A recent temporary easing of tariffs between the United States and China has triggered a noticeable spike in transpacific trade activity, as businesses aim to capitalize on reduced duties in a context marked by ongoing economic tensions and long-term supply chain disruptions. The U.S. government’s decision to lower tariffs on Chinese imports from an aggressive 145% to 30% has spurred a flurry of shipping activity, with companies scrambling to move goods before the reprieve ends in 90 days.
President Donald Trump, who initiated the trade war, has stepped back from some of the punitive measures that have characterized his administration’s approach to China. In a reciprocal move, China responded by reducing its tariffs on American goods from 125% to 10%. This temporary truce has ignited optimism among shipping companies, with container carriers such as CMA CGM of France and Germany’s Hapag-Lloyd anticipating an increase in bookings as firms rush to move products across the Pacific.
David Roche, president of the financial analysis firm Quantum Strategy, remarked that while there is a welcome reduction in tariffs, the complete restoration of trading conditions is far off. “You weren’t going to be shipping anything from China to the U.S. at 145%,” he stated, emphasizing the importance of the tariff reductions. “At 30%, something gets shipped—but far less than when we were at 8% before Trump took office.” Roche suggested that a slight increase in container traffic could soon be observed in bookings at the Port of Los Angeles, reflecting demand that is approximately three weeks ahead.
Despite the short-term relief, Roche urged caution, suggesting that while a minor recovery might occur, significant lingering impacts such as empty shelves in stores and persistent inflation in the U.S. economy will remain. Indeed, recent data from April showed a mixed inflation picture, with year-over-year increases moderating slightly to 2.3%, just below the projected 2.4%. Month-over-month prices rose by 0.2%, falling short of forecasts that anticipated a 0.3% increase. Core inflation, which excludes volatile food and energy prices, remained steady at 2.8%.
Market analysts have been observing the broader implications of these tariff adjustments. Previously, Fitch Ratings downgraded its 2025 global gross domestic product (GDP) forecast to a modest 1.9%, influenced by Trump’s aggressive tariff policies. The firm’s chief economist, Brian Coulton, highlighted that while the latest truce momentarily lowers the effective tariff rate from 23% to 13%, this figure remains significantly above the 2.3% level anticipated for 2024. He also cautioned against the assumption that this ceasefire signifies the end of the trade conflict, noting that key tariffs of 10% still apply alongside various industry-specific levies.
U.S. Treasury Secretary Scott Bessent has characterized the ongoing negotiations with China as part of a broader strategy aimed at “economic decoupling for strategic necessities.” While he clarified that a generalized decoupling is not the official U.S. policy, there remains a concerted effort to bolster domestic manufacturing and reduce American dependence on Chinese imports.
China continues to be the most heavily taxed trading partner for the U.S. The current effective tariff rate on Chinese imports stands at 31.8%, taking into account longstanding duties placed on various goods such as steel and automobiles, in addition to the 10% baseline tariff. Importantly, certain electronics, including smartphones and computers, were spared from the latest wave of tariffs, providing some relief to specific sectors.
Experts agree that while the temporary agreement may alleviate tensions and boost shipping activity in the immediate future, the structural issues affecting global supply chains, coupled with the strategic divide between the two largest economies, are unlikely to mend rapidly. Analysts at Singapore-based UOB Group have expressed a cautiously optimistic view in the wake of this pause in trade hostilities. They anticipate a near-term economic boost for China, as exporters are likely to accelerate production and shipments to the U.S. during this window of opportunity. According to UOB analysts, there is “some upside potential” to their growth forecast for China, currently set at 4.3% for 2025, though definitive revisions will be reserved for analysis of additional data.
Despite this temporary truce, UOB forecasts China will continue to strengthen its domestic resilience and work towards diversifying its export markets, an economic strategy supported by ongoing policy efforts. The global trading environment remains precarious, illustrated by the fragility of recent agreements, coupled with the broader context of geopolitical tensions and evolving economic policies. While the recent tariff reductions may provide short-term reprieve, they do not resolve the underlying challenges that have emerged as a result of the protracted trade war. The dual focus on immediate gains in trade volumes and long-term sustainability of supply chains will drive future policy conversations in both Washington and Beijing.