Tariff fears — as well as the already significant uncertainty and confusion surrounding the U.S. trade policy — intensified this week as the April 2 deadline for numerous tariff announcements drew near.
The Trump administration indicated that it will narrow the scope of reciprocal tariffs initially proposed for all U.S. trade partners that have tariffs or other trade barriers on U.S. exports or businesses.
Only 15% of the long list of countries with a U.S. trade imbalance and tariffs on U.S. goods will be assigned reciprocal tariffs, but these countries account for most of the US trade deficit and total imports. If reciprocal tariffs are not applied on April 2nd, they are expected to be announced.
Judah Levine, head of research at Freightos said the levels of these tariffs will depend on the foreign tariff rates for U.S. exports and so will vary, but the list of the top 15% – aside from China, Mexico, Canada and the E.U. – includes ostensible alternative sourcing partners like India and Vietnam as well.
And though some reports indicated that certain planned sectoral tariffs would be postponed, President Donald Trump stated that global duties on automotive and pharmaceutical imports would be announced soon, possibly even before April 2.
The president also signed an executive order on Monday that, effective April 2, will apply 25% tariffs — on top of any other applicable tariffs — on all goods from any country that purchases oil from Venezuela.
In addition to China, this list could include Singapore, Vietnam, and India.
Finally, the USTR's public hearing on its proposed significant port call fees targeting Chinese-made vessels is underway, with American BCOs, exporters, port labor and ocean carriers all objecting to the rule and the significant threats it would pose to their respective businesses.
"Recently heightened fears of steep U.S. tariffs on imported alcohol from the E.U. on April 2, were enough for the U.S. Wine Trade Alliance to advise members to stop all shipments," Levine said.
"But despite the April deadline for many other possible tariff announcements, demand indications suggest that, overall, U.S. shippers continue to frontload due to the uncertainty of what and when tariffs will be implemented," he added, noting that this pull forward is reflected in the recent build-up of empty containers in the Ports of Los Angeles and Long Beach.
Transpacific demand up, rates continue to slide
In its recent analysis, Freightos said Transpacific ocean container rates have eased as demand has decreased relative to the pre-Lunar New Year rush. But despite volumes estimated to be significantly stronger than a year ago due to continued frontloading, rates have continued to slide.
At about US$2,200/FEU to the West Coast and US$3,300/FEU to the East Coast, Freightos noted that these prices on these lanes are more than 20% lower than their 2024 lows.
Levine said the likely culprits of this trend are the increased competition and less effective capacity management resulting from the new carrier alliance rollouts, as well as continued fleet growth.
In air cargo, a March 20 Heathrow electrical fire kept the airport closed for eighteen hours, canceling more than a thousand flights, and though there were moderate air cargo rate increases to alternative destinations in the days following, there have been few reports of significant resulting disruptions.
Freightos Air Index rate data also shows that ex-China prices to the U.S. have rebounded by about 15% since earlier this month to more than US$5.25/kg, and to Europe rates have increased by more than 20% to nearly US$3.90/kg.
"The China - U.S. rate recovery comes despite anticipated changes to de minimis rules that are expected to cause a significant drop in e-commerce volumes, with some reports that carriers are already gradually shifting capacity to other routes," Levine said.
