Since President Donald Trump announced sweeping tariffs on April 2, stock markets around the world have lost about $10 trillion in value. But the bulk of the tariffs haven’t even gone into effect yet: The 10% universal tariff started on Saturday, April 5, but the much higher rates imposed on more than 80 countries including China, the European Union and Vietnam are set to hit starting at midnight on Wednesday.
Thanks to a footnote in the tariff regulations, any goods that are loaded onto a vessel–such as a container ship or a plane–before the Wednesday midnight deadline won’t be subject to the additional tariffs. That’s provided a short window of time for companies to ship as many goods to the U.S. as they can in the days since Trump’s announcement. As a result, shipping companies are facing a mad scramble from their customers.
“Many firms are racing to ship as many products as possible prior to tariffs going into effect,” says Ben Slupecki, an analyst at Morningstar. “It certainly seems like the ports are especially full,” adds Benjamin Nolan, an analyst at Stifel.
U.S. consumers and businesses purchase and sell anywhere from 15% to 25% of global container shipping volume, and the rush has already sent freight rates–the price charged by shipping firms to transport a container–soaring. The cost of shipping a container from Shanghai to Los Angeles and from Shanghai to New York rose by 10% and 8%, respectively, on April 3 compared to the previous week, according to maritime research firm Drewry.
Many companies were already taking matters into their own hands well before Trump announced the new levies: the Times of India reported that Apple flew five planes full of iPhones and other products from its factories in India to the U.S. in the last week of March. A representative for Apple did not immediately respond to a request for comment.
For many companies, chartering their own planes isn’t an option. About 90% of the world’s goods are transported by container ships, making them the primary mode of transport for much of global trade. Forbes contacted more than a dozen of the world’s largest container shipping companies and heard back from four, which collectively account for 25% of the industry’s market share.
“Moving forward, until they have a clearer picture, we generally expect customers to be a bit more cautious about their inventory levels,” says a spokesman at publicly traded, Copenhagen-based Maersk, the world’s second-largest shipping firm. “In the very short term, we’re likely to see some rush airfreight orders in the US ahead of the announced tariffs going into effect.”
Other shipping firms are looking into whether they will have to shift their trade routes away from the U.S. if their customers dwindle or disappear because of the tariffs. “We see increasing uncertainty due to the tariffs imposed by the U.S. and potential reciprocal measures by other countries,” says Tim Seifert, a spokesperson for Hamburg, Germany-based Hapag-Lloyd, the third-largest shipping company in the world. “These tariffs can affect demand, trade flows and costs, which means that we may have to adjust our service network.”
Many of the world’s largest shipping companies are based in east Asia, where several countries have been hit with high tariffs. HMM, a South Korean container shipping firm that’s the eighth-largest in the world, hasn’t made any changes to its routes yet. “As a container liner operator, HMM operates its vessels on fixed schedules according to each service route,” says Hani Lee, a spokesperson for HMM.
Even before Trump unveiled his tariffs on April 2, many companies had been stockpiling goods to hedge against the impact of any future announcements. U.S. imports were up by about 5% in February over the previous year, with imports from China rising nearly 8%, according to logistics tech firm Descartes Systems Group. “Before the announcements, we have seen customers accelerate imports to the US and secure additional storage space,” says the Maersk spokesperson.
That continued in March, when the Trump administration imposed new tariffs on China and on steel and aluminum, as well as announcing tariffs on cars and auto parts. “There was very strong U.S. import performance in March,” says Jackson Wood, director of industry strategy for global trade intelligence at Descartes, pointing to a jump in imports to the U.S. last month.
Container ships typically take about 20 days to travel from Shanghai to Los Angeles and 40 days from Shanghai to New York, meaning that any ships departing before the Wednesday midnight deadline won’t arrive until next month–but will still be carrying goods that haven’t been hit by the additional tariffs.
