us china tradewar

US Tariff Developments and Global Trade Reactions

Apr 9, 2025 | , , , , , , , , , , , , , , , , , , , , , , , ,

Further to our recent update on the major changes to US tariffs (link), the global trade landscape remains highly fluid, with the situation evolving rapidly.

Last Wednesday, 2nd April, President Donald Trump announced a comprehensive tariff strategy, imposing a universal 10% tariff on all imported goods, effective from the 5th April.

Additionally, as of today, 9th April, a second wave of higher “reciprocal” tariffs has been implemented, targeting specific countries with rates ranging from 11% to 50%, based on perceived trade imbalances and barriers. Notably, China which now faces a tariff rate of 104% on its exports to the US, combining previous and new duties.

The UK, Australia, Indonesia, Singapore, Vietnam, and Taiwan have confirmed they will not introduce countermeasures at this stage. Notably, both Vietnam and Taiwan have expressed willingness to negotiate with the US and explore zero-tariff agreements.

In contrast, China responded with retaliatory tariffs of up to 34% on US goods, which has seen President Trump follow through with his threatened escalation of an additional 50% duty on Chinese imports. As a result, US importers now face an unprecedented degree of uncertainty around landed costs.

The European Union has proposed a zero-tariff arrangement on autos and industrial goods, which was rejected by the US. So far, the EU’s potential response appears limited to steel and aluminium, though speculation persists around broader negotiations and potential shifts in trade policy.

This environment puts US importers in a difficult position: ship now and risk overpaying if tariffs are reversed, or delay and risk facing even higher costs if further duties are imposed. Many are opting to pause shipments where possible, disrupting vessel utilisation, bookings, and spot market rates.

Early indicators suggest the impact on global logistics is already being felt. Sea freight container bookings into the US from China have dropped a massive 67% in the past 7 days compared to the week prior, with export bookings also down 40%. If these figures are anywhere near accurate, this marks an extremely large and immediate disruption to trade flows into the US.

If this slowdown continues, significant blank sailings from the carriers are inevitable, and signs of this are already emerging. Yesterday, Ocean Network Express (ONE) announced that the Premier Alliance PN4 Pacific service, scheduled to begin in May, has been suspended until further notice—an early indication of broader cancellations to come.

There are several mechanisms that can be utilised to temporarily avoid duties for exports into the USA including Free/ Foreign Trade Zones, customs regimes, bonded facilities, temporary import bonds (TIB’s), carnets and more. There are options to carry on shipping goods to USA and not clear them until it is absolutely clear whether commodity tariff rates will be reduced or withdrawn as, or if, deals are agreed between countries.

From an objective standpoint, it remains unclear what concessions the US is seeking in exchange for easing these tariffs, particularly since the justification of “tariffs imposed on the US” lacks clarity in many cases.

For shippers and carriers the coming days and weeks will require vigilance and adaptability. The tariff landscape may shift dramatically and without warning, both upward and downward.

We continue to monitor developments closely and will issue further updates as more information becomes available, particularly concerning potential EU countermeasures and UK trade policy responses.

If you would like to review your specific supply chain impact, assess your exposure, or explore strategic alternatives, please don’t hesitate to get in touch. Metro is well-positioned to support you, bolstered by our expanded US presence and strong focus on North American trade flows.

Expect further insights in the coming days as the situation unfolds and if you have any questions please give me a call, or drop a message, and we will ensure that you receive immediate attention and advice.

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Uncertain Waters: Securing Ocean Freight Rates

Apr 2, 2025 | , , , , , , , , , , , , ,

While there’s talk in the market about further pressure on rates, the reality is more complex, with container spot rate indices showing mixed signals last week, suggesting that any softening on key east-west routes might not last.

The global supply chain remains unpredictable, and several factors are still keeping the container market tight, which means any short-term dip in rates could quickly reverse, making it risky to assume that prices will continue to ease.

Carriers Act to Support Rates
Shipping lines are actively removing capacity from major east-west trades to reduce supply and put upward pressure on pricing. According to Drewry’s, 68 sailings across the Pacific, Asia-Europe, and Transatlantic trades have been blanked between this week and the end of April, while Sea-Intelligence data reports 47 blank sailings in the same period.

While methods of tracking blank sailings may vary, particularly as the major alliances transition between old and new service structures, the trend is clear; carriers are taking deliberate action to support General Rate Increases (GRIs) and stabilise the market in their favour.

Charter Market Dynamics Are Holding Rates Firm
While spot pricing may hint at a softer market, the time-charter sector continues to show strength. Many non-operating shipowners are keeping older, fully paid vessels in service, since they remain profitable even at lower margins.

