The new round of tariffs the United States announced against some of its largest trading partners is expected to expedite the relocation of factories, especially from China, the world's largest factory, to countries in South and Southeast Asia.

HSBC said in its latest Global Freight Monitor that tariffs are expected to "reshape global trade flows."

On March 6, President Donald Trump paused the 25% tariffs on most goods from Canada and Mexico until April 2, but steel and aluminum tariffs are still set to take effect on March 12.

Meanwhile, an additional 10% tariff on Chinese goods began on March 4, building on February 4's 10% levy.

"While tariffs on Canada and Mexico mainly affect landside logistics, those on China will likely accelerate the relocation of factories to South and Southeast Asia to bypass tariffs, boosting regional trade," HSBC said.

It added that retaliatory tariffs may also "further disrupt trade, raise inflation, and dent demand."

The Shanghai Containerised Freight Index (SCFI), which gives a general overview of container freight rates from China, was down 5% week over week.

The HSBC analysis also cited reports that in the first round of Transpacific (TP) contracts, negotiation carriers have sought 20-30% year-on-year (y-o-y) higher rates, equating to US$2,000/FEU to US West Coast and US$3,000/FEU to the East Coast.

"Carriers are negotiating with smaller BCOs (beneficial cargo owners) first to set a price floor and leverage it in negotiations with larger retailers," it said, adding that Linerlytica reported that MSC, the Ocean, and Premier alliances are also withdrawing capacity in Transpacific and Asia-Europe to counter slumping spot rates.

"We think liners could remain profitable in 1H25 with higher contract rates and uncertainties in Red Sea return," the HSBC analysis said.

Meanwhile, the Baltic Air Freight Index (BAI) edged down 0.8% w-o-w, with both outbound Hong Kong and Shanghai down 1% w-o-w, as the market maintained a "wait-and-see" stance on higher tariffs and new trade frictions between China and the US.

"Dimerco Express warned that Europe is joining the US to scrap duty-free access for low-value shipments from China, which could further reduce air cargo demand but accelerate the modal shift to ocean from air," the report said.