US-China Cut Tariffs, Trigger Early Peak Shipping Season

The United States and China have agreed to a 90-day truce, significantly reducing tariffs on each other's goods—from 145% to 30% for U.S. tariffs on Chinese imports, and from 125% to 10% for Chinese tariffs on U.S. goods—aiming to ease trade tensions and continue negotiations for a longer-term deal. This temporary tariff rollback is expected to trigger an early surge in container shipping, potentially bringing forward the traditional peak season for ocean freight between China and the U.S., as importers rush to move cargo before tariffs potentially change again. However, capacity constraints remain a challenge, as many vessels were redeployed to other routes during the previous tariff escalation, which may lead to higher short-term shipping costs and bottlenecks at U.S. ports. Businesses expressed cautious optimism, acknowledging the relief from the tariff reduction but noting that the still-elevated 30% tariff and logistical challenges could dampen demand and complicate supply chain adjustments. Energy exports, such as U.S. LPG to China, also stand to benefit from the tariff rollback, altering trade economics and pricing in the sector. Overall, the tariff truce has sparked positive market reactions but leaves uncertainty about the long-term trade relationship and supply chain impacts.