RELIEF FOR SHIPPING AS US – CHINA TARIFF TRUCE EXTENDED FOR 90 DAYS
The US and China have agreed a further 90-day pause on higher tariffs between the two global economic giants. Levels had been set to surge at 12:01 am on 12 August with US tariffs on Chinese goods set to surge to 54% from 30%, while Chinese tariffs on US imports had been set to rise to 30% from 10%.The 90-day pause until 10 November maintains existing tariff levels as negotiations between the two countries continue and staves of an expected plunge Chinese imports into the US which would have been damaging to shipping trade.On the US side the pause in higher tariffs was affected by an Executive Order from President Donald Trump.“The United States continues to have discussions with the PRC to address the lack of trade reciprocity in our economic relationship and our resulting national and economic security concerns.China also confirmed the extension of the pause in tariffs which it said followed negotiations with the US in Stockholm at the end of July.The news will come as relief to shipping companies which had expected to see a sharp drop off in volumes if US tariffs on Chinese goods had risen to 54% from 30% at present.
INDIA HOLDS FIRM IN TRUMP TARIFF TURMOIL
The US President’s executive order, issued this week, has doubled the tariff on Indian exports to the US from 25% to 50% with effect from 27 August. The earlier 25% tariff, imposed last week, was supposed to come into effect on 7 August. Although the total tariff is now one of the highest rates to be levied by Trump so far, the Indian administration appears relatively indifferent so far. There could be an element of bravado here, but it could also reflect the fact that the US President often changes his mind.Although the Indian Foreign Ministry had initially responded with a terse statement in which it declared the new tariff was unfair, unjustified and ‘extremely unfortunate’, the country went ahead with a far-ranging new deal with Russia yesterday to forge closer industrial links. The agreement covers a range of sectors including aluminium, fertilisers, rail transport, and mining.If India opts to scale back imports of Russian crude as the least bad option, it will be sourcing new supplies from various regions with long voyages likely to favour large tankers. According to industry figures, India’s top-ranking crude suppliers, after Russia, were Iraq, Saudi Arabia, UAE, US, Nigeria and Angola.
CONTAINER RATES UNMOVED BY LATEST TARIFF DEADLINE
Freight markets witnessed a relatively subdued response following last week’s dramatic trade announcements, contrasting sharply with earlier reactions to tariff developments. Previously, shippers hurriedly loaded goods between announcement periods to beat deadlines. However, the current situation reveals a lack of urgency ahead of the August 7 tariff imposition deadline set by President Donald Trump, according to the latest update by analyst Freightos. This may be attributed to the weariness of shippers who previously engaged in proactive frontloading, leading to a diminished urgency during this tariff window.Trans-Pacific container rates to the West Coast have maintained stability for three consecutive weeks, remaining at an average of $2,300 per forty-foot equivalent unit (FEU). Daily rates have seen a slight decrease of approximately $100 since August 1. Meanwhile, trans-Atlantic rates have also held steady at around $1,900 per FEU, indicating persistent stability in that corridor. here is a possibility that the trans-Pacific ocean demand might witness a rebound, fueled by a 90-day tariff extension for China.
CARGOJET NAVIGATES TARIFF TURBULENCE, MAINTAINS REVENUE GROWTH
Cargojet’s core transportation revenue from a domestic Canada overnight network, dedicated contract carriage and charter flights increased 7% year over year in the second quarter amid a rise in U.S.-fueled trade barriers, but management said it is cautiously optimistic it can maintain volumes in the near-to-medium term despite global trade uncertainty. Transport revenue came in at $148.7 million, with a 14% increase in domestic revenue and 22% growth in charter revenues outpacing a 9.6% decline from aircraft-as-a-service contracts, according to results published Wednesday night. The bundled lease business was down 15% in the first quarter. Cargojet (TSX: CJT) said revenue from its domestic network, which co-loads freight from multiple customers in 16 cities, benefitted from e-commerce and B2B growth, as well as rate escalators in customer contracts. Cargojet now operates 43 Boeing 767 and 757 freighter aircraft after adding two used 767-300 passenger aircraft this year that were modified to carry cargo containers. A third 767-300 aircraft remains under conversion and is expected to be delivered in the fourth quarter. The company said it will sell two older 767-300 aircraft during the third quarter to improve cash flow and its debt leverage ratio. It will also return an older 767-200 to its lessor in the first quarter of 2026.