Summary:
- A 400% increase to blank sailings from China to the United States has occurred since liberation day tariffs were passed, but schedules show this levelling out in June. This could change based on the ongoing low export volumes.
- Blank sailings from China to the U.S. in April increased by 47% compared to March and are up nearly 40% compared to April 2024.
- Imports from China to the U.S. have been higher compared to last year, possibly illustrating pull forward inventory, but have fallen for four consecutive weeks by over 30% compared to 2024.
- Despite a 5% increase in exports from the U.S. to China last week compared to 2024, this number has decreased for a second consecutive week and is trending 30% lower than last year.
- New emerging shipping trends show a 100% increase in air freight out of Singapore. Canada has not definitively emerged as widespread for workaround for tariffs yet with shifting volumes.
Overview
On April 9th, former President Donald Trump postponed nearly all the “Liberation Day” tariffs, except for the 10% baseline tariff and the highest rate on the list—China. As of April 9th, Chinese imports to the U.S. are subject to a 125% tariff. This is in addition to the 20% tariffs implemented earlier this year, bringing the total tariff on Chinese goods to 145%. This means a product that previously cost a U.S. company $100 to import now costs $245.
The Trump administration did make an exception for electronics imported from China, which account for about 25% of all Chinese imports. These are not included in the additional 125% tariff, but it has been stated that there will be additional tariffs on this industry in the future.
In retaliation, China has imposed a 125% tariff on U.S. imports, significantly increasing the cost for U.S. suppliers competing in the Chinese market.
U.S. imports and exports from China
Imports
When tariffs increase, U.S. companies often look to diversify their sourcing options. Over the years, many businesses have reduced their dependency on China, a trend accelerated by the COVID-19 pandemic and resulting supply chain disruptions. The chart below compares recent weeks of imports from China to the U.S. with the same period last year.
As the chart shows, imports from China have remained stable up until the 125% tariff was passed, indicating that U.S. companies began altering their ordering strategies. Companies have been quick to pivot their sourcing strategies as imports from China slow. The week of 4/28 marks the fourth consecutive week in a decline of imports from China, with more than a 30% decline compared to April 2024. Industries with more competitive global options will likely see a downward trend in orders from China going forward. There are also new strategies emerging that involve Chinese companies shipping goods to other nations prior to being imported to the U.S. to avoid the staggering tariffs on Chinese goods.
Exports
In response to the U.S. tariffs, China has imposed its own tariffs on U.S. imports. The chart below shows changes in U.S. exports to China so far this year compared to the same time last year.
U.S. exports to China have decreased quickly, suggesting that China has flexibility in adjusting its sourcing strategies to avoid U.S. goods. With the new 145% tariff on U.S. imports, this decline in exports is expected to continue. With that being said, the week starting on 4/14 did see an influx of orders. This was quickly followed by the steepest drop off in orders to date, suggesting an anomaly rather than a shift back to U.S. imports as orders go back down to 30% lower than 2024.
Blank Sailings
As the tariffs increase and exports decrease out of China, vessels that travel from China to the United States are starting to see an increase of blank sailings, which is when a carrier chooses to skip port calls along a trade route.
The chart above shows how many blank sailings are scheduled to occur through May 2025 on vessels originating from China to the United States. In response to the lofty tariffs passed the week of 4/7, there was a 400% spike in blank sailings observed for the week of 4/28. This is a result of slowing orders from China leading to excess space on container vessels. While blank sailings appear to decrease and return to normal levels in June, it is likely more will be announced closer to the time of port calls. Expect the numbers in future weeks to continue to increase as imports from China decrease.
While blank sailings are not unprecedented, they often revolve around major holidays and events where manufacturing pauses, like Golden Week or the Lunar New Year. These were also widely common throughout the covid-19 pandemic as port closures and lockdowns surged. The chart below outlines monthly blank sailings from China to the U.S. historically starting in 2020.
Between 2020 and 2022, we observed higher levels and more fluctuations in blank sailings. However, 2023 and 2024 generally showed more stability, with the exception of holiday periods, including Golden Week and Lunar New Year. 2025 began as expected, but April, the month when the total for Chinese import tariffs increased to 145%, saw a significant 47% increase compared to March. This marks nearly a 40% rise in blank sailings along these routes compared to April 2024. As orders from China continue to slow, these trends are likely to persist.
