The United States has announced a temporary reduction in tariffs on Chinese goods, lowering them from 145% to reduced levels for a 90-day period starting May 12. This decision comes as part of ongoing trade negotiations between the two countries. The move is expected to trigger a surge in shipping activity, according to experts at C.H. Robinson.
Mike Short, President for Global Forwarding at C.H. Robinson, noted that a wave of cargo is anticipated to begin shipping within two to three weeks. "Customers that had cargo stored at origin are ready to ship," Short explained. "Others are cutting purchase orders this week and asking suppliers to produce as quickly as possible to get their goods out in the 90-day window."
The impact of the tariff reduction will vary by industry. Retailers, especially those reliant on low-priced consumer goods from China, are expected to benefit significantly. Some larger retailers had already frontloaded inventory ahead of the tariff hike in April, while smaller retailers and automotive suppliers adopted a wait-and-see approach.
The tariff adjustment also has implications for ocean freight. Short noted that 20-30% of capacity was removed from the Asia-to-U.S. West Coast trade lanes and 30-40% from the Asia-to-U.S. East Coast lanes in May. Some vessels have been anchored in Shanghai, awaiting the opportunity to resume operations, while others have been redeployed to other regions. Ocean carriers have now announced spot rate increases, effective immediately, with further increases expected on June 1.
C.H. Robinson anticipates that additional freight volumes will begin arriving at U.S. West Coast ports by the end of June, potentially leading to an early ocean peak season this year. However, the impact on trucking may be less clear. Ronnie Davis, VP for North American Surface Transportation at C.H. Robinson, pointed out that seasonal factors, such as produce and beverage shipments, could mask any changes in freight volumes linked to the tariff reduction.
Davis explained that the situation is unique because of the frontloading seen earlier this year. "Front-loading is a sign of preparation, not demand. That freight is now moving through the supply chain—sitting in warehouses and getting delivered as demand calls for it."
By July, the full impact of the tariff reduction may become clearer, depending on the outcome of U.S. trade negotiations with other countries and the strength of the post-produce and beverage season demand. This will also determine whether the 90-day tariff reduction period is extended or if higher tariffs are reinstated.
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