The temporary reduction of tariffs between the US and China has boosted exports, resulting in an 88.88% increase in Wan Hai Lines' profit in the first quarter of 2025 and the expansion of its routes.

Taiwan • Business • 05/13 10:26
The temporary reduction of tariffs between the US and China has boosted exports, resulting in an 88.88% increase in Wan Hai Lines' profit in the first quarter of 2025 and the expansion of its routes.

On May 13, 2025, the US and China reached a 90-day tariff agreement in Geneva, reducing US tariffs on imports from China to 30% and Chinese tariffs on imports from the US to 10%. This move offers a short-term boost for Chinese exporters. Wan Hai Shipping announced its financial report for the first quarter of 2025, with net profit after tax increased by 88.88% compared to the previous year, and freight rates on Asian routes increased by over 30%. In response to growing demand for cargo space, Wan Hai is expanding its shipping routes and initiating new shipbuilding plans to boost capacity and competitiveness.

Key Updates

05/14 01:54

CNBC commentator Jim Cramer breaks down the effects of Trump's temporary tariff delay policy on the market's rebound.

Former President of the United States, Donald Trump, announced a temporary suspension of new tariff measures on China and other trade partners, which led to a market rebound. CNBC commentator Jim Cramer analyzed this policy reversal, pointing out that tech stocks benefited and market expectations were disrupted. Cramer described it as a "game of chicken without any winners," posing risks for short-term traders and highlighting the subtle interaction between policy and the market. This move might be intended to avoid an economic slowdown caused by tariffs, which could impact the Federal Reserve's ability to lower interest rates. The tariff pressure on businesses has been temporarily eased, and limited market supply and strong earnings reports also contributed to the stock market rebound.

05/14 01:54

U.S. inflation dropped to 2.3% in April, easing concerns over stagflation and leading to expectations of interest rate cuts.

According to data released by the U.S. Department of Labor on May 13, 2025, the annual CPI increase rate for April dropped to 2.3%, the lowest level since February 2021, which was below the expected 2.4%. The core CPI annual increase rate stayed at 2.8%, meeting expectations. This data shows that inflation has been slowing for three consecutive months, raising market expectations for a Federal Reserve interest rate cut, temporarily easing the risk of stagflation. However, uncertainty surrounding tariff policies could still impact future inflation trends.

05/13 15:24

China-US Reach 90-Day Tax Reduction Agreement: Toy Industry Benefits, Trump's New Drug Pricing Policy Gains Attention

On May 12, 2025, the US and China reached a 90-day "tariff reduction agreement" in Geneva, where US tariffs on Chinese goods were reduced from 145% to 30%, and Chinese tariffs on US goods were reduced from 125% to 10%. This agreement temporarily halts the trade war and is beneficial to the US toy industry, though the risk of price fluctuations still exists. On the same day, Trump signed an executive order to promote the "most favored nation pricing" policy for pharmaceuticals, mandating that pharmaceutical companies reduce US drug prices to align with those in other developed nations, which drew significant attention from the pharmaceutical industry.

05/13 10:59

The United States has reduced the tariff on small packages from China to 54%, ended the de minimis tax exemption policy, and maintained a fixed fee of $100 per package.

On May 13, 2025, the White House announced that starting May 14, the tariff on small parcels valued at no more than $800 sent from mainland China and Hong Kong to the United States will be reduced from 120% to 54%. However, a fixed fee of $100 per parcel will still apply, and the planned increase to $200 per parcel in June has been canceled. This move ends the small parcel exemption policy that has been in place since 1938, aiming to tackle the misuse of the system for smuggling and dumping.

05/13 10:59

US and China Reach 90-Day Tariff Delay Agreement: AI Supply Chain to Benefit, PC and Panel Industries Continue to Face Challenges

On May 12, 2025, the United States and China reached an agreement to temporarily suspend additional tariffs for 90 days and significantly lower punitive tariffs. Andy Ai, head of Taiwan Research at UBS Investment Bank, pointed out that this positively impacts market sentiment, especially in the AI supply chain. However, industries like PCs and panels are still affected by exchange rate fluctuations, advance stockpiling, and low profit margins. The agreement involves the U.S. cutting tariffs from 145% to 30% and China reducing theirs from 125% to 10%.

05/13 10:26

The temporary reduction of tariffs between the US and China has boosted exports, resulting in an 88.88% increase in Wan Hai Lines' profit in the first quarter of 2025 and the expansion of its routes.

On May 13, 2025, the US and China reached a 90-day tariff agreement in Geneva, reducing US tariffs on imports from China to 30% and Chinese tariffs on imports from the US to 10%. This move offers a short-term boost for Chinese exporters. Wan Hai Shipping announced its financial report for the first quarter of 2025, with net profit after tax increased by 88.88% compared to the previous year, and freight rates on Asian routes increased by over 30%. In response to growing demand for cargo space, Wan Hai is expanding its shipping routes and initiating new shipbuilding plans to boost capacity and competitiveness.

05/13 08:57

90-Day U.S. Tariff Suspension Triggers Buying Frenzy: Experts Advise Stockpiling Five Key Categories of Imported Foods

In early May 2025, the U.S. government announced a 90-day suspension of tariffs on imports from multiple countries, serving as a buffer period for negotiations with trade partners. This move sparked a buying frenzy in major cities across the U.S., as consumers feared price hikes once the tariff period ended, leading them to stockpile food and daily necessities. Experts recommended stockpiling grains, coffee, wine, cheese, and cooking oil, since these goods are highly dependent on imports and face significant tariff increases. The market reacted cautiously, with businesses taking a wait-and-see approach during the suspension period, while some accelerated shipments to reduce future tax risks.

