US Logistics Update [May 10, 2025]-English

US Economy

• President Trump announced on May 8 that he has reached a trade agreement with the United Kingdom, the first such agreement since announcing global tariffs. Under the agreement, the U.S. will reduce auto, steel, and aluminum tariffs on the U.K., and the U.K. will reduce non-tariff barriers on U.S. beef, ethanol, machinery, and other products. The details are as follows

  
  

  • The base reciprocal tariff of 10% will remain in place on all UK imports

  • Only a 10% base tariff on the first 100,000 UK vehicles imported into the US each year, instead of the existing 27.5% tariff

  • Tariffs on British steel and aluminum reduced from 25% to 0%, including $10 billion worth of Boeing aircraft purchases                             

While the trade agreement with the U.K. announced today is not a comprehensive bilateral trade

agreement, it is likely to be used as leverage and a framework for further tariff negotiations with

other countries. This means that many countries will not be able to avoid the 10% base tariff and

will have to buy a lot of US goods. Given the U.S. economy's lack of exportable goods, there will be a

lot of pressure on importing countries to open their beef and agricultural markets. Meanwhile,

delegations from the U.S. and China are scheduled to hold formal trade talks in Switzerland on

October 10 and 11, and much attention is being paid to them.

• Despite President Trump's relentless push for a rate cut, Federal Reserve (Fed) Chairman Powell kept the benchmark interest rate (4.25% to 4.50%) unchanged at the Federal Open Market Committee (FOMC) meeting on May 7, citing increased economic uncertainty due to Trump's tariff policy drive and waiting to see how the economy develops. This marks the third time the Fed has kept rates unchanged in three FOMC meetings since the inauguration of Trump's second administration on January 20th. The Fed has a dual mandate of achieving full employment and keeping inflation at 2%, and the Fed believes that recent unemployment and inflation data do not adequately reflect the impact of tariffs. Meanwhile, the unemployment rate stood at 4.2% in April, when the tariffs were in full swing, indicating a robust labor market despite recession fears.

  

Maritime Cargo Market Trends

• Pacific route supply reduction continues

  Impact of Chinese Labor Day holiday, etc. Supply decreased significantly in the week of May 5, but has recovered somewhat since then. However, the supply is still significantly reduced, and although the supply of the week of May 12 has recovered somewhat, 23% of the supply of the week of May 19 has been canceled, so it is unlikely that the supply will recover for the time being.

• Trans-Pacific Capacity Status    

• Maersk declares it will not return to Red Sea despite US-Houthi ceasefire

  Maersk has ruled out returning to the Red Sea this year, despite President Trump's claim on May 6 that Yemen's Houthi rebels have agreed to "surrender" and halt attacks on commercial shipping in the region. CEO Vincent Clerc told analysts during the company's first-quarter earnings call on May 8 that the company will not return to the Red Sea and Suez Canal in the absence of guarantees for the safety of crew, vessels and cargo. Industry estimates that if carriers return to the Red Sea without bypassing the Cape of Good Hope, supply could increase by 1 million TEUs per year.

• U.S. Retailers Scramble to Stock Up for Summer

  U.S. retailers are scrambling to find alternative sources of supply to China to fill inventory this summer and will suffer “across the board” if they fail to do so, Maersk CEO Vincent Clerc warned. He noted that volumes from China to the U.S. have dropped by 30% to 40% since the Trump administration imposed 145% tariffs on most Chinese imports on April 9, and that “people are tapping into inventories in Canada, Mexico, and also seeing how long distributors and other vendors in the U.S. can hold onto inventory.” He said that shipments will resume from imports for which there is no alternative market to China, and that while empty shelves at large U.S. retailers are “not right around the corner,” if inventory cannot be found before summer, “it will start to hurt quite a bit across the board.”

 Air Cargo Market Trends

• China/Hong Kong De Minimis Exemption Ends (May 2)

  De Minimis, which allows imports from China valued at less than US$800 to enter the U.S. duty-free, expires on May 2. Shipments under $800 from China/Hong Kong will be subject to the following fees

  
  

  • Parcel: 145% base duty plus product-specific duties

  • Mail: 120% base duty or $100 per item (increasing to $200 on June 1)

De minimis rates will be phased in for countries other than China and Hong Kong “as soon as their

customs collection systems are in place”

In response to the high tariffs on small parcels, Temu's parent company PDD Holdings announced

that it is completely revamping its business model in the U.S. to be more locally focused. Temu

announced that it has “transitioned its U.S. business to a local fulfillment model,” explaining that

“U.S.-based sellers will now sell U.S.-made products to U.S. consumers.” “We are currently recruiting

sellers to join Temu, and there will be no price impact from this policy.”