The trade conflict between Donald Trump and Beijing is beginning to impact the broader U.S. economy, as reported by container port operators and air freight managers, who note significant reductions in goods transported from China. Logistics groups have observed sharp declines in container bookings to the U.S. due to the imposition of 145% tariffs on Chinese imports.
The main U.S. entry point for Chinese goods, the Port of Los Angeles, anticipates a one-third reduction in scheduled arrivals in the week starting May 4 compared to the previous year. Airfreight handlers also report substantial decreases in bookings. By mid-April, bookings for standard 20-foot shipping containers from China to the U.S. had decreased by 45% year-on-year, according to container tracking service Vizion.
John Denton, Secretary-General of the International Chamber of Commerce, commented on the disruptions in China-U.S. trade flows, attributing them to traders delaying decisions while awaiting potential tariff negotiations between Washington and Beijing. A survey conducted among ICC members in over 60 countries after Trump’s April 2 tariff announcement indicated expectations of permanent trade impacts regardless of negotiation outcomes.
Denton noted that the cost of accessing the U.S. market is the highest since the 1930s, with an acceptance that a 10% baseline tariff would apply to all countries. Washington and Beijing are reportedly feeling the repercussions, with both sides announcing some tariff exemptions on essential products and Trump predicting a significant reduction in the 145% tariff. However, China recently stated it is not currently in talks with the U.S.
With the first container shipments from China subject to tariffs expected to land soon, freight operators report shifts in supply chains. Nathan Strang, Ocean Freight Director at U.S. logistics group Flexport, stated that companies are delaying shipments in anticipation of a tariff-reducing agreement between Washington and Beijing. U.S. importers are utilizing stockpiled inventories or holding stock in bonded warehouses, storing goods duty-free until withdrawal. Others are diverting stock to nearby countries like Canada.
Hapag-Lloyd, a major global container shipping line, reported that Chinese customers canceled approximately 30% of its bookings. Meanwhile, TS Lines, a Taiwanese container shipping company, suspended its Asia to U.S. west coast service due to lack of demand.
Shipping data analysts Sea-Intelligence noted a surge in “blank sailings,” with scheduled vessels from China being canceled. About 400,000 fewer containers are booked on Asia to North America routes in early May, representing a 25% drop compared to the planned schedule before tariffs. The Port of Los Angeles alone anticipates 20 blank sailings in May, totaling over 250,000 containers, up from six in April.
Container prices reflect this shift in supply chains, with a 15% price increase for containers from Vietnam compared to a 27% fall on major China-U.S. routes. Airfreight volumes have similarly dropped, with U.S. industry association Airforwarders Association reporting a 30% decrease in bookings from China.
Brandon Fried, Executive Director of the Airforwarders Association, remarked that members have stopped receiving orders from China, noting volatility in prices and booking rates in reaction to news from the White House. The industry’s challenges are compounded by a U.S. decision to close its “de minimis” scheme, which allowed tariff-free imports for goods valued under $800, affecting e-commerce retailers and expected to impact from May 2.
Cathay Pacific’s Chief Commercial Officer Lavinia Lau forecasts a weakening demand due to tariff changes and de minimis rule adjustments. Easyway Air Freight, based in Hong Kong, reported a 50% business drop following tariff increases. E-commerce executives also note decreased freight demand, with fewer air cargo shipment quotations requested.
Despite stockpiling efforts buffering consumers from significant freight volume decreases, trucking companies and retailers are feeling the slowdown. Knight-Swift Transportation, a large U.S. trucking firm, anticipates lower volumes, citing tariff-related uncertainties. CEO Adam Miller mentioned customer concerns over tariffs leading to canceled or stopped orders from China, with supply chains being adjusted to mitigate costs.
Retail consultants observe changes in purchasing patterns, aligning with softening consumer confidence indices over three consecutive months. John Shea, CEO of Momentum Commerce, warns of potential risks posed by rising prices and declining consumer spending, noting evidence of consumers trading down while prices increase.
