TO NO-ONE’s surprise, China-US cargo bookings and transpacific spot rates have surged after the US temporarily cut incremental tariffs on Chinese goods from 145% to 30%.

The Shanghai Containerized Freight Index assessment for Shanghai to the US west coast averaged $3,091 per feu in the week ending Friday, soaring 32% week on week (w/w). The SCFI Shanghai-US east coast rate jumped 22% w/w, to $4,069 per feu.

The Drewry World Container Index spot-rate assessment for Shanghai to Los Angeles rose to $3,136 per feu in the week ending Thursday, up 16% w/w. The WCI Shanghai-New York assessment rose 19% w/w, to $4,350 per feu.

China-US bookings rapidly rebound

“Over the last couple of days, we’ve seen a real surge in bookings compared to last week. Bookings this week were up 50%-plus,” said Rolf Habben Jansen, chief executive of Hapag-Lloyd, during a conference call on Wednesday.

Ryan Petersen, chief executive of freight forwarder Flexport, said on Friday that his company’s China-to-US ocean bookings were up 275% from last week.

Transpacific spot rates are expected to continue rising as shippers scramble to get cargoes to the US during the 90-day reprieve on higher tariffs.

Clarksons analyst Frode Mørkedal said: “Beyond the short-term demand effect on freight rates, the current situation could lead to increased congestion and delays, elevating rates for a longer period.”

The scale and duration of the volume rebound remains uncertain. As Habben Jansen noted, this will depend “on how the talks go” on tariffs.

The average US tariff rate on China goods prior to Trump 2.0 was variously estimated in the range of 10%-20%, with several investment banks citing a pre-2025 average of 10% and the Petersen Institute for International Economics putting it closer to 20%.

Thus, average US tariffs on China goods have fallen from an aggregate of 155%-165% to a current average of 40%-50%  — which is still extremely high.

Warning from Walmart

America’s largest importer of containerised goods, retailer Walmart, reported results and held a conference call on Thursday. The message during the call, and in subsequent interviews, was that the current US tariff rate on Chinese goods remains a major problem.

“Given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” said Walmart chief executive Doug McMillan.

“Even at the reduced levels, the higher tariffs will result in higher prices.”

Walmart chief financial officer John David Rainey praised the decision to bring tariffs down, but said: “Let me emphasise: we still think that’s too high.”

Rainey said during an interview on CNBC that US consumers would start seeing higher prices by the end of this month “and certainly much more in June”.

Inflation is negative for consumer demand, and thus for container shipping demand. A  more immediate risk to shipping demand relates to Walmart executives’ comments on price elasticity and inventories.

McMillan said that Walmart would “adjust quantities over time as we navigate tariff impact on costs”.

Rainey explained: “We’ll need to manage quantity decisions as we measure the price elasticity of impacted items. It remains to be seen what the elasticity of demand is.”

In other words, Walmart will reduce quantities where it does not expect consumers to accept the higher prices necessitated by tariffs.

Other US importers will face the same calculation, and they are far smaller than Walmart. Walmart imported more containerised goods to US ports in 2024 than the second- and third-largest importers — Home Dept and Target — combined.

Smaller importers have nowhere near the economies of scale, flexibility and financial resources that Walmart does, but they face the same tariff cost, which could cap upside for US imports after an early peak-season surge.