Tariff-related disruption spreading as US shippers 'pause' plans

The tailwinds that brought a strong increase in US imports and certain exports last year have turned to cold, hard headwinds this year as disruptions caused by the Trump administration’s tariffs take root and multiply.

The shock waves from those tariffs are rippling from ports in Asia and Europe through freight docks deep in industrial America.

The latest shock came from the US Trade Representative (USTR), which said April 18 it will charge entrance fees for China-based ocean carriers and lines operating Chinese-built ships calling at US ports based on cargo capacity or container volume.

Given the chaotic rollout of President Donald Trump’s trade policies, the outlook for the US freight economy in the second half of 2025 isn’t just cloudy — it’s reached a point of uncertainty that is crippling shippers’ ability to plan.

US shippers “are waiting for the dust to settle to determine how tariffs might influence and change their short- and long-term business strategies,” Spencer Frazier, executive vice president of sales at J.B. Hunt Transport Services, said during an earnings call April 15.

S&P Global, the parent company of the Journal of Commerce, in April pulled down its US GDP growth forecasts for 2025 and 2026 from 1.9% in both years to 1.3% and 1.5%, respectively, thanks in part to expectations that tariffs will result in higher inflation.

Although the risk of a recession in the US has diminished, US policy volatility and related economic uncertainties are likely to linger into the year, S&P Global said.

On land, the so-called freight recession that began in 2022, sending trucking and intermodal rates tumbling by double-digit percentages, is entering its fourth consecutive year.

Shippers will maintain pricing power in the truckload and intermodal rail segments in 2025, but they’re also going to make, ship and sell less.

Despite an uptick in truckload spot rates early this year, led by flatbed spot rates, truckload pricing is still bouncing along a bottom it reached in 2023. Less-than-truckload (LTL) pricing has been elevated since the collapse of Yellow in 2023, but volumes remain essentially flat aside from some tariff-driven frontloading.

The question isn’t whether trucking volumes will decline in the second quarter or second half of 2025, but by how much. That may trigger a broader loss of truck capacity.

Blanking and canceling

On the seas, the Trump administration’s multi-front trade war has already led to a drop in shipments, compounding the disruption caused by attacks on shipping in the Red Sea, where the US is escalating attacks on Houthis in Yemen.

Ocean freight rates have fallen steeply in the first four months of 2025. Average spot pricing from Asia to the US West Coast of $2,050 per FEU in the week of April 18 was down 61% from the beginning of the year and 74.8% from its most recent peak in July 2024, according to Platts, a sister product of the Journal of Commerce within S&P Global. Asia-US East Coast spot rates have sunk 53.7% since Jan. 1 and 69.4% from last summer to $3,100 per FEU.

A slew of booking cancellations by US importers is leading ocean carriers to blank more voyages in the eastbound trans-Pacific. Some ships are leaving China half-empty. The scale-back in US-bound imports from China is affecting the entire ocean carrier industry.

“People are canceling and putting cargo [from] China on pause,” a source at a trans-Pacific container line who asked not to be identified told the Journal of Commerce in April.

The broad pause in bookings and orders extends beyond China to other sourcing origins. Amazon, for example, has canceled orders of goods ranging from beach chairs and scooters to air conditioners from Vietnam and Thailand, as well as China, according to a report from Bloomberg.

Retailer Five Below paused orders from China in April as those tariffs escalated, CFO Kristy Chipman told analysts during a March 19 call.

“The breadth and magnitude of the tariffs are significant given that approximately 60% of our total cost of goods are imported from China, either directly or through our domestic vendors,” Chipman said.

Trans-Pacific air cargo traffic, meanwhile, is expected to increase through May 2 as importers rush to beat the end of the exclusion from tariffs for low-value imports. After that final spurt of frontloading, tariffs and the loss of the de minimis exemption for shipments from China and Hong Kong are expected to drag on demand.

Limited blank sailings have been announced on the trans-Atlantic trade in the coming weeks, with just 7,124 TEUs from North Europe to the US East and Gulf coasts scheduled to be withdrawn in May, according to maritime data provider eeSea.

“It seems as if carriers are pushing up capacity to cater for whatever frontloading may be needed by European exporters,” said Peter Sand, chief analyst at rate benchmarking platform Xeneta.

A bubble about to burst

In 2024, containerized US imports jumped 15.3% to 27.7 million TEUs, while exports rose 0.9% to 11.3 million TEUs, according to PIERS, also part of S&P Global. Manufactured goods, machinery and mechanical products and minerals rode atop the wave of imports, spiking 17.6%, 14.8% and 11.4%, respectively.

