On Monday, May 12, 2025, China and the United States issued a joint statement agreeing to reduce tariffs on each other's goods for the next 90 days. This move offers a temporary reprieve from trade tensions that threatened a global economic downturn and deepened the divide between the world’s two largest economies.

Tariff Reductions

In this round of negotiations:

• The US canceled 91% of its additional tariffs, while China reciprocated by lifting 91% of its retaliatory tariffs.
• The US paused 24% of its “reciprocal tariffs,” and China mirrored this by suspending 24% of its countermeasures.
• However, the US will maintain a 20% tariff on China due to fentanyl-related concerns.
• As a result, within 90 days, the US will reduce tariffs on Chinese goods from 145% to 30%, and China will lower tariffs on US goods from 125% to 10%.

Shipping Industry Response

The container shipping industry is gearing up for normalized trans-Pacific operations. Flexport CEO Ryan Petersen stated, “Get ready for a shipping boom.”

• Maersk called the 90-day tariff suspension “a step in the right direction.”
• CMA CGM CEO Rodolphe Saade noted the pause is “good news” for the company.
• Hapag-Lloyd anticipates increased cargo volumes on US-China routes, potentially adjusting fleet deployments if demand surges. The company initially planned smaller vessels but may scale up if needed.

Shipping stocks surged on May 12, recovering recent losses:

• Maersk: +10%
• Hapag-Lloyd: +12%
• ZIM Integrated Shipping: +14%

However, industry leaders caution that supply chain uncertainties persist, making it hard to predict the extent of trans-Pacific recovery. The tariff cuts are significant enough to unleash suppressed demand, potentially flooding the market with backlogged cargo.

Tightening Shipping Capacity

Pacific Maritime Association President Mike Jacob noted that while bookings on eastbound trans-Pacific routes are expected to rebound, the incomplete tariff rollback clouds the scale and intensity of demand. Challenges include limited vessel space and container equipment availability on both sides of the Pacific.

Xeneta Chief Analyst Peter Sand highlighted that the 22-day average transit time across the Pacific will drive clients to ship as much as possible within the 90-day window, pushing freight rates upward.

Linerlytica predicts a cargo surge over the next three months, amplified by traditional summer peak season demand. Carriers have announced temporary peak season surcharges of $1,000-$2,000/FEU, effective May 15, likely pushing US West Coast rates above $3,500/FEU.

Jason Cook, Managing Director at Ardent Global Logistics, said, “The race for space is on. Clients began pre-booking last Friday and Monday morning. Every day this week is critical to secure space and carrier quotas.”

Since the Trump administration’s 145% tariffs, China has accumulated significant cargo backlogs. Hapag-Lloyd reports a 30% drop in cargo volumes in recent weeks, while Flexport’s Nerijus Poskus noted that 34% of trans-Pacific capacity was cut through cancellations and route withdrawals in the first three weeks of May.

Booking data from Vizion and Dun & Bradstreet shows a 29% week-on-week surge in container bookings last week, signaling a pre-tariff announcement uptick.

Poskus warned that with vessel utilization at 85%-90%, a demand spike exceeding 10% against only 10% restored capacity could exhaust available space. Carriers may need extra sailings, but redeploying vessels from intra-Asia or Asia-Latin America routes will take time—potentially four weeks or more.

Port Congestion Risks

Industry experts warn that US port infrastructure, unchanged since 2020, may buckle under a cargo surge. Maersk North America President Charles van der Steene said current volumes are down 30%-40%, but a rebound could overwhelm ports, causing disruptions.

Poskus highlighted container shortages, noting that many empty containers were redirected to Southeast Asia with no immediate return plans. Reduced sailings have also slowed empty container repatriation to Asia.

Trade Sprint Begins

If no long-term agreement is reached within 90 days, tariffs may rise again. US businesses are rushing to stockpile goods during this window to hedge against potential tariff hikes.

• Therabody has restarted production lines in China.
• Bogg Bag canceled planned price hikes, resuming paused production and accelerating exports to avoid port congestion.
• Net Health Shops is considering resuming dozens of container shipments halted since March to ease supply chain pressures.

Chinese exporters are also restarting US-bound trade. Wenzhou Desay Group, a shoe manufacturer, plans to resume exports after receiving brand orders, though a 46% effective tariff rate (including a 16% Trump-era tariff) remains a hurdle. Shenzhen Xiangfeiyang Technology, a clothing e-commerce firm, is awaiting US Customs clearance to scale up shipments.

US importers face a tight deadline to ship by late July, weighing whether Chinese suppliers can deliver on time to maximize the tariff window.