April 29, 2025 (CE Noticias Financieras) –
Donald Trump's trade war with Beijing is starting to affect the wider US economy, with container port operators and air transport managers reporting sharp falls in goods transported from China.
Logistics groups have reported that container bookings to the US have fallen dramatically since the introduction of 145% tariffs on Chinese imports.
The Port of Los Angeles, the main entry route for goods from China, expects scheduled arrivals in the week beginning May 4 to be a third lower than a year earlier, while air transport operators have also reported sharp drops in bookings.
Bookings of standard 20-foot containers from China to the US were 45% lower than a year earlier in mid-April, according to the latest data from container tracking service Vizion.
John Denton, secretary general of the International Chamber of Commerce, said the upheaval in trade flows between China and the US reflects traders "deferring decisions" as they wait to see how quickly Washington and Beijing can reach an agreement to reduce tariffs.
A survey of chamber members conducted in more than 60 countries after Trump's "day of liberation" tariff announcement on April 2 showed expectations that trade would be permanently impacted regardless of the outcome of upcoming negotiations.
The cost of access to the US market would be the highest since the 1930s, Denton said. Referring to the basic tariff for all countries, he said there is "almost an acceptance that 10% will be the minimum rate to access the US market, whatever the other uncertainties".
Washington and Beijing have shown signs of starting to feel the effects - with both sides announcing some tariff exemptions this week on products important to their respective economies, and Trump predicting that the 145% tariff "will come down substantially". However, China said on Friday that it was not in negotiations with the US.
As the first container shipments from China to face tariffs are due to arrive in the US next week, freight operators said supply chains are changing.
Nathan Strang, director of ocean freight at US logistics group Flexport, said companies are waiting to ship goods in the expectation that Washington and Beijing will agree to a deal to mitigate the tariffs.
American importers are looking to use accumulated stocks before importing new products from China, logistics executives said. They are also holding stock in bonded warehouses where inventory can be stored duty-free, with duties paid on pickup, or diverting it to other nearby countries, such as Canada.
"They're holding goods at origin, holding goods at destination," said Strang, warning that if a deal was struck to cut tariffs, shipping rates would then jump dramatically.
Hapag-Lloyd, one of the world's largest container shipping lines, said that Chinese customers had canceled approximately 30% of their bookings leaving China.
Taiwanese container shipping company TS Lines, listed in Hong Kong, has suspended one of its services from Asia to the US west coast in recent weeks. "The demand isn't there," said a person from the group.
The drops in order volumes were reflected in landings in Los Angeles, according to shipping data analysts Sea-Intelligence, who reported an increase in 'blank sailings', where scheduled ships from China were being canceled.
Almost 400,000 fewer containers are booked on routes from Asia to North America during the four weeks from May 5 than planned - a 25% drop from the amount scheduled for the same period in early March, before the tariffs were imposed.
The Port of Los Angeles alone expects 20 blank sailings in May, representing more than 250,000 containers-up from six in April.
That's a sharp drop from this week, when arrivals were up 56% year-on-year - a sign that importers have been anticipating deliveries from other Southeast Asian manufacturing hubs, such as Cambodia and Vietnam, which are enjoying a 90-day "pause" in tariffs.
Container prices have reflected the change in the supply chain, according to data from logistics hub Freightos, with a 15% increase in the price of a 40-foot container from Vietnam compared to a 27% drop on the main China-US routes.
"Rates from other Asian countries to the US may continue to rise before the tariff deadline in July," said Judah Levine, head of research at Freightos.
Air transportation volumes have also fallen dramatically, according to the US industry association, the Airforwarders Association, with its members' bookings from China dropping by approximately 30%.
"Many members have simply stopped taking orders from China," said executive director Brandon Fried. "This is also creating a whiplash effect on prices and booking rates as merchants react to every piece of news from the White House."
The sector is expected to be further affected by a US decision to close its "de minimis" scheme, which allowed goods valued at less than $800 to be imported tariff-free, an important route for e-commerce retailers such as Shein and Temu. Chinese products are due to lose their exemption from May 2nd.
Lavinia Lau, commercial director of Hong Kong's Cathay Pacific, whose air cargo business contributes about a quarter of its revenue, said she expects a "weakening" of demand between China and the US due to the tariffs and changes in de minimis rules.
Hong Kong cargo carrier Easyway Air Freight said business from China to the US fell by approximately 50% following the tariff increases.
E-commerce executives noted the decrease in demand for freight. Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, said: "We are seeing noticeably fewer price quote requests in relation to air freight shipments."
While inventory accumulation and supply chain reorientation have helped protect consumers from sharp drops in freight volumes, carriers and retailers are starting to feel the effects of the slowdown in imports.
Arizona-based Knight-Swift Transportation, one of the largest trucking companies in the US, warned of lower anticipated volumes, citing uncertainty caused by the threat of tariffs.
CEO Adam Miller said some of the group's biggest customers were "expressing concern" that the cost of tariffs would translate into lower volumes in May.
Retail consultants said buying patterns were reflecting three consecutive months of falling consumer confidence indices.
John Shea, CEO of Momentum Commerce, which helps consumer companies sell about $7 billion annually on Amazon, warned of a potential "double whammy" of rising prices and declining consumer spending.
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