Amid escalating tensions in US-China trade relations, the shipping industry has become the early battleground in the economic arena. Following the US imposing tariffs as high as 145% on Chinese goods, container shipments from China to the US have seen a significant decline, leading to major shipping companies around the world reducing vessel sizes and canceling routes.
The latest data on shipping and manufacturing industries indicate that the new round of trade confrontation is significantly impacting China’s export-oriented economy. With weakening demand from the US and a heightened atmosphere of corporate caution, China is facing a dual pressure of plummeting exports and declining market confidence, signaling a potential global supply chain adjustment.
Under the impact of Trump’s tariff policies, trans-Pacific shipping is rapidly shrinking. According to The Wall Street Journal, the world’s top five container shipping operators have reported a sudden decrease of at least one-third in booking volumes from China to the US West Coast.
These major players have indicated that while flights have not been completely canceled yet, they are beginning to replace larger vessels capable of carrying up to 18,000 twenty-foot equivalent units (TEUs) with smaller vessels able to carry a maximum of 14,500 TEUs.
The world’s second-largest container shipping company, Maersk, also known as the Maersk Group, has stated: “As the market evolves, we will continue to optimize route configurations, for example, replacing large vessels with smaller ones to better meet the actual needs of the current China-US routes.”
At the same time, smaller shipping companies have begun canceling routes. According to information from shipping brokers in Singapore and London, around 24 flights from China to the US West Coast have already been canceled in May alone.
The main gateway port on the US West Coast, the Port of Los Angeles, has also confirmed this trend. Gene Seroka, the port’s executive director, stated that container volumes expected to arrive this week are projected to decrease by 30.4% compared to the previous week, with 17 planned flights for May already being canceled.
Following the US imposing a 145% tariff on Chinese goods, the Chinese authorities have also announced retaliatory tariffs of up to 125% on certain US products and have implemented restrictions on the export of key minerals.
After the tariff measures from both the US and China came into effect, the restructuring of the trans-Pacific supply chain has already begun to affect global logistics and economic expectations.
The shipping intelligence platform Linerlytica informed its clients this week: “China’s shipping volume is extremely weak, with a drop of up to 50%. The increase in shipments from Southeast Asia to the US is not yet sufficient to offset the overall gap in the trans-Pacific routes.”
The Baltic Exchange, which measures global shipping costs, stated that the situation in the shipping industry is reminiscent of the early days of the pandemic.
The organization mentioned, “Importers are relying on existing inventories and US bonded warehouses to try to weather this wave of tariff impact.”
Bonded warehouses are facilities where imported goods can be temporarily stored without paying duties, commonly used by importers to mitigate market fluctuations and delay tax payments.
With China’s sharp decline in exports to the US, concerns have arisen about potential shortages of goods in the American consumer market. In response to this, President Trump, after a cabinet meeting on Wednesday, told reporters that he is not overly concerned.
When asked about potential shortages on store shelves, Trump said, “You know, some people say, ‘Oh, the shelves will be empty.’ Well, maybe children will have two dolls instead of 30. Maybe those two dolls will be a few dollars more expensive.”
However, Trump emphasized that many of the goods China sells to the US are not essential products for Americans. He stated, “Their ships are coming over, and they’re full of things that we—I’d say not all, but many of which—we don’t need at all. What we need is a fair deal.”
He further remarked, “We’re being exploited by every country in the world, but China, I would say, is the most abusive of all, the most exploitative.”
According to data from the US Trade Representative’s Office, in 2024, the US imported a total of $438.9 billion worth of goods from China, while China only purchased $143.5 billion worth of goods from the US during the same period.
When asked about his plans to speak with Chinese leader Xi Jinping, Trump emphasized that eventually, the Chinese side will have to negotiate with the US because the tariffs are putting immense pressure on the Chinese economy.
“Would [I] speak to them? Yes,” Trump said. “I’ve always said, they’ll have to negotiate because right now they’re hurt very badly by the business that they don’t have.”
Under the impact of tariffs, China’s export-oriented economy, which relies on exports to drive growth, is rapidly facing external pressures. According to official and private data released earlier this week, China’s April export orders have significantly declined, and overall manufacturing activities have turned to contraction.
On Wednesday, the latest data jointly released by the Chinese National Bureau of Statistics and the China Federation of Logistics & Purchasing (CFLP) revealed that the Purchasing Managers’ Index (PMI) for manufacturing, a leading indicator of economic activity, dropped below the pivotal 50-mark to 49.0, hitting the lowest level in 16 months and significantly lower than the market’s estimate of 49.8.
Another private survey released in cooperation between Caixin and Standard & Poor’s showed that the manufacturing PMI dropped from 51.2 in March to 50.4 in April, nearly entering the contraction zone.
If the downward trend in exports and manufacturing persists, internal employment and local economies in China may face further pressure.
Analysts believe that the softening of exports is closely related to the tariff increases. Huang Zichun, a Chinese economist at Capital Economics, pointed out, “The sharp drop in the PMI may slightly overestimate the short-term impact, but it still shows that the Chinese economy is under pressure as external demand cools.”
Wang Zhe, an economist at the Caixin Insight Group, analyzed that in April, China’s manufacturing sector saw a slowdown on both supply and demand ends, with exports being constrained, marginal contraction in employment, accelerated destocking by enterprises, logistics delays, and a significant decline in market confidence.
Last week, the International Monetary Fund (IMF) also warned in its latest outlook that the global economic outlook is deteriorating, and the growth risks in China have significantly increased.
Capital Economics forecasts that China’s GDP growth for the full year of 2025 may only reach 3.5%, far below the official target of “around 5%.”