US Supply Chain Outlook Q4 2025: Backing Out of Front-Loading

As we enter the final quarter of 2025, US supply chain activity is at an inflection point following the imposition of IEEPA and a range of Section 232 tariffs. 

The US government shutdown, which we expect to last through mid-October, reduces the availability of macro trade data to track such a change. Bill-of-lading data is still available and shows a 5.8% year-over-year drop in September versus a year earlier. The downturn was led by a slide in the capital goods sector, including a slump in electrical components reflecting continued weak manufacturing activity.

It also reflects an early end to the peak shipping season, with imports of consumer electronics and leisure goods combined down by 1.6% compared with August compared with a 7.1% rise on average for the period over the past 10 years. 

The downturn in September reflects the reversal of a tariff-related increase in shipments linked to “front loading” strategies earlier in the year. Many firms have now completed that process and instead are focusing on price and cost negotiation related tactics for 2026.

If extended beyond mid-month, other data sources include the creation of a “mirror” for US trade using other countries’ trade statistics. As of Oct. 6, countries have reported the equivalent of around 45% of US trade for August with most of the remainder published by Oct. 16.

Supply chain decision-makers will get a degree of clarity in the policy outlook during the fourth quarter, though tariffs will remain volatile through 2026. 

The US Supreme Court has scheduled a hearing on IEEPA duties for Nov. 5. Even if the Court rules them illegal, the president has several other measures for applying wide-ranging duties including the Section 301 measure.

The Trump administration has indicated that a range of trade deals with Asian countries, including mainland China, are expected to be announced at the APEC summit in South Korea from Oct. 31. These could both trim tariff rates and reduce future uncertainty.

Further announcements on Section 232 duties are expected throughout the fourth quarter and into 2026, most notably on the electronics sector. Further Section 232 reviews cannot be ruled out given the recent launch of investigations into medical supplies and factory machinery.

The container shipping market already appears to be pricing in weaker demand ahead of the Lunar New Year holiday on Feb. 17, 2026. Container rates on North Asia to US routes are now well below December 2023 levels, according to S&P Global Commodity Insights data. The drop in demand can also be seen in North Asia to North America West Coast rates. Market intelligence forecasts call for a further decline in container shipping volumes over the next 12 months. 

There is also widespread evidence that retailers have paused or are reversing their inventory build, cutting demand for imports during the remainder of 2025 and into 2026.

Market intelligence forecasts call for a further decline in container shipping volumes over the next 12 months.