Peak season may have already peaked as Trump tariffs darken outlook
AMERICA’S “Liberation Day” reciprocal tariffs were supposed to snap back into place on Wednesday, but they’ve been delayed until August 1. The “TACO” trade (Trump Always Chickens Out) has struck again.
US importers still don’t know how much they’ll pay at the border, when that will change, or whether tariff costs will go up or down. They continue to face unrelenting uncertainty, a headwind for US container shipping demand.
“Uncertainty is pervasive,” said Jack Kleinhenz, chief economist of the National Retail Federation, in a report published on Tuesday.
US president Donald Trump has been issuing letters to trading partners in recent days with reciprocal tariff levels effective next month, including a 36% tariff on Thailand, and 25% tariffs on Japan, South Korea and Malaysia, countries that accounted for a combined 12% of US imports measured by value.
“A flurry of tariff-related announcements from the Trump administration has only served to further increase supply chain uncertainty,” said Hackett Associates founder Ben Hackett on Wednesday.
US government revenues from customs duties continue to soar, with that value equating to a tax on US importers. To the extent the import tax is not offset by overseas supplier discounts, it will either reduce margins or be passed along to consumers, fuelling inflation.
“Tariffs are paid by US companies, not foreign countries or businesses,” affirmed NRF vice president for supply chain and customs policy Jonathan Gold.
Import taxes on US companies spiked to $24.2bn in May, up 295% year on year (y/y), according to data compiled by freight economist Jason Miller, a professor at Michigan State University.
Inventories brought into the US before tariffs hit have largely shielded US consumers from inflation so far, but those inventories will run out, which is expected to have negative consequences for the US economy and containerised import demand in 2H25.
“Although there is no clear evidence of tariffs in current prices, it is likely to first appear in the third quarter, which could likely precipitate negative consumption and growth impacts on the economy,” warned Kleinhenz.
Peak season could peak this month
Trump’s tariffs have had a significant effect on US import timing in 2025. Imports were strong before May due to frontloading. They declined in May due to the 145% tariff on China. They rebounded slightly in June due to the reprieve in those tariffs, and are expected to peak this month, then fall back again.
According to Descartes, which uses customs data to track shipments to all US ports, June imports totalled 2.2m teu, up 2% versus May but down 4% y/y.
Import trends lag spot-rate moves. The Shanghai Containerized Freight Index spot-rate assessment for the Shanghai-US west coast route jumped 139% between the week of May 9 (immediately before the China tariff reprieve) and the high in the week of June 6, when rates reached $5,606 per feu.
Since then, rates have plunged by 63% to $2,089 per feu, 11% below rates the week before the tariff reprieve and down 74% y/y.
The outlook for transpacific spot rates is bearish, because the surge in US import bookings that precipitated the recent rate bounce is already over.
Data from Vizion for the latest week (June 30-July 6) shows that US bookings in China are down 39% from the recent high in the week of May 12-18, and are down 18% y/y. US bookings from all import sources are down 22% from May 12-18 and down 12% y/y.
Global Port Tracker, produced by the NRF and Hackett Associates, is predicting a drop-off in US imports starting in August, implying that the traditional peak-season flows will peak this month.
In a new forecast released on Wednesday, GPT predicted that the 13 US ports it covers will handle 2.36m teu in July, up 15% versus June and up 2% y/y.
After that, GPT forecasts that August-November import volumes will be down 18% versus the same period in 2024. Last year’s volumes were boosted by frontloading driven by port strike fears, but GPT’s August-November 2025 forecast is also down 7% versus the same period in 2023, a stretch when freight rates were particularly weak.
China volume decline drives weakness
China tariffs have been the primary driver of container shipping weakness in US trades, although that may change for the worse on August 1 if Trump follows through on threats to raise tariffs on other countries above the current 10% incremental baseline.
The incremental tariffs on China have been lowered from 145% to 30%, but that is on top of existing levies. Various estimates put average total US tariffs on China at anywhere from 40% (according to Evercore ISI) to 55% (according to Trump).
Miller’s analysis of US government data shows that calculated duties on China imports represented 48% of the dutiable value in May, compared to a global average of 9%.
Vizion’s data, which covers only a portion of the market, shows a 106,718 teu decline in weekly US bookings in China between May 12-18 and June 30-July 6, and a decline of only 90,280 teu over the same period for all US import bookings, including China.
Descartes’ data shows that monthly volumes from China in June were 338,609 teu below imports in January, a decline of 34%, whereas total US imports declined only 11% or 269,795 teu over the same period. US imports from China in June were down 28% y/y.
China’s share of total US teu imports has fallen from 40% of in January to just 29% in June, according to Descartes.
The ominous question for 2H25 container shipping demand is what happens on August 1, if Trump raises some of the reciprocal tariffs on other countries?
As of Wednesday, the proposed numbers were more than double current levels, and there was an explicit threat to hike them further if countries retaliated. Market participants remain uncertain on whether the higher tariff rates will actually be implemented, or whether this will be yet another TACO event.
“The global supply chain functions best in a trade environment that is smooth and predictable. Instead, it has been forced to contend with erratic policies and geopolitical volatility,” said Hackett.
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