The supply chain is cooling down, from warehouses to ports, as the rush from the US-China tariff war subsides.

The surge in orders due to the U.S. imposing high tariffs on China has cooled off, and the trend of electronics manufacturers shipping early has vanished, resulting in decreased demand for sea and air transport between China and the U.S. Shipments of products such as laptops and iPhones have slowed down, and container orders at the Port of Los Angeles have plummeted. Chinese export companies are pivoting to emerging markets and adjusting their supply chain strategies. U.S. ports and the retail sector are feeling the impact, with import volumes projected to drop by 20%.

The Electronics Industry's Stockpiling Wave Ends, Urgent Order Demand Disappears

After the Trump administration announced in early April 2025 a tariff increase of up to 145% on Chinese goods, electronics companies, to avoid a surge in costs, initiated a wave of rush orders from mainland China to the United States. Laptops and iPhones, being high-value products, became the main focus of this rush, with brand manufacturers using both air and sea transport to complete stockpiling before the tariffs took effect.

However, by the end of April, the effect of these rush orders had clearly subsided. Acer (2353) admitted that the current U.S. market has sufficient laptop inventory, with no short-term shortage pressure, indicating that the demand for rush orders no longer exists. As for iPhones, although over 80% are still manufactured in China, Apple's recent stockpiling actions have also slowed. Industry insiders point out that the main reasons for the decline in rush orders include the completion of prior stockpiling and companies adopting a cautious approach towards future tariff policies.

Concurrent Decline in Air and Sea Transport Volumes, Shipping Companies Say "Demand Has Disappeared"

The decline in rush orders has directly impacted the transportation industry. In air freight, industry statistics show a general 30% decline in air transport volume from China to the United States. Hong Kong freight forwarder U-Freight noted that after the tariff increase, China-U.S. air freight business dropped by about 50%. Cathay Pacific also expects that due to tariff changes and adjustments to the U.S. "small-value exemption" threshold, air freight demand will remain weak.

In sea freight, the situation is equally severe. Hapag-Lloyd, the world's fifth-largest container shipping company, stated that Chinese customers have canceled about 30% of export orders. According to container tracking service provider Vizion, as of mid-April, the volume of 20-foot container orders from China to the U.S. decreased by 45% year-on-year. The Port of Los Angeles estimates that starting the week of May 4, arrivals will be down by one-third compared to the same period last year, with over 250,000 containers expected to be canceled in May.

Taiwan's three major container shipping companies, Evergreen, Yang Ming, and Wan Hai, are also feeling the pressure. Evergreen's General Manager Wu Guanghui noted a "steep decline" in cargo volume from China to North America, similar to the supply chain disruptions at the start of the pandemic. Wan Hai's General Manager Hsieh Fu-lung stated that cargo volume on the U.S. West and East Coast routes remains sluggish, and although some goods are still being shipped, overall demand has clearly been deferred.

Long-term Container Rates Decrease, Market Sentiment Cools

The decline in rush orders is also reflected in the freight rate market. Recently, the annual increase in long-term contract rates signed by shipping companies and U.S. shippers is only about 30-40%, far below the previously expected 60% increase, indicating weakened market confidence in future demand. Although shipping company executives still emphasize that "demand is only deferred, not disappeared," the decline in actual orders and transport volume is a fact.

Additionally, Taiwan's National Development Council's March economic indicator shows that while production and export indicators remain in the "yellow-red signal" overheated state, stock price indices and manufacturing business climate test points have declined, reflecting the dual impact of the decline in rush orders and tariff uncertainty on business confidence.

Chinese Export Companies Shift to New Markets, Adjust Supply Chain Layout

Facing a sudden drop in U.S. market demand, Chinese export companies are also adjusting their strategies. According to a survey by the China Council for the Promotion of International Trade of over 1,100 foreign trade companies, nearly 50% of companies said they would reduce their U.S. business, and 75% plan to expand into new markets to compensate for losses. The Chinese government is also speeding up the approval process for companies to participate in overseas exhibitions, helping them explore new markets and domestic sales channels.

The trend of supply chain relocations is also emerging in other Asian countries. To avoid high tariffs on Chinese-made goods, U.S. companies are accelerating their procurement shift to Vietnam, Thailand, India, Malaysia, and Indonesia. Although these relocations will take time to implement, they have already had a substantial impact on China's export structure.

U.S. Ports and Retail Industry Feel the Repercussions

The U.S. is also feeling the repercussions of the decline in rush orders. According to the Financial Times, the Port of Los Angeles expects to cancel 20 sailings in May, equivalent to 250,000 containers. The Guardian reported that port authorities and logistics companies generally expect a significant decline in Chinese freight volume, with some retailers like Target and Walmart having already suspended orders from China.

Jonathan Gold, Vice President of the National Retail Federation (NRF), stated that overall import volume is expected to decrease by 20% in the second half of the year. Due to the time required for supply chain realignments, some products may experience short-term shortages, further affecting employment and revenue in the logistics and retail industries.

The supply chain is cooling down, from warehouses to ports, as the rush from the US-China tariff war subsides.

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