US Logistics Update [Apr 26, 2025]-English

Updated: May 3

President Trump made a conciliatory gesture by stating that tariffs on China “will not be zero, but they will not be high,” and Treasury Secretary Scott Bessent said that “the current level of tariffs is unsustainable and we expect tensions between the U.S. and China to ease in the very near future,” indicating a shift from his previous hawkishness. He also backtracked on his dismissal of Fed Chairman Powell within five days, showing that he is trying to stabilize financial markets. However, criticisms of Trump's surrender to “market forces” are also spreading, as his tariff policies have undermined allies' trust and disrupted the economy in his first three months in office, the Iran nuclear deal and the crackdown on Houthi rebels remains sluggish, and the Russia-Ukraine peace process, which he promised to resolve on his first day in office, is stalled, raising doubts about his strategic capabilities.

Reflecting this, an ABC News/Washington Post poll released today found that 7 in 10 Americans

believe Trump's tariffs will increase inflation in the U.S., outpacing hopes that they will boost

manufacturing employment, and 64% disapprove of the president's overall handling of policy.(see

graph above; similar findings from Reuters, CNBC and others)

The Federal Reserve's (Fed) Beige Book, released on April 23, revealed that while the impact of President Trump's tariffs on the U.S. real economy is not yet evident, uncertainty surrounding the wall is pervasive in the economy, making it highly likely that the Federal Open Market Committee (FOMC) will keep its benchmark interest rate unchanged at 4.25-4.50 percent at its May 6-7 meeting.

The Beige Book is a 50- to 60-page report of recent economic trends compiled by each of the 12

U.S. Federal Reserve Districts by contacting banks, businesses, and experts in their respective

regions and is typically released two weeks before the FOMC meeting, which sets monetary policy.

Carriers begin full-scale supply cuts on Pacific routes
Shipping lines are reducing supply on trans-Pacific routes at a faster pace than during COVID-19 in anticipation of lower demand following the imposition of new tariffs on cargo from China to the United States. In late April and early May (Weeks 17-19), more than 25% to nearly 30% of weekly sailings have already been canceled (the disruption rate in Week 19 of 2020, during the early stages of COVID-19, was 24%), with Ocean Alliance (CMA CGM, COSCO, Evergreen, OOCL), Premier Alliance (ONE, HMM, YML), and ZIM/MSC suspending eight weekly sailings altogether (see table below). More suspension announcements are expected in the coming days unless otherwise noted.

Meanwhile, several carriers have announced General rate increases (GRIs) and peak season

surcharges (PSSs) for the Trans pacific East Bound (TPEB) market starting around May 1.

Whether GRIs and PSSs will be applied remains to be seen.

Despite the reduction in supply, the U.S. export ocean freight market remains largely unchanged. This

is mainly due to the relatively low volume of U.S.-origin shipments to Asia, which accounts for only

about 25% compared to the volume of shipments from Asia to the U.S.

U.S.-bound volume and price trends (14 Apr-20 Apr, WorldAcd.com)
Despite reports of a surge in e-commerce sales ahead of the end of the “de minimis” exemption for low-cost US imports from China and Hong Kong on May 2, volumes from China and Hong Kong to the US fell -7% week-on-week, marking the fourth consecutive week of decline (-16% year-on-year). On the other hand, Vietnam (+42%), Taiwan (+30%), Thailand (+24%), and Japan (+12%) saw significant increases (excluding charter). Airfares from China/Hong Kong to the U.S. saw a -5% decrease in average price to $4.72/kg. Prices to the U.S. from other key countries such as Vietnam (-28%), Singapore (-11%), Taiwan (-9%), and Thailand (-9%) also fell significantly due to excess supply over demand from China. Demand to the U.S. from other Asia-Pacific countries outside of China/Hong Kong is growing, but not enough to replace demand from China/Hong Kong, which will likely intensify demand and price declines over time. On the U.S. export side, spot rates for shipments to China and Hong Kong are also declining due to lower demand, although rates for fixed console volumes remain stable.