The last-minute agreement between the US and China to ease tariffs for 90 days has caught shipping lines off guard, triggering a rush to readjust Transpacific capacity ahead of peak season demand.
According to analysis from Sea-Intelligence, the market may now face short-term volatility as carriers race to respond to the tariffs change.
The unexpected truce includes sharp tariff reductions—down to 30 per cent from 145 per cent on the US side, and from 125 per cent to 10 per cent on China’s—but crucially, the tariffs are not removed entirely.
Additional duties, such as the US’s 25 per cent tariff on steel and aluminium, remain in place, leading to what Sea-Intelligence refers to as only a “partly” pause.
READ: Transpacific capacity drops 5 per cent YoY in April/May
Sea-Intelligence reports that in recent weeks, carriers have been pulling back Transpacific services in response to declining bookings attributed to earlier tariff levels. But the last-minute shift now presents an operational challenge: a surge in pre-cut-off shipments is likely, and peak season cargo will need to move no later than mid-July to meet the 14 August deadline.
In its latest Sunday Spotlight, Sea-Intelligence notes that carriers have yet to respond with any substantial injection of capacity to the North America West Coast. Conversely, some capacity growth is starting to emerge on the East Coast routes, though this remains limited and potentially too late to capture the expected spike in demand.
Weekly data comparisons between 9 and 16 May for the period covering 12 May to 21 July show continued year-on-year capacity reductions across both coasts.
A meaningful uplift on the West Coast only appears from mid-July, with the East Coast seeing signs of recovery slightly earlier, from the end of June.
“This is still very late for a capacity increase, if there is an imminent surge of cargo from China,” Alan Murphy, CEO of Sea-Intelligence, cautioned.
Read our latest piece on how over half of US retailers surveyed by Allianz plan to raise prices in response to rising tariff costs. The study—covering 4,500 firms across nine countries—revealed that 54 per cent of US businesses expect to pass these costs onto consumers, with just 22 per cent prepared to absorb them.
