Blanket US imports tariffs announced last week have resulted in significant cargo booking cancellations in Asia, thwarting carriers’ efforts to raise transpacific freight rates and placed the May contract negotiations in limbo. The effective US tariff rate, on a container volume weighted basis, will rise substantially to 36% setting the stage for a full blown trade war with our global container demand growth projections already cut to -1.1% in 2025.
EC freight futures tumbled, reflecting market concerns over the weakening trade outlook but charter rates and second hand ship prices have however remained firm, at least for now. MSC continued to raid the second hand market, while Zim remains undeterred by potential US levies on Chinese built ships with fresh charters for 10 new ships to be delivered from China in 2027 and 2028.
Johnson Leung
Effective tariff rate on US container imports is over 36%
The US tariffs announced on 2 April will have a larger impact on container markets, relative to other shipping segments, due to the heavier import duties on China and Vietnam which together account for 51% of total US container imports in 2024. The trade-weighted tariff rate is more than 36% based on Linerlytica’s calculations derived from each country’s share of total US container imports. The high import duties on other Southeast Asia and South Asia countries leaves little room to substitute current imports from China and Vietnam, placing a significant stagflation risk on the US if the current tariffs are implemented without exemptions and exclusions.
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