Freight Rates Explode as US-China Tariff Rollback Triggers Early Shipping Peak

US-China Tariff Rollback Sparks Early Peak Season for Ocean Freight, Driving Rates Sky-High
The recent tariff truce between the US and China in May 2025 has ignited a significant surge in transpacific ocean freight demand, pushing shipping rates dramatically higher and kicking off the peak season earlier than expected.
Tariff Relief Fuels Immediate Rebound

Following a period of subdued activity caused by earlier US tariffs, the mutual rollback of reciprocal tariffs (down to 30% for US imports from China and 10% for Chinese imports from the US) effective May 14, 2025, immediately revitalized trade flows. The Freightos Baltic Index for a 40-foot container saw a 3.8% month-on-month increase to USD 2,123.76 in May.
Specifically, the China/East Asia (C/EA)-North America (NA) route averaged USD 2,546.60 per 40-foot container in May, an 8.59% month-on-month rise. This upward trend intensified in early June:
Asia-US West Coast (WC) rates soared by 98% week-on-week to USD 5,488 by June 10.
Asia-US East Coast (EC) rates climbed by 61% week-on-week to USD 6,410 by June 10.
Importers Frontload Ahead of Looming Deadlines
This sharp increase signals an early start to the peak shipping season, largely driven by importers rushing to move goods. They're looking to beat proposed US tariff hikes on certain countries (like the EU, Japan, and South Korea) in July 2025 and the expiration of the US-China tariff rollback agreement in August 2025. In response to this surging demand, carriers are planning additional General Rate Increases (GRIs) of USD 1,000 to USD 3,000 per 40-foot container for mid-June and July 1, expected to further inflate rates.
Capacity Tightens Amid Port Backlogs and Redeployment Delays

Despite the demand rebound, capacity remains constrained. Chinese ports are likely still processing backlogs from the April-May slowdown, and vessels and equipment temporarily moved to other routes during that lull are still returning. This combination of rising peak season volumes, ongoing equipment repositioning, and persistent port congestion in key Far East hubs is tightening capacity and fueling the anticipated rate increases for June and July.
US Ports Brace for Volumes, But Cautious Outlook Remains
US ports are preparing for an anticipated surge in inbound containers. Projections suggest US ports will handle 2.01 million 20-foot containers in June 2025, a 5.24% increase from May. While this marks a recovery from the significant May decline (due to earlier tariffs), June and July shipments are still expected to remain below 2024 levels. July 2025 is forecast as the peak month with 2.13 million 20-foot containers, but this is still 9% lower than the August 2024 peak and 4% below April 2025's strong performance. This more cautious outlook is attributed to earlier frontloading in April and some shippers holding back orders while tariffs are at their temporary minimum.
Global Shifts Impact Other Trade Routes
Rate increases were also observed on other global shipping routes in May 2025,influenced by broader geopolitical and trade dynamics:
C/EA–Mediterranean (Med) routes saw a 4.02% month-on-month increase, driven by ongoing Red Sea diversions and potential impacts from the Israel–Iran conflict.
Europe–South America WC routes jumped by 15.57% month-on-month, possibly linked to Europe's increasing trade focus on South American nations, spurred by agreements like the EU–Mercosur trade deal.
Future Outlook: Volatility and Potential for Deeper Ties
Freight demand is expected to remain high as traders continue to frontload shipments ahead of upcoming tariff deadlines. With capacity under pressure, shipping lines may prioritize higher-value cargo, potentially leading to delays for lower-priority goods and increased volatility in pricing and reliability.
However, this temporary tariff rollback marks a notable thaw in US-China trade relations, which could pave the way for stronger, longer-term agricultural trade partnerships between Chinese producers and US importers.