This keeps theoretical capacity high but delays any significant correction in long-term charter rates, providing a buffer of rate stability for carriers. Basically the return is greater to ship owners to work the aging vessels in the current market than to scrap them. However once the charter rates diminish as freight rates are not at sustainable levels to support higher charter rates then scrapping vessels becomes more profitable and the supply of capacity will be eroded.

This willingness to keep tonnage in play – rather than scrap it – creates a layer of structural overcapacity. But crucially, it also delays any meaningful correction in longer-term charter costs, which in turn supports rate stability for shipping lines.

Shippers on the Asia-Europe trade lane should be particularly alert. With the traditional peak season approaching and transit times still extended due to Red Sea routing changes, demand could pick up sooner than expected, just as it did in 2024, when European importers advanced bookings to avoid delays.

Utilisation remains relatively high, and the market is only one or two strong booking weeks away from tightening significantly. Once that happens, space could quickly become constrained and prices may respond accordingly.

Congestion, Reliability and GRIs
At the same time, much of the market’s theoretical capacity isn’t actually accessible. Port congestion continues across Europe, including Antwerp, Hamburg, Rotterdam, and Le Havre, with yard occupancy levels of 75–90%, disrupting container flows and delaying vessel turnarounds.

Conditions are similar in Asia. Shanghai is experiencing delays due to fog and vessel bunching, while Singapore and Port Klang are seeing large backlogs and productivity slowdowns. Globally, schedule reliability remains under 55%, and with new carrier alliances still in rollout mode until July, disruption is likely to persist.

This operational friction reduces effective supply, keeping pressure on rates and creating risk for those waiting to move goods last-minute.

The container shipping lines have begun applying General Rate Increases (GRIs) and surcharges in recent weeks to stabilise rate levels in key corridors. While results may vary, these moves signal a clear intent to maintain pricing discipline, particularly as demand indicators begin to shift.

In an environment where schedule reliability is poor, congestion is high, and demand could rebound with little notice, waiting for rate relief may come with unintended consequences.

Certainty Beats Volatility
Shippers looking to avoid surprises would be well advised to fix rates where possible—because securing capacity and cost visibility offers valuable protection in a market that remains anything but predictable.

Freight markets can shift quickly, and when they do, the cost of waiting may outweigh any potential benefit. Fixing rates now delivers stability, security, and peace of mind in today’s volatile environment.

Our fixed-rate agreements act as a practical safeguard against market swings, offering predictable costs to support confident budgeting and planning.

Whether you’re managing high-volume trade lanes or simply seeking greater control over your supply chain, we’re here to help you stay ahead in 2025.

EMAIL our Managing Director, Andy Smith, to learn how we can support your business today.

Savannah Port

Shipping at Risk from $1.5M Port Charge

Apr 1, 2025 | , , , , , , , , , , , , ,

To combat China’s dominance in shipbuilding and revive the US maritime sector, a sweeping proposal from the Trump administration to penalise container ships built in China has sent shockwaves through the global shipping industry. The policy would levy up to $1.5 million per port call on Chinese-built or Chinese-operated vessels entering American ports. 

The scale and scope of these potential fees have alarmed the world’s largest container shipping lines, who warn that the move could disrupt global supply chains and dramatically increase costs for shippers and ultimately consumers.

China has become the undisputed powerhouse of global shipbuilding, accounting for over 80% of all newly built container vessels. The largest ocean carriers — including MSC, Maersk, CMA CGM, and Hapag-Lloyd — have heavily invested in Chinese shipyards due to their cost-efficiency, financing advantages, and output capacity. For instance, MSC, the world’s largest carrier, has 24% of its fleet built in China, with 92% of its order-book also tied to Chinese yards. Maersk and CMA CGM show similar reliance, with well over half of their future tonnage scheduled from China.

The proposed fees would apply not only to Chinese-owned carriers like COSCO, but also to foreign lines that have Chinese-built vessels in their fleets or on order. This has drawn strong opposition from the industry, with MSC CEO Soren Toft warning that the policy could add between $600 and $800 to the cost of moving a single container.

That cost, he stressed, would either have to be absorbed by carriers, prompting a withdrawal from US trades, or passed down the supply chain to cargo owners and consumers.

To avoid the financial hit, carriers may consolidate services, eliminating calls at smaller ports and serve only major hubs. This will inevitably create congestion at the terminals and strain inland transport, as containers pile up in fewer locations lacking the right mix of trucks, chassis, and rail capacity.