What may happen is a pause by some companies in shipping goods to the U.S. Automaker Jaguar Land Rover and gaming outfit Nintendo have already announced a change of plans; the former is pausing shipment of its cars for a month, and Nintendo delayed pre-orders for its new Switch 2 console. Companies will now “slow down or even pause shipments while they work out what to do and who will absorb the extra costs,” says Philip Damas, managing director and head of supply chain advisors at Drewry. “We expect a decline in volumes and in rates in the next few months. At the same time, ocean carriers are cancelling a high number of transpacific sailings.”
It’s still unclear if the tariffs are here to stay, with U.S. Treasury Secretary Scott Bessent telling Fox News on Monday that nearly 70 countries had contacted the Trump administration to negotiate trade agreements. But as long as they remain in place, more companies are likely to stop importing entirely.
On Friday, Ryan Petersen, CEO and founder of supply chain logistics firm Flexport, wrote on X that “28% of the customers in Flexport's call yesterday said they're pausing all ocean freight bookings from Asia until there's more clarity on where tariffs will end up.” Says Descartes’ Wood about companies halting shipments: “They are telling carriers, they're telling suppliers, ‘that shipment of 500 pallets that I had, I don't want it right now.’”
If that persists, it’s likely to push freight rates down and dent the profits of shipping companies. Shares in the largest publicly-traded shipping companies sank between 9% and 29% since Trump’s announcement on April 2, with Maersk plummeting by 17.5% and Hapag-Lloyd falling by 13% as of the end of trading on Tuesday. German billionaire Klaus-Michael Kuehne, who owns 30% of Hapag-Lloyd, has lost about $2.2 billion over that period.
The only American company in the top 30 largest shipping firms is Honolulu-based Matson, which has 0.2% of global market share and depended on China for a third of its container volume last year. Matson shares have tumbled by nearly 22% since last Wednesday. In an earnings call on February 25, Matthew Cox, Matson's chairman and CEO, told investors the firm hadn’t seen any major changes in freight rates from Trump’s previous tariffs on China but warned it was too early to tell. “The impact to our China freight rates may ultimately depend on the level and scope of the tariffs,” he said. “It's too early to tell what retaliatory tariffs, if any, roll out. So, I would just say stay tuned.” Keoni Wagner, Matson's director of corporate communications, told Forbes there was “nothing new since then.”
China responded to Trump by imposing a retaliatory 34% tariff on U.S. imports that will go into effect on Thursday. On Tuesday, the Chinese ministry of commerce released a terse statement warning it would go higher if Trump followed through on a threat to apply an additional 50% tariff on China, saying the country would “fight to the end.” The fight appears to be escalating: Hours later, the White House announced it would go through with its threat and impose tariffs of at least 104% on Chinese goods.
Two Chinese companies that will be hard hit by tariffs are fast-fashion outfit Shein and ecommerce giant Temu, known for quickly delivering inexpensive goods to American consumers from China by air. Both firms had long relied on the “de minimis” exemption, a provision that allows imports with a value under $800 to enter the U.S. duty-free. On the same day as his tariffs speech last week, Trump announced he was ending this exemption for goods from China and Hong Kong starting on May 2. Shares in PDD Holdings, Temu’s parent company, have fallen by 23% since then, shaving nearly $9 billion from PDD founder Colin Huang’s fortune.
The end of the exemption could push Temu and Shein to ship more of their products by sea, according to Matson’s Cox. Temu and Shein are “moving virtually 100% of their cargo via air freight,” he said on the earnings call that predated the de minimis decision. “That could be an upside for those that operate in expedited [shipping].”
Another potential hammer blow to shipping and global trade could land in the coming weeks if the U.S. Trade Representative decides to implement a proposed policy to levy fees up to $1.5 million per ship each time a vessel enters a U.S. port if the ship itself–or any ship in that company's fleet–was built in China, or is owned or operated by a Chinese company. “There will probably be a few winners and many losers, including some for whom their entire business model is broken” if this policy is enacted, says Stifel analyst Nolan.
Shipping firms could also avoid the U.S. altogether if their customers decide the extra cost just isn’t worth it. “Customers will need the ability to speed up or slow down goods and potentially redirect flows to alternative markets to keep their goods moving efficiently,” says the Maersk spokesperson. “We will closely monitor customer reactions and be ready to adapt accordingly.”
