China-US trade soars as exporters race to hit tariff truce window
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In the week beginning May 12, bookings on freighters headed from China to the US more than doubled from the prior week.
PHOTO: AFP
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BEIJING – A temporary trade truce between the world’s two largest economies has sparked a knee-jerk bounce across China’s ports and factory floors.
In the week beginning on May 12, when the US and China agreed to sharply reduce tariffs for 90 days,
Prices for space on ships across the Pacific into the US also rose, with spot rates from Shanghai to Los Angeles jumping about 16 per cent – the biggest increase for the route in 2025 – to US$3,136 (S$4,000) per 40-foot equivalent unit for the week ended May 15, according to the Drewry World Container Index.
The global composite index also rose the most in 2025.
The demand was not just by sea: The number of international air cargo flights rose almost 18 per cent, according to data released by China’s Ministry of Transport.
The surge is likely a wave of front-loading as the trade truce opens a window to avoid steep US tariffs, said Mr Jayendu Krishna, a director at Drewry Maritime Services. It is also an important buying season for the holidays – it takes about a month for items to arrive in the US and retailers are rapidly running through inventory they have on hand, awaiting some trade certainty.
“The current surge in bookings is likely to lead to supply chain disruptions for the next two to three months, unless there is another tariff shock from Mr Trump,” Mr Krishna said.
Bookings on ships are due to be filled by factories such as that of supply chain manager Chen Lei – the factory he works at makes various types of home appliance products, from coffee machines and toasters to irons and humidifiers.
The Guangdong-based manufacturer where Mr Chen works counts Royal Philips and Walmart among clients, and has received a flurry of requests from the US to resume production on orders that were put on hold in April.
“Machines in the factories are working non-stop now,” he said, adding that “90 days is too short. Production, shipping – we can’t wait a single minute”.
AP Moller-Maersk, a major container liner that is also one of the largest on the transpacific route, added capacity again after seeing an increase in bookings when the truce was announced, a spokesman said.
Even with the boost in activity from earlier weeks, the overall level of shipments remains in line with this time in 2024.
That shows many retailers are either not ordering to the same extent, waiting for more certainty, or maybe had already stocked up earlier in 2025.
Liners were also bringing unused capacity already on these routes back online, with the share of voided sailings forecast to fall to 13 per cent in the week of May 26, from 25 per cent the week before, data from HSBC and Flexport shows.
A flurry of trade figures from across Asia this week show the chaos that US President Donald Trump’s policies have wrought in 2025.
In South Korea, the value of exports fell 2.4 per cent in the first 20 days of May from the prior year, with outbound shipments to the US down about 15 per cent.
Japanese exports rose only 2 per cent in April – the weakest growth in seven months, data out on May 21 showed. BLOOMBERG
