US Logistics Update [Mar 15, 2025]-English

U.S. Economy

President Trump's 25% tariffs on steel, aluminum, and derivatives, a sign of the “tariff war” he has warned the world about, took effect on March 12 at 0:01 am. All exceptions and exemptions under agreements with other countries, such as the U.S./Mexico/Canada Free Trade Agreement (USMCA) and the Korea-U.S. Free Trade Agreement (KORUS), have been rescinded, meaning that the tariffs on steel, aluminum, and 166 derivatives, such as bolts, nuts, and springs, will go into effect immediately. Meanwhile, the Wall Street Journal argues that there are signs of a slowdown in the U.S. economy, and that Trump needs to hold off on his willy-nilly tariff policy in order to allay these concerns. A CNN poll released on March 12 showed that 61% of U.S. adults do not support Trump's tariff policy, and the approval rating of President Trump is also declining, raising the question of whether the honeymoon period for President Trump, who celebrated his 50th day in office on March 12, is coming to an end.

The U.S. Department of Labor today reported that the Consumer Price Index (CPI) rose 2.8% year-over-year in February. Excluding volatile energy and food, core CPI rose 3.1% y/y, slowing to the lowest level in 3 years and 10 months since April 2021. The unemployment rate rose to 4.1%, up from 4.0% the previous month but still low. This has eased immediate fears of inflation and recession, but inflation and recession fears are likely to persist as these indicators barely reflect the effects of President Trump's tariffs. Meanwhile, JP Morgan raised the probability of a recession to 40% from 30%, and Goldman Sachs cut its U.S. economic growth forecast sharply from 2.4% to 1.7%. Fed Chairman Powell also said at the Monetary Policy Forum event in New York on March 7 that the Fed will not rush to make monetary policy decisions until the impact of the Trump administration's policy changes is clearer.

Maritime Cargo Market Trends

U.S. retailers lower import forecasts for April to July due to tariff uncertainties
The National Retail Federation (NRF) and Hackett Associates forecast lower import volumes from April through July due to tariff issues and the resulting inventory buildup from frontloading. Imports in April and May are expected to increase year-over-year, but at a slower pace than previously expected, while June and July are expected to decline year-over-year, with July imports down 13.9% from last year. NRF cited concerns about increased tariffs on Chinese goods and possible fees on Chinese tonnage, which could increase costs for both businesses and consumers.

Pacific route freight rates continue to decline... 2025-26 contract negotiations challenging
The deteriorating US economic outlook and the continued decline in freight rates are making it difficult for carriers on the Pacific East bound routes to achieve the freight rates they had targeted in the 2025-26 annual contract. Until last week, carriers were seeking to maintain rates of $2,000/FEU westbound and $3,000/FEU eastbound, but current negotiations have seen them reduced to $1,800-$1,900/FEU westbound and $2,900/FEU eastbound, with some shippers delaying negotiations in anticipation of further declines. Spot freight rates on the Asia-US route have plummeted since the Lunar New Year holiday, with Westbound down 19% to $1,850/FEU and Eastbound down 14% to $2,900/FEU in one week. The Trump administration's rapidly changing tariff policies are making it difficult for importers to plan their supply chains. Meanwhile, most service contracts (SCs) started on May 1.

U.S. Environmental Protection Agency (EPA) Scraps Biden's Green New Deal Policies
The EPA announced today that it is scrapping the “Green New Deal” policies under former President Joe Biden, including incentives for electric vehicles. The standards were expected to reduce passenger vehicle emissions by nearly 50 percent and increase the share of electric vehicles in new cars sold between 2030 and 2032 to between 35 and 56 percent. EPA Administrator Lee Zeldin called the “Green New Deal” a “Green New Scam” in a WSJ op-ed on March 13, stating that “today is the day the Green New Scam dies.

Air Cargo Market Trends

Air freight rates from China plummet amid US tariff policy turmoil
Air freight rates from China to the US plummeted after the Lunar New Year holiday. The uncertainty caused by the US “de minimis” rule change, coupled with February being a traditional low season, was analyzed as a contributing factor. Although rebounding in March, average freight rates from Shanghai to the U.S. fell 29% month-over-month in February, with e-commerce companies looking for new ways to reduce their tariff burden. Last month, the U.S. temporarily suspended duty-free access for low-priced products under $800, causing a logistics backlog of more than 6 million e-commerce goods nationwide and paralyzing the logistics system. Air freight demand slowed due to lower e-commerce volumes, with some volumes shifting to ocean transportation. Taiwan-based forwarder Dimerco Express expects e-commerce to accelerate the shift from a B2C model to a fulfillment-based ocean freight model. Meanwhile, in terms of future air cargo supply, aviation consultancy Cargo Facts said that while tariffs and de minimis moves are expected to reduce demand in the short term, aircraft aging, aircraft production and delays in the conversion of passenger aircraft to freighters are likely to cause a supply shortage in the long term.