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The Merchant · n°173 · December 18, 2025

Courts may be shippers' best friends in 2026

Figure of the week

$1.7 trillion More US imports are excluded from the Trump administration’s tariffs than are included, according to a new analysis by Politico . The publication said that at least $1.7 trillion in imports are excluded from tariffs due to trade deals or exemptions, while only $1.6 trillion are included. It should be noted that President Donald Trump has accused Politico of being hostile to his policies.

Quote of the week

“The reality is that nobody is reshoring. It’s all friend shoring. They’re going to Mexico. They’re going to Southeast Asia.” Cameron Johnson, senior partner at consultancy Tidalwave Solutions, says supply chains are reconfiguring, but not quite how recent US governments had planned.

Carriers’ blanks go off with a muted pop

Yet another decline in Trans-Pacific spot rates has shown that ocean carriers are firing blanks when it comes to efforts to reduce capacity . The Shanghai to Los Angeles leg saw 7% declines week on week, while Shanghai to New York saw 5% falls, according to WCI figures. Since most Christmas inventory was already shipped in November, there is currently insufficient cargo to support freight rates. Consequently, Drewry expects rates to soften slightly in the coming week. Of course, blankings are not carriers’ only weapon when it comes to propping up rates; GRIs have been coming in rapid succession, and further increases were looking likely. However, carriers face the same problem as with blankings. Demand is simply too weak to allow for the GRIs to stick. The wider reason for this is that shippers engaged in widespread front-loading earlier in the year in a bid to mitigate tariff risk. Inventories are now sufficiently well stocked that there is little seasonal replenishment taking place. All this is leading to a quieter end of year than normal. With consumer sentiment remaining relatively weak and the administration reaffirming this week that the current terms of the US-China trade deal would only last for a year, shippers are approaching the end of 2025 without any long-term certainty. However, they are likely to face fewer challenges when booking space and encounter relatively favorable rates over the coming two weeks .

Tale of two modes as air freight capacity tightens

Once again, shippers are seeing strongly divergent patterns between air and ocean freight . Excess capacity has played the major role in depressing rates on ocean freight into the US. With air freight, the opposite is occurring. Asia Pacific to US spot rates increased by 6% week on week, despite relatively flat volumes. Knock-on effects of supply chain disruptions are continuing to hold back deliveries of new aircraft. This is limiting fleet growth and forcing airlines to extend the operational life of older aircraft. Julia Seiermann, head of industry analysis at IATA, said airlines have pushed fleet utilization to historic highs. Global air cargo capacity fell by around 2 percent year on year in November 2025, largely due a sharp contraction in freighter availability. Should we start seeing a return of container traffic to Red Sea routings next year, air cargo volumes are likely to drop significantly. For now, capacity is tight, particularly between Europe and the USA, though it has gradually begun to ease from China to the USA. Rates are expected to start to decrease and stabilize until week one of 2026.

Courts may be shippers’ best friends in 2026

Shippers have pinned their hopes on a Supreme Court decision overturning tariffs, but they may have to brace themselves for more costs and more uncertainty in 2026. Markets have been eagerly awaiting the Supreme Court decision on whether President Donald Trump exceeded his authority in using emergency powers to impose a range of tariffs. Early lines of questioning by Supreme Court justices indicate that the ruling may well go against the White House. Treasury Secretary Scott Bessent has said he is confident the court will rule in the administration’s favor, but observers might well ask if he could say otherwise. Yet it is increasingly looking like the court will not issue its ruling until 2026, as the court’s schedule for the rest of the year makes no mention of tariffs. That does not entirely rule out a surprise pre-Christmas decision. Holly Froum, a litigation analyst with Bloomberg Intelligence, said: “Based on prior practice, it’s looking like they render the decision in 2026, but because this is an exceptional case, they may deviate from prior practice and issue it this month.” Froum stressed that the court had agreed to fast-track consideration of the case. It is increasingly looking like the White House will not stand in the way of shippers being refunded for tariffs they have paid under the policies (see Did you know? below). The bad news is that the White House has promised to introduce alternative policies to raise any revenues it will lose through the scrapping of tariffs. Bessent said earlier this month that the 1962 Trade Act gave the president powers to replicate the exact tariff structure through different laws. He added that the laws would allow for permanent imposition of the tariffs. There is, however, every chance that the retailers hardest hit by any new tariff structure would launch yet another legal challenge should that happen. In 2026, therefore, shippers may face a different kind of tariff uncertainty to 2025, one dependent upon the results of legal wranglings, lawsuits and countersuits.

🤔 Did you know ?

Shippers’ chances of getting tariff costs refunded have received a major boost. Should it rule the Trump administration’s tariffs illegal, the US Department of Justice has told the court of international trade that the US government will not stand in the way of potential tariff refunds. Should the court rule against the administration, however, any such refunds would not be automatic. Shippers would need to apply to the Court of International Trade for any refunds.

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👋 See you next week, The Merchant team

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