While there are various reasons carriers may choose to implement blank sailings, the current trend is driven by lower demand, leading to higher capacity on vessels along these routes. For shippers, this means that ports typically used for shipments may be skipped, requiring a shift in drayage to a new port of discharge. This can pose challenges and incur higher costs, especially for those without contracted drayage rates at the new port. Without pre-arranged rates, shippers may face spot market prices and may need to act quickly to avoid demurrage fees at the ports.
Emerging alternative routing strategies
As import volumes from China continue to decline due to the 145% tariffs, companies are adjusting their supply chain strategies. As expected, some are shifting their sourcing to other countries. The chart below demonstrates the increase in air freight from Singapore as Chinese volumes decrease.
The week of 4/21, air freight volume from Singapore to the United States was up over 100% compared to the same time last year. While the volume has levelled out during the week of 4/28, it is still up by more than 20% year-over-year. This trend is ongoing as volumes from China decline by as much as 56%. Singapore appears to be a viable option for manufacturing for many U.S. consumers and will continue to be monitored as companies adjust their ordering.
Another strategy under discussion is circumventing tariffs on Chinese goods by first importing them into another country before shipping them to the United States. Canada is the most logical option due to its proximity to the U.S. and the availability of rail and truckload options for ocean shipments. While Canada has also faced new tariffs, they are substantially lower than the rate for Chinese imports, so there is still the potential for cost savings despite additional transportation costs. The chart below outlines volume changes at the Canadian ports of Halifax and Montreal.
So far, there is no clear trend between these Halifax and Montreal as the weekly volume continues to fluctuate, but it is being closely monitored due to its proximity to the United States and the lower tariff rates compared to China.
Most impacted industries
Several industries will be significantly impacted by the recent tariff changes due to reliance on either Chinese manufacturing, the uniqueness of their products, and the profit margins within the sectors. Below are some key industries to watch:
Consumer Electronics
Consumer electronics, including smartphones, computers, and other tech products, are heavily reliant on Chinese manufacturing. These products are difficult to source from alternative countries without substantial increases in cost and lead time. While exempt from the additional 125% tariffs, the threat of future tariffs and increased prices for U.S. consumers may incentivize manufacturers to relocate production to countries with lower tariff rates or lower labor costs.
Textiles and Apparel
China is a major supplier of textiles and apparel to the U.S. and produces a wide range of goods that are difficult to manufacture elsewhere due to cost advantages in labor. With tariffs increasing on these goods, U.S. businesses in this sector—especially those with low-profit margins—will feel significant strain. Companies that rely on Chinese imports to maintain affordable pricing will need to either find alternate sourcing solutions or absorb the costs, potentially impacting their bottom line.
Agricultural Products
Agricultural products like soybeans, pork, and beef are a significant part of U.S. exports to China. With the new 145% tariff, it is expected that China will reduce its imports of these products, negatively impacting U.S. farmers and exporters. These industries are already operating on relatively low profit margins, and the additional cost burdens from tariffs may further strain their profitability.
Chemicals and Pharmaceuticals
Chemical and pharmaceutical industries are also vulnerable to tariff increases, particularly those that depend on active pharmaceutical ingredients (APIs) manufactured in China. These products have limited alternative sources, meaning that any significant tariff increase could disrupt U.S. production. Similarly, the retaliatory tariffs on medical equipment and pharmaceutical exports from the U.S. will affect the U.S. pharmaceutical industry’s ability to compete in the Chinese market.
Summary
The recent tariff changes, particularly the 145% tariff on Chinese imports to the U.S. and the retaliatory 125% tariff from China, will have significant implications for both imports and exports between the two countries. U.S. companies that rely heavily on Chinese manufacturing may face increased costs and will likely begin exploring alternative sourcing options. Conversely, U.S. exports to China will be hindered by the new tariffs, making it more challenging for U.S. suppliers to compete in the Chinese market.
Industries most impacted include consumer electronics, automotive, textiles, agriculture, chemicals, pharmaceuticals, and luxury goods—particularly those with low profit margins or those dependent on exclusive manufacturing in China or the U.S. As companies adjust their strategies to mitigate the effects of these tariffs, we can expect further shifts in global supply chains, with potential long-term changes to how the U.S. and China engage in trade.
