Freight in a Flash

Figure of the week

$2 trillion

The amount of market value wiped from US stocks after Donald Trump’s Truth Social post threatening 100% tariffs on China. The S&P 500 lost 2.7% following the post. It was its worst performance since Trump’s so-called Liberation Day tariff announcement.

Quote of the week

“Chiefly, the question that every man and his dog are attempting to answer is whether this is a credible threat, that the Trump admin might follow through on, or whether this is another example of the ‘escalate to de-escalate’ strategy that Trump used so frequently earlier in the year.” Michael Brown, a senior research strategist at the brokerage firm Pepperstone, asks the question many shippers will be pondering following President Donald Trump’s latest tariff threats.

Shippers brace for fallout as tariff fight flares again

The fragile tariff truce between Beijing and Washington has collapsed as both sides threaten tit-for-tat trade measures. The key question for shippers is whether the threats will materialize or simply serve as leverage to help strike a broader deal . China’s announcement of sweeping restrictions on exports of rare-earth materials and technologies appears to have been a response to new U.S. limits on technology exports. President Donald Trump reacted angrily, hinting on Truth Social that he might cancel his planned summit with Premier Xi Jinping and threatening 100% tariffs on Chinese goods. For its part, Beijing vowed to retaliate if that move goes ahead. On paper, the confrontation could spell trouble for companies still sourcing heavily from China. The U.S. said it plans to impose the new tariff on November 1 and expand export controls on critical software. Trump called China’s stance “unheard of in international trade” and “a moral disgrace.” China, which controls about 70 percent of global rare-earth supplies and an even larger share of refined output, remains a crucial supplier for high-tech and defense industries. Beijing has promised to respond to any U.S. efforts to impose tariffs. So what next? Trump later softened his tone, saying Xi was just “in a bad moment” and that relations ‘would be fine”. Calmer heads will note that both parties have made—and later withdrawn—similar threats in the past to extract concessions. Still, shippers will be wary that one of these diplomatic flare-ups could spiral into lasting disruption . After a year of repeated shocks, October looks set to test whether both sides are bluffing—or barreling toward a new phase of the tariff war.

Tariffs create “U.S. plus-one” air freight patterns

Washington’s tariff push has flipped the global air cargo map, replacing the familiar “China-plus-one” strategy with a “U.S.-plus-one” approach . That’s according to Glyn Hughes, director general of TIACA, who told a Xeneta webinar that airlines are redeploying capacity in response to supply chain shifts triggered by the Trump administration’s trade policy. “We’ve long heard ‘China plus one’ from a production perspective,” Hughes said. “Now we’re hearing ‘U.S. plus one’ from a consumption perspective.” He expects more manufacturing to move to Southeast Asia and greater diversification of consumer markets—both bullish for air freight. The policy catalyst was the White House’s May removal of the de minimis exemption on small packages from China, which spurred airlines to seek new routes and markets. Chinese e-commerce giants Temu and Shein reacted swiftly, shifting their billion-dollar marketing budgets to Europe. Since then, trans-Pacific traffic has weakened, driving five consecutive months of year-on-year declines in global air cargo spot rates. For shippers, that means more uncertainty: demand patterns are still settling, and airlines are primed to pivot fast. Hughes warned that the volatility extends beyond e-commerce, with other industries wary of sudden tariffs of 25, 40, or even 50 percent. Analysts report that shippers are adding flexibility by diversifying origins and entry points. With airlines’ winter schedules tightening, the consultancy expects turbulence to persist into peak season .

China port retaliation raises spectre of fresh risk

Shippers can expect minimal impact from the new USTR port fees that went into force earlier this week, but surprise Chinese retaliation has injected fresh unpredictability into supply chains . Carriers have largely succeeded in circumventing the measures by reshuffling fleets, according to Niels Rasmussen, chief shipping analyst at BIMCO. Most major lines had already said they would not impose surcharges due to the fees, though analysts warned that last-minute adjustments could still cause some disruption. Now, however, the overall impact appears muted. The focus has shifted to China’s response: Beijing has announced new port fees on U.S.-associated vessels. Exactly which carriers will be affected—and how much they will pay—remains unclear, with some analysts criticizing the transport ministry’s vague wording, possibly meant to preserve flexibility. Early indications suggest Matson, Maersk, and APL, part of the CMA CGM group, could face the most exposure due to U.S. ties. Matson, however, has said it will not alter schedules or pass on the costs, offering reassurance to shippers. Other partly U.S.-owned carriers, such as Israel’s Zim, fall below the threshold. Even so, observers warn that Beijing’s actions signal a more volatile phase in an already tense trade war . Coming on top of the new flare-up in Beijing-Washington relations, China’s port fee threat is one more issue shippers should have on their radars.

🤔 Did you know ?

Transatlantic shippers have been warned to expect delays at major European ports due to a series of strikes. Maersk has warned Rotterdam customers that a strike by two lashing companies at the port would cause delays and interruptions. The complex of Antwerp and Bruges/Zeebrugge has also been affected. Rotterdam could see yet more delays due to demonstrations against the Gaza War.

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