Tariff tensions boost Southeast Asia trade to US; China sees a decline

The US market saw initial frontloading in January amid factors such as the International Longshoremen's Association strike on the US East Coast, US President Donald Trump's inauguration and the Lunar New Year holidays, but volatility and uncertainty around tariffs pushed volumes downwards.

Containerized volumes from China to the US declined 23.60% over January-April amid tariff US-China tariff tensions.

After multiple rounds of tariff escalations from both the US and China, levies settled at 145% on Chinese imports to the US and an additional baseline tariff of 10% on all US imports and 125% on US imports to China. Country-specific tariffs were later halted for all countries except China until July 9.

This halt led to a divergence between exports from China and Southeast Asia to the US, with sources reporting shippers utilizing the tariff halt to send cargo.

While bookings reduced from China, ship utilization from Southeast Asia to the US increased to up to 100%.

In context of the country-specific tariffs imposed, Vietnam, a sought-after China+1 option, saw the most exposure to its exports and GDP amongst Asia-Pacific countries. Volumes from Vietnam to US increased 22.55% quarter over quarter in 2025. India, Thailand and Indonesia saw volumes increase 19.32%, 12.23% and 26.57%, respectively, in Q1 2025.

Carriers have responded with blank sailings or reducing the vessel sizes operating for transpacific and moving capacity towards Southeast Asia and India. Market participants reported carriers also moving capacity toward other potential markets such as Europe and Africa.

Swiss carrier Mediterranean Shipping Company also removed two of its Transpacific services Empire and Pelican, increasing port coverage to Southeast Asia.

While volumes from Southeast Asia and India combined surged 352% year over year during January-April, freight rates did not reflect a similar jump, with carrier-imposed general rate increases not sticking in the market.

Platts, part of S&P Global Commodity Insights, assessed PCR 23 -- Southeast Asia to West Coast North America -- at $2,200/FEU, and PCR 25 -- Southeast Asia to East Coast North America -- at $3,300/FEU, both up 10% from April 1.

On the Indian trade lane, carriers have responded by announcing multiple rounds of peak season surcharges in May, hoping to take advantage of the tariff halt. The acceptance of the surcharges remains in question, with shippers accepting only a partial amount. Platts assessed PCR 39 -- Indian Subcontinent to East Coast North America -- at $2,300/FEU, up 64.28% on May 8 from March 3.

Blank sailings on the Transpacific led to an equipment imbalance on the US export side.

"Due to blank sailings, we can't move boxes to ports as now schedules have been canceled and that is affecting our ability to move more boxes in a timely manner, as our bookings have been canceled and the port will not take boxes in," a source said.

Platts assessed PCR26 -- East Coast North America to Southeast Asia – at $300/FEU down by 50% on May 8 from January 2025.

In the current scenario, He Lifeng, a member of the Political Bureau of the Communist Party of China's Central Committee, will hold a meeting with the US Treasury Secretary Scott Bessent over May 9-12 in Switzerland.