Market Pulse 2025 Week 19

The de-escalation in the Sino-US trade war came earlier than expected after the 2 countries agreed to lower reciprocal tariffs to 30% for Chinese exports to the US for 90 days from 14 May 2025 while tariffs on US exports to China is lowered to 10%, setting the stage for a surge in Transpacific cargo volumes in the next 3 months. The volume rebound will coincide with the traditional summer peak season, with freight rates set to surge as a result. Carriers have pre-announced provisional transpacific peak season surcharges of $1,000 to $2,000 per feu that would apply as early as 15 May that will push rates to the US West Coast above $3,500 again. Freigth rates on routes outside of the US are also expected to benefit as vessel capacity is drawn back to the transpacific. EC freight futures hit their daily upper limits across all forward contracts in the next 12 months, and the buoyant market sentiment is also expected to spread into the charter market with charter rates expected to recover their earlier strength as carriers put back the tonnage removed from the US in the last 4 weeks.

Transpacific peak season surge expected after Sino-US trade deal
The 115% cut in US tariffs on China was larger than expected amidst signs of severe strain on US import volumes that would have hit store shelves in the coming weeks. This is now set to reverse, with an import surge expected over the next 3 months that could exceed the COVID-era peaks seen in 2021-2022.