Container shipping activity between China and the United States is sliding again, with traffic hitting its weakest levels in two years, according to the latest reports.
Lowest Reading In 2 Years
On Sunday, in a post on X, The Kobeissi Letter, shared the latest figures from Apollo Global Management on container shipping between China and the U.S., noting that it has dropped to its lowest level since May, and is also “one of the lowest readings in 2 years.”
The post also notes the sharpness of this slowdown, saying, “Shipping volumes have declined by 40% over the last month,” highlighting a significant drop in trade flows, which comes “despite the ongoing US-China tariff truce, which was extended for another 90 days.”
It says that “in reality, average US tariff rates on Chinese goods still stand at 55%, according to Bloomberg,” referring to it as a key reason behind this decline.
The post concludes by saying, “US-China trade is slowing,” with the accompanying chart showing shipping capacity and used capacity dropping in tandem.
Tariffs Wreaking Havoc On Supply Chains
University of Toronto economist William Sheehan highlighted the ramifications of this major drop in shipments from China last week. Referring to a Rolling Stone column by Paul Krugman, Sheehan notes that this dip would mean over 58,000 fewer containers and 700,000 fewer truckloads.
E-commerce platforms such as Amazon.com Inc. AMZN, Alibaba Group Holding Ltd. BABA and PDD Holdings Inc. PDD are bracing for the end of de-minimis exemptions, which allowed for the duty-free import of low-value goods under $800, which is set to come to an end on August 29.
Platforms such as Shopify Inc. SHOP, Commerce.com Inc. CMRC and Lightspeed Commerce Inc. LSPD are most exposed to this change, given their reliance on smaller merchants and importers.
Larger retailers such as Walmart Inc. WMT, Target Corp. TGT and Nike Inc. NKE aren’t that exposed to de-minimis exemptions, which is primarily used for direct-to-consumer shipments, but the drop in shipments from China as a whole is certainly cause for concern.
| Stocks | Year-To-Date Performance | Since Liberation Day |
| Amazon.com Inc. AMZN | +4.91% | +29.49% |
| Alibaba Group Holding Ltd. BABA | +42.74% | -6.23% |
| PDD Holdings Inc. PDD | +22.77% | +4.64% |
| Shopify Inc. SHOP | +31.56% | +71.91% |
| Commerce.com Inc. CMRC | -24.76% | -16.96% |
| Lightspeed Commerce Inc. LSPD | -21.35% | +50.97% |
| Walmart Inc. WMT | +4.91% | +35.08% |
| Target Corp. TGT | -24.91% | +9.27% |
| Nike Inc. NKE | +4.48% | +38.48% |
In May, the port of Los Angeles, the largest import gateway into the U.S., warned that cargo volumes have been trending downward.
According to the port’s executive director, Gene Seroka, even the truce and temporary reprieves on the tariffs aren’t enough to reverse what’s happening, because he says, “you’re not going to be frontloading at 30%,” referring to the reduced tariffs.
Photo Courtesy: Engineer studio on Shutterstock.com
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