05/13 06:59

Due to the new US tariff policy, Samsung is increasing DRAM prices: DDR4 by 20% and DDR5 by 5%. Companies are stocking up in advance, boosting demand.

In May 2025, Samsung Electronics agreed with major clients to raise DRAM prices due to new upcoming US tariff policies, with DDR4 increasing by 20% and DDR5 by 5%. This move was driven by companies stocking up in advance, which increased demand. SK Hynix and Micron also adjusted their prices simultaneously, indicating supply chain and policy pressures in the DRAM market. These adjustments reflect changes in market demand and suppliers' strategic responses.

05/12 21:54

Customs duty revenue in the United States reached a record high of $16 billion in April 2025, easing the pressure on the budget deficit.

In April 2025, the U.S. federal government's customs revenue reached $16 billion, a 130% increase from the same period last year, setting a new monthly high for the past decade. This growth was primarily driven by the Trump administration's 'across-the-board 10% tariff' and significant punitive tariffs on China. This revenue boosted the April budget surplus to $258.4 billion, a 23% increase from the previous year, partially easing the budget deficit pressure.

05/12 21:30

In April, the U.S. budget surplus grew by 23% to $258 billion, as customs revenue hit a record high.

The U.S. Department of the Treasury released data on May 12, 2025, indicating that the federal government's budget surplus for April 2025 was $258 billion, a 23% increase from the same period last year. This growth was primarily driven by a surge in tax revenue and customs duties before the close of the tax season. Customs revenue in April was $16 billion, marking a record high, and was linked to the high tariff policies the U.S. imposed on China and other countries.

US-China Tariffs Temporarily Reduced for 90 Days; Exporters Rush to Ship

On May 12, the US and China issued a joint statement in Geneva, Switzerland, announcing that starting May 14, both sides will significantly reduce the tariffs imposed on each other and suspend some non-tariff measures. The average US tariff on Chinese goods will be reduced from 145% to 30%, while China's retaliatory tariffs on US goods will decrease from 125% to 10%. Additionally, the US ad valorem tax on small parcels under $800 will be reduced from 120% to 54%, and the planned increase in specific duties will be canceled.

This agreement is valid for 90 days, until August 9. Experts point out that this period is a crucial window for Chinese exporters. Li Mingyang, General Manager of Zhongshan Letu Electric, stated that due to the previous high tariffs that caused 40 containers to be stranded, they expect to resume shipments to the US. Pang Guoqiang, founder of export service provider GenPark, also noted that many Chinese brands are gearing up to accelerate shipments and conduct market testing during this period.

However, despite the tariff reductions, some products still face cumulative tariffs. For example, the overall tariff on Chinese home appliances exported to the US remains as high as 55%, including 25% from Section 301, 20% related to fentanyl, and 10% reciprocal tariffs. Therefore, exporters need to carefully plan their shipping strategies based on product categories and tariff details.

Cargo Volume Recovery Boosts Demand for Shipping Space; Wan Hai Lines Benefits

As exporters rush to ship, shipping companies are also experiencing market changes. On May 13, Wan Hai Lines (2615) announced its financial results for the first quarter of 2025, with consolidated revenue reaching 37.09 billion yuan, a year-on-year increase of 34.3%; pre-tax net profit was 11.1 billion yuan, a year-on-year increase of 80.77%; and net profit after tax was 8.732 billion yuan, a year-on-year increase of 88.88%, with earnings per share (EPS) after tax at 3.11 yuan. The company stated that the main reason for profit growth was the increase in freight rates compared to the same period last year, and effective control of operating costs.

Wan Hai indicated that although the US-China tariff war had temporarily slowed and deferred US-bound container shipping, with the temporary agreement reached between the two sides, shipments from mainland China are expected to quickly rebound, and demand for shipping space is likely to surge. The company noted that freight rates on Asian routes have grown by more than 30% compared to the same period last year, with overall cargo volume performing well. These regional routes account for about 40% of consolidated revenue, providing important support for operational stability.

Additionally, long-term contract prices on US routes have increased by 30% to 40% compared to last year, indicating that end-market demand remains resilient. Wan Hai emphasized that aside from the impact on Chinese exports to the US, export momentum in other regions remains strong.

Expanding Routes and New Ship Deliveries; Wan Hai Strengthens Capacity Layout

To meet market demand and boost competitiveness, Wan Hai continues to expand its routes and fleet size. In April 2025, the company launched a direct route from Vietnam and Thailand to East India (TTX); in May, it partnered with Ocean Network Express (ONE) and Regional Container Lines (RCL) to operate a route from China to Indonesia and Malaysia (CS2); in June, it will collaborate with Emirates Shipping Line (ESL) to open a direct route from India to the Eastern Mediterranean (IM2). These new routes will integrate with the existing network to form a more extensive transportation system.

In terms of vessel capacity, Wan Hai will add three new 13,000 TEU vessels to its operations this year (one of which has already been delivered). Between 2026 and 2030, the company plans to receive 34 new vessels, including 2 of 7,000 TEU, 20 of 8,700 TEU (including 4 options), and 12 large vessels of 16,000 TEU, with a total additional capacity of 380,000 TEU.

To enhance vessel operational efficiency and achieve ESG goals, Wan Hai is also actively promoting energy conservation and emission reduction. In April 2025, the company signed contracts with South Korea's Hyundai Samho Heavy Industries and Samsung Heavy Industries for two 16,000 TEU methanol dual-fuel new ships each, totaling four ships, with amounts ranging from $748 million to $816 million, and plans to gradually phase out older vessels.

References

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