Trade by-passing US says DHL Global Forwarding

As the US contemplates the end of Washington’s China tariff pause on 9 August the rest of the world has continued to grow its trading relationships according to the latest DHL Ocean Freight Market Update.

US imports have shown significant declines over the last two months with Blue Alpha Capital consultant John McCown expecting the slowdown in trade to be extended unlike previous times when demand has eased, which were short-lived.

“Trade is finding more receptive paths and increasingly bypassing the US market. China’s exports to the US declined by 9.7% this year, while shipments to the UK, ASEAN, and Africa grew by 7.4%, 12.2%, and 18.9%, respectively. Asia-Europe rates have also overtaken Transpacific prices for the first time in 2025,” said the DHL Global Forwarding report.

Demand on the Pacific has declined sharply, added DHL, as a direct consequence of Washington’s tariff regime and the uncertainties linked to import duties, which appears chaotic and unstructured.

With the prospect of the tariff pause ending next month, on or around 12 August, import duties on goods from China to the US will resume at 55%, composed of a 10% baseline tariff, a 20% fentanyl charge and a 25% section 301 tax will be imposed.

Although some observers believe that a 34% reciprocal tariff could replace the 10% baseline tariff “unless the two countries negotiate another tariff suspension.”

Meanwhile, China’s Commerce Minister, Wang Wentao, said on Friday that recent talks in Europe showed there was no need for a resumption of the trade war between the US and China.

He said the “ups and downs” in the two countries’ relationship underscored their economic interdependence, reported Reuters.

McCown highlighted the damage being caused to both economies as trading between the world’s two largest economies stalled.

According to Blue Alpha the 10 ports with the largest container volumes in the US saw a 7.9% decline in Volumes during June.

“This was the second straight month of declines and was above May’s 6.6% decrease. Both of those decreases were sharp reversals from April’s 9.6% gain,” said McCown.

The consultant forecasts that 2025 will see a contraction in overall volumes into the US in contrast to the 15.2% growth in 2024, which saw volumes above the pandemic peak.

McCown added, 2025, “Will be one of the more striking year-to-year changes in US container volumes in the six-decade history of container shipping. I’m only aware of two periods of annual declines – during the financial crisis and the pandemic – and both proved to be short-lived.”

There is nothing to suggest that the current tariff regime that McCown says is directly responsible for the drop off in demand, will be short-lived, rather it is more likely to continue through to the conclusion of the Trump administration’s term, at least.

Meanwhile, Zongyuan Zoe Liu, Senior Fellow for China Studies at the New York thinktank the Council on Foreign Relations, boldly announced that “China is winning Trump’s trade war” in last week’s issue of Project Syndicate.

Since the 2018 tariffs were introduced, China has re-routed trade, hedged against the dollar-based financial system and accelerated technological developments and has hit back with greater export controls.

Last month Beijing announced that it will extend tariff free trading to 53 of 54 African nations; it excluded Eswatini which recognised Taiwan.