Demand slump fuelled by Trump tariffs hits US ports and air freight

Donald Trump’s trade war with China is beginning to ripple across the broader US economy, with container ports and air freight operators reporting sharp drops in shipments coming from China.

Logistics firms said container bookings to the US have plunged since Washington introduced 145 per cent tariffs on Chinese imports.

The Port of Los Angeles — the primary gateway for goods from China — is forecasting that scheduled arrivals during the week starting May 4 will be down by a third compared to a year ago. Airfreight managers are also seeing steep declines in bookings.

By mid-April, bookings for standard 20-foot containers from China to the US were down 45 per cent from the previous year, according to container tracking firm Vizion.

John Denton, secretary-general of the International Chamber of Commerce, said the disruption to China-US trade reflected businesses “kicking decisions down the road” as they awaited clarity on whether Washington and Beijing could strike a deal to ease the tariffs.

A survey of ICC members in over 60 countries, conducted after Trump’s April 2 “liberation day” tariff announcement, found broad expectations that global trade would face lasting impacts regardless of how negotiations unfold.

Denton said the cost of entering the US market would be the highest since the 1930s, adding that businesses were coming to terms with a baseline tariff of around 10 per cent even amid broader uncertainty.

Both Washington and Beijing appeared to be feeling the pressure, with each side announcing some tariff exemptions this week for critical goods, and Trump predicting that the 145 per cent tariffs would be “substantially reduced.” However, China said Friday that it was not in negotiations with the US.

As the first wave of container shipments affected by the tariffs arrives in the US in the coming days, freight operators said supply chains are adjusting.

Nathan Strang, ocean freight director at US logistics firm Flexport, said many companies were holding off on shipments while waiting to see if a deal could soften the tariffs.

US importers are reportedly working through existing inventories before ordering new goods from China, logistics executives said. Some are storing stock in bonded warehouses — allowing them to defer taxes — or diverting shipments to nearby countries like Canada.

“They’re sitting on goods at origin, sitting on goods at destination,” Strang said, cautioning that shipping rates could spike sharply if a tariff deal is reached.

Hapag-Lloyd, one of the world’s largest container shipping lines, said Chinese customers had canceled about 30 per cent of its China-origin bookings.

Taiwanese shipping company TS Lines, listed in Hong Kong, has recently suspended one of its Asia-to-US west coast services. “Demand just isn’t there,” a company source said.

The decline in orders has been felt at the Port of Los Angeles, according to shipping analytics firm Sea-Intelligence, which reported a surge in “blank sailings” — canceled trips from China.

Nearly 400,000 fewer containers are booked on Asia-to-North America routes over the four weeks starting May 5 compared to original plans — a 25 per cent drop from schedules set in early March before the tariffs.

The Port of Los Angeles alone expects 20 blank sailings in May, accounting for more than 250,000 containers — up sharply from six cancellations in April.

This marks a stark shift from this week, when arrivals had actually been 56 per cent higher year-on-year — a result of companies rushing shipments from other Southeast Asian manufacturing hubs like Vietnam and Cambodia, which have a 90-day tariff reprieve.

Container prices are reflecting these shifts, according to data from Freightos. Prices for 40-foot containers from Vietnam to the US have climbed 15 per cent, while rates on major China-US routes have fallen 27 per cent.

“Rates from other Asian countries to the US may continue to rise ahead of the July tariff deadline,” said Judah Levine, head of research at Freightos.

Airfreight volumes have also dropped sharply, according to the US Airforwarders Association, with members’ bookings from China falling around 30 per cent.

“Many members have simply stopped getting orders from China,” said executive director Brandon Fried. He added that constant news from the White House was creating a “whipsaw effect” on pricing and bookings.

The industry could face further hits from Washington’s move to close the “de minimis” rule, which had allowed goods worth under $800 to enter the US tariff-free — a key route for e-commerce players like Shein and Temu. Chinese goods will lose that exemption starting May 2.

Lavinia Lau, chief commercial officer of Hong Kong’s Cathay Pacific — where cargo accounts for about a quarter of revenues — said the airline expected weaker demand on China-US routes because of the tariffs and de minimis rule changes.

Freight forwarder Easyway Air Freight said its business from China to the US dropped by roughly 50 per cent after the tariff hikes.

Executives in e-commerce noted a noticeable slowdown. Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, said: “We are seeing significantly fewer price quotation requests for air shipments.”

Although stockpiling and shifting supply chains have so far cushioned US consumers from the worst of the freight slump, transport companies and retailers are beginning to feel the pressure.

Arizona-based Knight-Swift Transportation, one of America’s largest trucking firms, warned of lower expected volumes, citing uncertainty driven by the tariff threats.

Chief executive Adam Miller said some of the company’s major customers had raised concerns that tariffs would drive down volumes in May.

“Some have told us outright that they’ve canceled or paused orders, particularly from China, and are working out how to rework supply chains to dodge the costs,” he said.

Retail consultants said purchasing patterns were starting to reflect three straight months of weakening consumer sentiment.

John Shea, chief executive of Momentum Commerce — which helps brands sell about $7bn annually on Amazon — warned of a looming “double whammy” of rising prices and weakening consumer demand.

“We’re seeing signs of consumers trading down even as prices continue to inch upward,” he said.