Reduced carrier capacity, port consolidation, and higher operational costs will all converge to drive prices up. As Andrew Abbott, CEO of ACL, put it bluntly, the plan “would cause a freight rate explosion that would dwarf the COVID-era increase.”

US Trade Representative (USTR) Hearings
The policy has mobilised intense opposition, with over 500 submissions made to the USTR, and dozens of executives testifying at public hearings in recent weeks. Alternative mechanisms such as phased implementation, tiered fees based on vessel type or service region, or per-container charges instead of flat port call levies have been proposed, with the USTR’s final proposals due later in April.

The Trump administration argues that these measures are necessary to rebuild US maritime capacity and ensure national security. But critics note that the US lacks the infrastructure, workforce, and financing mechanisms to quickly scale up shipbuilding, and that domestic vessels are not only four times more expensive to build but also cost double to operate. Even if construction began tomorrow, new ships would not be delivered for years and US exports and imports would suffer in the meantime.

If implemented in its current form, the port fee proposal would reshape global liner networks, drive up transportation costs, and jeopardise the competitive position of US exporters. It may also lead to structural realignments in trade patterns, with cargo diverted to Canadian and Mexican ports, and long-term erosion of US port and logistics competitiveness.

We’re working closely with clients as we monitor regulatory developments, ready to react and adapt container shipping strategies in real time. If your supply chain depends on US port access, now is the time to assess your exposure and prepare contingencies.

EMAIL our Managing Director, Andrew Smith, to learn how we can protect your network, manage cost risks, and keep you competitive — no matter how the tide turns.

Bridge on ship

Sea Freight Market Review

Mar 18, 2025 | , , , , , , , , , , , , , , , , , , ,

The global ocean freight market is undergoing a period of transition in 2025, influenced by regulatory changes, shifting trade patterns, and evolving carrier alliances. While demand remains strong in key regions, rate volatility persists due to supply chain disruptions and excess capacity.

The ocean freight sector is experiencing considerable adjustments as carriers adapt to regulatory and economic shifts. The EU ETS expansion now covers 70% of maritime emissions, leading to higher surcharges and operational costs for carriers.

Supply/Demand
Capacity growth is projected to slow to 5% in 2025 after record vessel deliveries in 2024. However, supply chain disruptions persist due to global port congestion and ongoing Red Sea diversions are soaking up excess capacity.

The restructuring of major shipping alliances is further shaping the industry landscape, with the dissolution of 2M, the formation of the Premier Alliance by THE Alliance, and the launch of Gemini Cooperation in February 2025.

Proforma scheduled liner capacity on the Asia-North Europe trade is set to be reduced by around 11% once the transition to the new shipping alliance set-up is complete. The combined weekly capacity drop of some 28,000 TEU equates to a total reduction of 221,000 TEU across all services. However, the number of individual weekly sailings between Asia and North Europe is expected to increase from 26 (under the previous alliances and standalone services) to 28, potentially improving frequency and flexibility for shippers.

Global port congestion remains a pressing issue, particularly in China and vessel utilisation remains high, with only 0.2% of the global liner fleet currently idle. The industry is also witnessing an increase in blank sailings, with 47 announced through mid-April, affecting Transpacific and Asia-Europe trade routes. The Transpacific market, in particular, is experiencing notable disruptions, with 43% of blank sailings concentrated in this corridor.

Expectations that Red Sea diversions would ease, returning an estimated 2 million TEU to global circulation, were dampened over the weekend following missile exchanges between the US and Yemen’s Houthi rebels. MSC CEO Soren Toft stated, “Suez simply isn’t safe to transit at the moment, and there’s no immediate prospect of a return.” This continued instability may prolong disruptions and return pressure on rates.

Market
Meanwhile, the Shanghai Containerised Freight Index (SCFI) has dropped 17% since January and despite strong cargo demand in select regions, the market remains vulnerable to downward pricing pressures.

Demand remains resilient but uneven, with North America and India seeing stronger performance, whereas Europe’s slower economic growth is weighing on export activity. Chinese exports have exceeded expectations, driven in part by early shipments ahead of potential tariff adjustments.

The Drewry World Container Index (WCI) has reached its lowest level since January 2024 and while rates are below their pandemic-era peaks they are still 79% higher than pre-pandemic averages from 2019.

At Metro, our fixed-rate agreements on popular shipping routes provide a practical safeguard against rate volatility, offering predictable costs for effective budgeting. Whether you’re managing high-volume trade lanes or seeking greater stability for your supply chain, our tailored solutions can help you thrive in 2025.

To discover how Metro can strengthen your business and provide peace of mind, EMAIL our Managing Director, Andy Smith, today.

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