The ocean freight market continues with significant shifts due to many factors. But first, the update on the US tariff programs.

Tariff Update

The US Court of International Trade (CIT) has ruled that the Trump Administration overstepped its authority under International Emergency Economic Powers Act ( IEEPA) by imposing tariffs on a broad set of imports. This decision applies to all importers, not just the plaintiffs. However, it is now "stayed" by the Appeals Court so it is not yet in effect.

 The CIT court decision did block the following tariffs:

  • 25% fentanyl tariffs (Canada & Mexico)
  • 20% fentanyl tariffs (China)
  • 10% across-the-board reciprocal tariffs (all countries including China)
  • Additional reciprocal tariffs scheduled to take effect on July 9 (select countries) & August 10 (China)

What happened next? The government has appealed the CIT’s ruling and been granted an emergency stay and allows the IEEPA tariffs to remain in place until they rule. A resolution may take several years unless the court fast-tracks the appeal.

We should not expect any refunds on duties already paid for these tariffs until the issue is fully resolved. This could take years.

What continues to stay:

  • The China de minimis ban
  • Section 232 tariffs (e.g., steel and aluminum)
  • Section 301 tariffs from Trump’s first term

These all remain in place and in effect.

 

If the Trump administration does lose the case, there are other laws available that they could use to prop up these same tariffs. Again, this could add years to the tariff issues and if the expectation that all the tariffs will be negotiated and in place with partner countries, the issue likely will be moot.

As for China specifically, there are other tariff levers available to use as long as China is continued to be seen as an aggressor and combatant of sorts with the US. Hopefully, this China/US situation will also resolve and we can work together again in harmony.

Reach out to your Trade & Customs experts for exact impact and data.

💡
QUOTE “Not that serious on equipment shortage, like Shenzhen, a factory may need to go outside depot with longer travel distance for empty pick up. No problem to pick up indeed. Carriers also play the game stopping S/O to exchange EIR. Sometimes reason is "no equipment" but the fact is carrier technically cancel the space released by the way.”

Market Trends

- Transpacific Demand Surge: overwhelming carrier capacity, with week-over-week booking volumes up by over 50%. Some ports are well past capacity.

- Transpacific Rate Increases: General Rate Increases (GRIs) are quoted as expected to take effect on June 1, 2025, on all shipments from Asia and the Indian Subcontinent to the US and Canada. Post-GRI rate levels for Short Term/spot rates expected for June are predicted to be:

        •  $6,000-$6,500 to the US West Coast (USWC)   
        • $7,000-$7,500 to the US East Coast (USEC) and Gulf ports
So far, spot rates indexes for June are below the above predictions so far! A more practical level: USWC $4400-$4700 and to USEC $5200-$5600 (all rate estimates are in 40ft cntr)

  • Capacity Restoration: carriers are working fast to reintroduce suspended services and add extra loaders for the TP.
  • Carrier Strategies: Carriers are using various strategies to manage capacity, including:
    •  Slowing carrier confirmations on bookings and even  S/O (Shippers' Order)to delay or cancel space releases.
    • Implementing the aforementioned Peak Season Surcharges (PSS) or General Rate Increases (GRI) to manage demand and profits.