The recent U.S.-China trade truce, announced in Geneva, has temporarily halted escalating tensions. As part of the agreement, both sides are rolling back steep tariffs for a 90-day window to facilitate renewed negotiations.
U.S. tariffs on Chinese goods have been slashed from 145% to 30%, while China’s tariffs on U.S. imports have dropped from 125% to 10%. This deal marks a significant shift—from near-embargo conditions to a phase of cautious optimism.
However, for shippers, this reprieve comes with a caveat: freight rates are expected to surge as importers rush to capitalize on the short-lived opportunity. Here’s what you need to know to navigate the turbulence.
Freight Rates Climb as Importers Race the Clock
The tariff rollback has triggered a race against time. Importers rush to clear backlogs and place new orders, pushing up demand for ocean freight.
Freight rates continue to rise and will likely spike in the coming weeks. In China, container shortages are emerging as factories ramp up exports. In the U.S., the availability of trucks and intermodal chassis is tightening, particularly at ports like Long Beach. Domestic trucking costs also trend upward, with increases expected by mid-summer, mirroring the capacity crunches seen in late 2021.
For instance, a Midwest-based retailer recently reported a 15% jump in container rates from Shanghai to Los Angeles. This upward trend may accelerate as the 90-day window closes.
Major importers with strong carrier relationships, such as leading electronics companies, often secure priority access to limited containers and chassis. In contrast, smaller businesses face delays and rising costs.
Lock in contracts early to stay competitive. One small apparel brand avoided a 20% rate hike last month by pre-booking capacity with ASLG Forwarder.
Global Markets Breathe Easier
The truce has lifted investor confidence. S&P 500 futures rose by 2.6%, and oil prices climbed over $1.60 per barrel, as markets welcomed the de-escalation of a potential trade war threatening $660 billion in annual U.S.-China trade.
U.S. Treasury Secretary Scott Bessent highlighted the shared objective: “Neither side wants decoupling. We’re after fair trade.” China’s Ministry of Commerce echoed this sentiment, calling the agreement “a win for global consumers and producers.”
Act Now to Stay Ahead
With tariffs temporarily reduced, the window to act is narrow. Waiting too long could mean higher freight costs and limited capacity. Take a cue from a Texas-based auto parts supplier who expedited orders last week, locking in container space at pre-surge rates.
By acting swiftly and using data-driven tools, businesses can take advantage of this window without getting swept away by the coming surge.
How ASLG Can Help
Successfully navigating this volatile shipping landscape requires agility, foresight, and the right partner. ASLG offers tailored freight solutions for such moments.
Their real-time analytics platform helps businesses monitor rate trends and secure capacity before shortages take hold. Furthermore, ASLG’s flexible carrier network ensures that every shipper isn’t sidelined in favor of high-volume clients.
Contact ASLG today to secure space, lock in rates, and optimize your logistics during this critical 90-day window.
