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The Merchant · n°146 · May 15, 2025

Tariff deal triggers ex-China shipping surge

Figure of the week

8.1% According to Beijing, this was the jump in Chinese exports in April, a figure four times higher than analysts’ forecasts. However, exports to the United States fell by nearly 18% over the same period.

Quote of the week

“The United States will modify the application of the additional ad valorem duty on products from China.” Statement from the White House on Monday, May 12, effectively suspending the trade war between China and the United States.

Stable rates… but for how long?

The week of May 5 was marked by a surprising stability in ocean freight rates. This was notably the case on the major trade routes. According to Xeneta, both capacity and price levels remain unchanged. For its part, the Shanghai Containerized Freight Index (SCFI) recorded only a slight increase on trans-Pacific routes, with no impact on the market. Toward Northern Europe, the downward trend we mentioned last week even seems set to take hold. For many professionals, this lull is welcome after months of volatility.

But one should beware of stable rates just as much as still waters. This calm could be short-lived. The 90-day suspension of the tariff war between the United States and China, which will take effect from May 14, could trigger a temporary surge in trade volumes. Indeed, the colossal cuts in tariffs create a window of opportunity for exporters, in a general climate of uncertainty. For Peter Sand, chief analyst at Xeneta, “shippers will take advantage of this reprieve to ship as much as possible.” Despite the caution shown by many professionals, this could quickly drive rates up.

According to Lars Jensen, CEO of Vespucci Maritime, this rush for Chinese goods could also cause congestion in US ports within three to six weeks - a phenomenon already widespread in European ports. In Antwerp, ships wait an average of four days; in Le Havre, five. While some trans-Atlantic lines are already fully booked through June, significant peak season surcharges are expected in the coming weeks toward the United States.

The commercial and geopolitical situations are more closely linked than ever - and they will affect rates in the weeks to come.

Deals that are just for show?

Deals as if it were raining them… The past week was marked by a flurry of agreements involving the United States.

The most notable is of course the 90-day tariff truce reached with China. The terms were clarified on Monday, May 12. The two countries announced they would massively reduce their reciprocal duties: 30% on the American side (down from 145% previously) and 10% on the Chinese side (down from 125%). While trade was almost frozen, this easing is well received: as stocks were piling up in Chinese ports, trade should quickly pick up again. The most obvious sign of recovery comes from e-commerce, whose freight capacity jumped by 60% in 24 hours.

Two days earlier, Washington announced the signing of a bilateral agreement with Great Britain on automobiles and steel. The 27.5% tariff that weighed on British cars is lowered to 10% for the first 100,000 vehicles imported each year. For their part, Great Britain is scrapping a 20% duty on American beef. For Adrian Mardell, CEO of Jaguar Land Rover (JLR), the main beneficiary of the agreement, this deal should “save 250,000 direct and indirect jobs” in the United Kingdom. American enthusiasts will nonetheless continue to pay about 7.5% more for their British cars than in March.

Finally, an unexpected diplomatic breakthrough came from Yemen. The United States and the Houthis announced a ceasefire after seven weeks of intense American strikes. The details remain very unclear, however, with Washington claiming that the Houthis had “capitulated,” while the latter speak of an “American withdrawal.” What an atmosphere… The agreement also excludes any commitment regarding Israel, where it was very poorly received. Observers remain cautious about this de-escalation in the Red Sea: according to EOS Risk Group, the impact on trade routes will be minimal in the immediate term. And Maersk has already announced that it will continue to bypass this route.

So what to make of this cascade of deals? They could smooth out certain trade flows, but there is no guarantee the effects will be lasting. After the last two months, geopolitical and commercial uncertainty remains the rule: with the exception of the British case, all the agreements are temporary. Jack Kennedy, head of Middle East and North Africa risk analysis at S&P Global Market Intelligence, says nothing different: “this is a pragmatic de-escalation, not a path to lasting peace.”

Toward a marginalization of the trans-Pacific axis?

The temporary suspension of the tariff war between Washington and Beijing does not solve everything, and air freight between China and the United States remains under strain. The end of the de minimis exemption led to the cancellation of about 40 daily cargo flights between China and the United States: this represents a 40% drop in capacity on this axis! This scarcity of supply and the temporary reduction of tariffs - and of de minimis - could drive up prices on this axis. Carriers are indeed expecting a sharp rise in demand in the short term, especially since Chinese exporters will seek to ship a lot before the end of the 90-day deadline.

In a context that remains highly tense, Europe appears as a strategic relief valve for the carriers. The China-Europe corridor is seeing a redeployment of capacity previously dedicated to the United States. While demand is gradually rising, the increase in rates there remains moderate. This is due to the carriers’ desire to offset the losses of the spring. Other axes are developing and contributing to launching the reorganization of flows: between Asian countries and from the United States and Europe toward India. Even if it were to stop, the tariff war will have had one consequence: the trans-Pacific axis is no longer as central.

👋 See you next week, The Merchant team

Sources

Go further

How much does a freight forwarder cost, and how to avoid hidden fees? → How to import from China to Europe, step by step → BAF, GRI, demurrage: how to read the surcharges on your freight invoice →

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