with China that has helped ease tensions with the U.S. However, uncertainty remains high, and when shipping is affected by uncertainty, it often results in increased costs.
How it started
In early April 2025, trade tensions between the United States and China reached a critical new high. The U.S. government imposed sweeping new tariffs reaching as high as 145% on a wide array of Chinese imports.
This bold move triggered an immediate and equally severe response from Beijing, which retaliated with tariffs of up to 125% on American goods. The tit-for-tat escalation severely disrupted trans-Pacific trade, sending shockwaves throughout global shipping and logistics networks.
World trade faces severe consequences
The immediate consequences were significant. According to Maersk, a major shipping company often viewed as a bellwether for global trade activity, container volumes between the U.S. and China plummeted by an estimated 30–40% in April alone.
This dramatic decline marked one of the steepest short-term drops in recent years. Supporting this observation, maritime analytics firm Sea-Intelligence noted an increase in “blank sailings” (scheduled sailings that were canceled) across Transpacific shipping lanes.
This disruption was not confined to U.S.-China lanes alone. It quickly had broader implications for global shipping. Research firm Drewry revised its forecast for global container port throughput, predicting a 1% decline for the second quarter of 2025. The firm attributed this dip directly to the collapse in cargo volumes between the world’s two largest economies.
The Port of Los Angeles experienced a drop of 30% in inbound shipments in early May, while the neighboring Port of Long Beach, which had set new volume records for 11 consecutive months, projected a sharp double-digit decline in shipments for May.
In China, the impact was similarly disruptive. Major export hubs reported congestion and falling activity, as Chinese exports to the U.S. dropped 21% year-on-year in April. The long-term consequences of this trade standoff alarmed industry leaders.
The World Shipping Council, representing global liner shipping interests, warned that tariffs combined with additional U.S. national security-related fees targeting Chinese vessels, would lead to increased shipping lead times and ultimately pass higher costs on to global consumers.
The 90-day tariff truce
Amid rising concerns from businesses and international stakeholders, a temporary relief came on May 12, 2025. After emergency negotiations, U.S. and Chinese officials jointly announced a 90-day truce. As part of this agreement, both countries agreed to suspend the majority of newly imposed tariffs. The United States rolled its duties back to a 30% baseline, while China reciprocated with a similar reduction, signaling a momentary de-escalation.
The announcement sparked an immediate surge in trade activity. Container-tracking firm Vizion reported that cargo bookings from China to the U.S. spiked by nearly 300% within days, fueled by pent-up demand and speculative restocking ahead of possible renewed tariffs once the truce expires.
US targets China’s shipping domination
Trade conflict between the US and China poses a new risk, latest Allianz report highlighted. Overall, US plans to address the dominance of China’s shipping and shipbuilding industries could have significant implications for the shipping sector, potentially impacting a number of areas from shipyard capacity to the future cost of repairs and new builds, in addition to forcing operators to weigh up reconfiguration of shipping schedules.
”There were 14,295 port calls made by Chinese vessels last year to 252 US ports, representing 18% of all port calls, according to Pole Star Global data. Vessels varied from containers to bulk carriers. Of these port calls, more than 3,000 Chinese-owned or built vessels visited US ports. Despite adjustments to the port fees proposal, the shipping sector remains concerned about potential cost increases and disruptions.”, Allianz noted.
Where we stand
Still, caution prevails among shipping analysts. While the short-term demand spike is encouraging, firms like Xeneta warn that the outlook remains uncertain, particularly for lower-margin goods still impacted by the 30% tariff rate.
Carriers are now adjusting their summer shipping strategies, but many experts argue that this reprieve may be short-lived unless a more durable agreement is reached.
While the future of US trade-focused policies remains uncertain, any further severe restrictions on trade could have several potential consequences including exerting stress on, and disrupting, supply chains, applying pressure to trade routes, as well as adding to accumulations on vessels or in ports, latest Safety & Shipping Review by Allianz noted. ”The ripple effect of increasing protectionism and tariffs threaten to remake supply chains and shake up established trade relations. ”, the report states.
