After the United States and China agreed to a 90-day truce in the tariff war, the suppressed demand exploded, resulting in a significant increase in the volume of Chinese goods, the Wall Street Journal (WSJ) reported on the 25th (local time).
According to a WSJ report citing supply chain data collection company Vizion, the weekly container reservations from China to the Americas following the agreement to significantly reduce tariffs imposed by both countries on the 12th were 2.29 million TEU (1 TEU = 1 twenty-foot container), more than double the previous week's figure of 910,000.
Trading companies have started competing to secure containers to bring Chinese products to the United States. Shipping companies have reduced operations on routes from China to the Americas since the escalation of the U.S.-China tariff war, resulting in a shortage of shipping capacity for container ships. Some shipping companies have either replaced the ultra-large container ships deployed on routes from China to the Americas with smaller vessels or canceled the routes entirely.
In addition, freight rates for containers are also rising rapidly due to the shortage of shipping capacity. According to Shanghai Shipping Exchange (SSE) data, the freight rate for a 40-foot container from China to the U.S. West Coast jumped by 10% within a week after the announcement of the tariff agreement on May 12.
However, the prevailing outlook is that the 'surprising rebound' in orders for Chinese products may not continue sustainably. Niels Rasmussen, chief analyst at BIMCO, the world's largest shipping owners' association, analyzed, "Even if there is a tariff suspension, it is questionable whether that will suddenly lead to a surge in volume." He noted that the uncertainty surrounding tariff policies remains significant, and U.S. consumer sentiment is rapidly deteriorating, leading companies to adopt a cautious stance on significantly increasing new orders.
Moreover, the 90-day grace period is a short time for many industries to receive products after placing new orders. Vincent Ambrose, chief commercial officer (CCO) of FranklinWH Energy Storage, which has manufacturing plants in China, stated that manufacturing and delivery typically take 12 weeks, saying, "There are effectively no opportunities to urgently bring in many products." Although the Trump administration provisionally lowered the tariff rate on Chinese imports from 145% to 30%, this is still considered a very high level, also impacting the negative outlook.