Cry Wolf
While the threat of additional tariffs on those countries that don’t come to the table with a plan to assuage the president is likely a real one for smaller countries that have export business with the US, the general discomfort and worry level seems to be dissipating a bit. The tone publicly is that all countries are willing to discuss trade agreements, while privately the feeling is moving toward, ‘nothing is going to happen other than saber rattling” As we watch container rates to get an idea of the level of concern, commentary from that sector seems to indicate participants are becoming inured to tariff threats as little has actually be implemented.
Rates spiked early in the year because of tariff woes and again in June as previous deadlines approached but have not held at those inflated prices. There is still considerable premium in container rates relative to 2023 and even those seen in March and April of this year, but the panic that kept shippers up at night seems to have subsided to be replaced by less panic and a bit more dice rolling. We expect if Trump weasels out of the 8/1 deadline again, most of that premium will disappear. If he sticks it to a few allies, that panic could return, but for now it looks like container rates are easing back to 1Q norms, especially as many brands are not seeing enough demand to continue to pull-in next month’s shipments. Waiting until August…
Rates spiked early in the year because of tariff woes and again in June as previous deadlines approached but have not held at those inflated prices. There is still considerable premium in container rates relative to 2023 and even those seen in March and April of this year, but the panic that kept shippers up at night seems to have subsided to be replaced by less panic and a bit more dice rolling. We expect if Trump weasels out of the 8/1 deadline again, most of that premium will disappear. If he sticks it to a few allies, that panic could return, but for now it looks like container rates are easing back to 1Q norms, especially as many brands are not seeing enough demand to continue to pull-in next month’s shipments. Waiting until August…
Figure 1 - Global Container Freight Index - 4/23 - 2025 YTD - Source: SCMR LLC, Freightos
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