Goods were still pouring into the US in the first three months of 2025, with container imports rising 9.2% year over year, according to PIERS, but retailers say the import wave is collapsing as the race to beat the US tariffs ends.

The Global Port Tracker report, produced by the National Retail Federation (NRF) and Hackett Associates, forecasts imports to plunge 20.5% in May, 26.6% in June, 27% in July and 26.7% in August.

“At present, we expect to see imports begin to decline by May and that they will drop dramatically during the remainder of the year,” Hackett Associates Founder Ben Hackett said in the April Global Port Tracker report.

The NRF and Hackett project inbound container shipments will fall 20% in the second half from the year-ago period, which would result in a full-year decline of 15% or more, approximately equal to last year’s gain.

Exporters are feeling the effects of tariffs, too, especially those shipping US agricultural and forestry products. China, the largest US market for those products, levied a 125% tariff on them in retaliation for new US tariffs.

Bookings for US exports to China for the week of April 15 were down 5.4% from the prior week at 17,220 TEUs, according to maritime visibility provider Vizion and data and analytics company Dun & Bradstreet.

“In [the] short term, I think we’re going to see a lot of agriculture exporting shift [from China] to other countries,” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in an interview with the Journal of Commerce.

A drop in the value of the US dollar — down about 5% against other major world currencies after April’s tariff announcements — could help exporters sell goods overseas, but retaliatory tariffs and backlash among foreign consumers will likely dampen any currency gains.

Such backlash has already occurred in Canada, where retailers have withdrawn American-made items from whiskey to diapers from their shelves.

Manufacturing losing momentum

Fewer US imports mean fewer intermodal containers moving inland to Chicago or Dallas and fewer truckload and LTL shipments.

But a continued decline in US factory output will have an even greater impact on demand for trucking and rail services. Almost 60% of US truck tonnage is tied to industrial output, according to US Census Bureau data.

North America manufacturing output fell at one of the steepest rates seen in the past two years in March, according to S&P Global, with broad-based production losses in the US, Canada and Mexico. The US Manufacturing Purchasing Managers’ Index (PMI) from S&P Global dropped to 50.2 in March from 52.7 in February and 51.2 in January.

Optimism surrounding the Trump administration and the need to “front run” tariffs buoyed manufacturers in the first two months of the year, but “cracks are now starting to appear,” S&P Global said in its PMI release in April.

The longer trade disputes last, the more US manufacturers will have difficulty finding specific components, including some that are critical to production, said Michael Regan, chief relationship officer at logistics company and shipper consultant TranzAct Technologies, citing Chinese-made magnets used in automotive transmissions as an example.

“These are ‘dirty magnets’ produced from rare earth metals, and China is limiting their export,” Regan told the Journal of Commerce in mid-April. “A company I know has enough inventory to last only through July.”

Resilient, but worried

US consumer spending has been relatively steadfast so far this year, supported by continued wage increases and low unemployment.

US retail sales grew 1.4% month over month in March, the biggest monthly increase since January 2023. Excluding sales of cars and trucks and automotive parts, retail sales only rose 0.5% from February, according to US Census Bureau data.

But those results fly in the face of consumer sentiment. The University of Michigan Index of Consumer Sentiment dropped 11% sequentially in April, its fourth consecutive monthly decline. The Conference Board’s monthly index of consumer expectations dropped 9.6 points in March to 65.2, its lowest level in 12 years and far below the threshold of 80 that usually signals a recession ahead.

Unlike in 2024, the consumer “is not feeling great,” NRF Chief Economist Jack Kleinhenz said in a statement in mid-April, but the NRF still expects US retail sales to rise this year with or without tariffs.

The retailers’ association forecasts retail sales will grow between 2.7% and 3.7% year over year to between $5.42 trillion and $5.48 trillion.

What’s more, there’s no expectation the disputes will end in the near future, and even if they do, damage has already been done that will take time to repair.

The Trump administration’s goals, whether achievable or not, are part of a long-term strategy that is likely to survive weekly or even daily policy flips.

As long as tariff uncertainty and trade wars linger, however, it will be more difficult to find a catalyst that will increase freight demand in the US. That’s pushing hopes for a freight recovery farther into 2026.

Journal of Commerce editors Ari Ashe, Greg Knowler, Bill Mongelluzzo and Laura Robb contributed to this report, along with Research Analyst Cathy Morrow Roberson.

Originally published in the Journal of Commerce, April 21, 2025

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.