After the reduction of China-US tariffs, what happened to freight rates?
According to the "Joint Statement on China-US Economic and Trade Meeting in Geneva" issued on May 12, 2025, the two sides reached the following key consensus:
Tariffs were significantly reduced: the US canceled 91% of the tariffs imposed on Chinese goods in April 2025, and China simultaneously canceled the counter-tariffs of the same proportion; for the 34% "reciprocal tariff", both sides suspended 24% of the increase (retaining 10%) for 90 days.
This tariff adjustment is undoubtedly a major turning point in China-US economic and trade relations. The next 90 days will become a key window period for the two sides to further negotiate and promote the continued improvement of economic and trade relations.
So, what are the impacts on importers?
1. Cost reduction: The first phase of tariff reduction is expected to reduce China-US trade costs by 12%. At present, orders are gradually recovering, Chinese factories are accelerating production, and US importers are restarting projects.
2. Tariff expectations are stable: the two sides have established a consultation mechanism to reduce the risk of policy changes, and companies can plan procurement cycles and logistics budgets more accurately.
Learn more:
How many steps does it take from the factory to the final consignee?
Impact on freight rates after tariff reduction:
After tariff reduction, importers may speed up replenishment to seize the market, resulting in a surge in demand for shipping space in the short term, and many shipping companies have announced price increases. With the reduction in tariffs, customers who were waiting before began to notify us to load containers for transportation.
From the freight rates updated by the shipping companies to Senghor Logistics for the second half of May (May 15 to May 31, 2025), it has increased by about 50% compared with the first half of the month. But it can't resist the upcoming wave of shipments. Everyone wants to take advantage of this 90-day window period to ship, so the logistics peak season will come earlier than in previous years. At the same time, it should be noted that shipping companies are transferring capacity back to the US line, and the space is already tight. The price of the US line has risen sharply, driving up the Canadian and South American routes. As we predicted, the price is high and booking space is difficult now, and we are busy helping customers grab space every day.
For example, Hapag-Lloyd announced that from May 15, 2025, the GRI from Asia to West South America, East South America, Mexico, Central America and the Caribbean will be US$500 per 20-foot container and US$1,000 per 40-foot container. (Prices for Puerto Rico and the U.S. Virgin Islands will increase from June 5.)
On May 15, the shipping company CMA CGM announced that it would start charging peak season surcharges for the Transpacific Eastbound market from June 15, 2025. The route is from all ports in Asia (including the Far East) or transit to all ports of discharge in the United States (except Hawaii) and Canada or inland points through the above ports. The surcharge cost will be US$3,600 per 20ft container and US$4,000 per 40ft container.
On May 23, Maersk announced that it would impose a peak season surcharge PSS on the Far East to Central America and the Caribbean/South America West Coast routes, with a 20-foot container surcharge of US$1,000 and a 40-foot container surcharge of US$2,000. It will take effect on June 6, and Cuba will take effect on June 21. On June 6, the surcharge from mainland China, Hong Kong, China, and Macau to Argentina, Brazil, Paraguay, and Uruguay will be US$500 for 20-foot containers and US$1,000 for 40-foot containers, and from Taiwan, China, it will take effect from June 21.
On May 27, Maersk announced that it will charge a Heavy Load Surcharge from the Far East to the West Coast of South America, Central America and the Caribbean starting from June 5. This is an additional heavy load surcharge for 20-foot dry containers, and a surcharge of US$400 will be charged when the verified gross weight (VGM) (> 20 metric tons) of the cargo exceeds the weight threshold.
Behind the price increase of shipping companies are the result of a variety of factors.
1. The previous US "reciprocal tariff" policy disrupted the market order, resulting in the cancellation of some cargo shipment plans on North American routes, a sharp drop in spot market bookings, and the suspension or reduction of some routes to the United States by about 70%. Now that tariffs have been adjusted and market demand is expected to pick up, shipping companies are trying to make up for previous losses and stabilize profits by raising prices.
2. The global shipping market itself faces many challenges, such as the increased congestion in major ports in Asia and Europe, the Red Sea crisis causing routes to bypass Africa, and a surge in logistics costs, all of which have prompted shipping companies to increase freight rates.
3. Supply and demand are not equal. American customers have placed orders soaring, and they are in urgent need of replenishing stocks. They are also worried that there will be changes in future tariffs, so the demand for cargo shipping from China has exploded in a short period of time. If there had not been the previous tariff storm, the goods shipped in April would have arrived in the United States by now.
In addition, when the tariff policy was issued in April, many shipping companies transferred their shipping capacity to Europe and Latin America. Now that demand has suddenly rebounded, the shipping capacity cannot meet the demand for a while, resulting in a serious imbalance between supply and demand, and the shipping space has become extremely tight.
From the perspective of the global supply chain, the reduction in tariffs marks the shift of China-US trade from "confrontation" to "rule game", boosting market confidence and stabilizing the global supply chain. Seize the window period of freight fluctuations and transform policy dividends into competitive advantages through diversified logistics solutions and supply chain flexibility construction.
But at the same time, the price increase and tight shipping space in the shipping market have also brought new challenges to foreign trade companies, increasing logistics costs and transportation difficulties. At present, Senghor Logistics is also closely following market trends, providing customers with tariff-freight linkage warnings and customized solutions to jointly cope with the new normal of global trade.
Post time: May-15-2025
