US punitive tariffs on goods imported from China are already causing a notable decrease in volumes within the China-to-US supply chain, according to analysis. Chief analyst Peter Sand from Xeneta notes that there are indications of a “relatively sharp” fall in volumes. This observation follows President Trump’s earlier decision to increase US punitive tariffs on goods from China to 125%. Sand predicts that if the existing trade tension persists, the shipping volumes will likely face further decline.
While Trump implemented a 90-day pause in the trade war against most of the world due to concerns about sharp drops in stock prices and bond market instability, the trade conflict with China continues. The US has already imposed tariffs, including at least 10% punitive tariffs on various trading partners and 25% tariffs on imports of steel, aluminum, and cars. According to Peter Sand, despite the lack of concrete figures on the decline in cargo volumes from China, information gathered by Xeneta from Asia points to a significant drop in freight volumes. This reduction is also reflected in shipping companies initiating canceled sailings, also known as blank sailings.
Sand suggests that while US importers may struggle to completely cease importing from China due to their reliance on these goods, the import levels will likely remain lower. Importers may attempt to pass on the increased costs from tariffs to their customers, but those with low profit margins might be forced to discontinue importing from China if they cannot sufficiently raise prices.