Tariff problems hit shipping

The reduction of freight rates on the Far East to the United States is mainly due to the impact of tariffs and maritime policies.

The day after Trump took office, he imposed an additional 10 percent tariff on Chinese goods. It involves a full range of imported goods, while imposing 25% and 10% tariffs on Mexico and Canada, respectively, with the intention of weakening China's ability to re-export trade through third countries.

Just over a month ago, the Trump administration again announced an additional 10% tariff on Chinese goods. Mr. Trump, who has threatened to impose 60 percent tariffs on Chinese goods, appears to be taking a phased approach.

There's more bad news. Recently, the Office of the United States Trade Representative (USTR), citing unfounded accusations such as "China dominates the shipbuilding industry through unfair subsidies to the detriment of the interests of the United States", announced a proposed comprehensive proposal targeting China's maritime, logistics, shipbuilding and other fields. The plan to impose fees and restrictions on Chinese shipping operators, including the China Ocean Shipping Group (COSCO), and non-Chinese shipping operators operating Chinese-made ships, is outrageous, with fees of up to $1.5 million per visit.

The freight is low, but there is no goods to ship

According to the statistics of the General Administration of Customs, in 2024, China's textile and apparel exports were 301.1 billion US dollars, once again breaking the 300 billion US dollars mark, an increase of 2.8%. Among them, textile exports were 141.96 billion US dollars, up 5.7% year on year; Garment exports reached 159.14 billion US dollars, up 0.3% year on year. Among them, the export of textiles and clothing to the United States amounted to 50.96 billion US dollars, an increase of 9.1%.

Whether it is to impose tariffs or to target China's logistics industry, it will increase the procurement cost of the United States and reduce the competitiveness of Chinese textiles.

The implementation of the tariff measures, overseas orders have been significantly reduced, and the textile industry is not confident enough, which also makes the market situation in early March this year significantly lower than in previous years, and foreign trade customers have an obvious wait-and-see mood.

It's true that freight rates have come down, but there's not as much cargo to ship.

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