Keeping your supply chain agile during the 90-day U.S.–China reciprocal tariff pause

From 14 May to 14 August 2025, the reciprocal tariffs between the U.S. and China have been temporarily lowered from 125% to 10%, offering businesses much needed breathing room and – at least for now – a measure of certainty to plan. Shippers looking to capitalise on this narrow window will need to secure freight capacity, prioritise faster shipping routes, and expedite purchase orders to ensure goods clear U.S. customs before the tariffs revert to their punitive levels.

For supply chain managers and logistics decision-makers, particularly those involved in Transpacific trade this will require a careful balance of speed and careful planning. 

Zencargo VP Global Ocean Freight Anne-Sophie Fribourg and VP Growth & Expansion Michael Starr broke down the situation on a recent webinar Tariff Talk: What the 90-day U.S.–China tariff pause means for your supply chain – to explain what this reciprocal tariff pause looks like, outline the immediate impact on cargo volumes, capacity, and rates, and help you chart a path forward.

What changed and why it matters

After an initial announcement that sent ripples through economies from the U.S. to China, the U.S. government has now offered a significant, albeit temporary, de-escalation in the ongoing trade friction.

Here’s a breakdown:

• The U.S. has reduced the 125% IEEPA (International Emergency Economic Powers Act) reciprocal tariffs on a range of Chinese goods to 10%. This reduction took effect on May 14th, 2025, and is valid for 90 days.
• It’s important to note that there is no current expectation of refunds for reciprocal tariffs paid at the 125% rate between April 5th and May 13th, 2025 (though standard duty drawback provisions may still apply).
• The separate IEEPA tariffs related to fentanyl on Chinese goods remain at 20%. This means the total effective tariff rate for many Chinese goods, considering previous Section 301 tariffs, is now effectively 30% during this pause.
• Tariff rates on postal items (de minimis shipments) valued at $800 or less have also seen a reduction, from 120% to 54%, with an alternative option to pay a $100 flat fee. This aligns the de minimis tariff rates with the broader de-escalation.

In a reciprocal move, China has also reduced its retaliatory tariffs on U.S. goods from 120% down to 10%.

The 90-day pause is expected to expire around August 14th, 2025. 

Given that the tariff rate applies upon entry and consumption, businesses should anticipate that mid-July is realistically the latest window to ship goods from China to take advantage of the 10% rate, accounting for typical transpacific transit times. 

As always with the rapid rate of change in administration policies, there’s always a possibility of an extension or a broader trade deal, but hoping for a specific outcome remains a risky strategy.

Immediate market impact: a demand rollercoaster

The tariff pause has triggered a significant bullwhip effect in the ocean freight market. Prior to the pause, the high 125% tariffs led to a sharp downturn:

• April saw a dramatic slowdown, with U.S.-bound cargo from China experiencing cancellations and postponements. Some shipping lines reported a 50% slowdown in volumes from China to the U.S. in the latter half of April and into May.
• Container bookings from China to the U.S. plummeted by as much as 45% year-on-year by mid-April. An estimated 300 containers per day were subject to last-minute cancellations in April. This left some vessels departing Asia half-empty.

Following the May 14th announcement, the market has seen an explosion in demand

A sharp rebound in Transpacific cargo volumes is now underway, with some forecasts suggest volumes could even surpass the peaks seen during the COVID-19 pandemic in 2021-2022. This surge is conicides with the traditional peak shipping season, further intensifying pressure.

What does the tariff pause mean for shipping capacity?

Carriers reacted to the April slowdown by withdrawing capacity from Transpacific routes, redeploying vessels to other trades like Asia-Europe or Asia-South America. Now, they are scrambling to restore that capacity.

• Major carriers like ZIM, Maersk (MSK), MSC, and CMA CGM reported their vessels as fully booked before the first week of June.
• Some carriers are introducing “extra loaders” (additional sailings) but face challenges repatriating ships from other trades.
• While capacity is gradually being restored, with blank sailings decreasing, it’s anticipated that capacity will only fully align with the resurgent demand by the third week of June.

What does the tariff pause mean for shipping rates?

This demand surge and capacity crunch are inevitably impacting freight costs:

• Spot rates on the Transpacific have increased following General Rate Increases (GRIs) implemented around May 15th.
• Rates are expected to exceed $6,000 per 40′ container to the U.S. West Coast and $7,000 to the U.S. East Coast in June.
• Peak Season Surcharges (PSS) have also been announced for fixed-rate contracts, some beginning as early as mid-May and ranging from $2,000 to $4,000 per container throughout June.

Carriers are capitalising on this window of heightened demand and tight capacity to improve yields. The Drewry World Container Index composite saw an 8% weekly increase around May 15th, with Shanghai-Los Angeles rates jumping 16% and Shanghai-New York up 19% in that week alone.

Other facts complicating the picture for shippers

While the 90-day pause offers immediate relief, there are also other regulatory pushes that add complexity.

The U.S. continues its Section 301 investigation targeting China’s maritime, logistics, and shipbuilding sectors.

Looking further ahead, U.S. ports are slated to introduce escalating fees on Chinese-owned or Chinese-built vessels starting from October 2025, adding future cost implications tied to vessel origin and ownership that carriers and shippers will need to prepare for.

How to make the most of the tariff pause

The 90-day tariff pause is a temporary reprieve, not a long-term solution. Shippers need to act swiftly and strategically:

Set your timers

The window to benefit from the lower 10% tariff is narrow. With the pause expiring around mid-August and the tariff applying on entry, shipments realistically need to depart China by mid-July at the latest.

Create clear forecasts and book early 

Share clear purchase order forecasts with your logistics partners, ideally broken down per port pair, through to mid-July. This is a moving target for many, but transparency is key. Also, book your freight as early as possible to secure capacity. While current rates may seem high compared to a few months ago, they pale in comparison to the cost of a 125% tariff.

Build flexibility into plans

Now is the time to lean on your partners. Maintain close communication with your freight forwarders and carriers to monitor market changes, including capacity adjustments, alliance changes, and the availability of niche carriers.

Be prepared to consider alternative routings. For example, East Coast importers might need to route cargo via the West Coast and then use domestic trucking, especially given longer East Coast transit times and recent capacity cuts on all-water services. This can be cheaper than risking the return of higher tariffs.

Finally, build in buffer time for potential rolled cargo and other space issues, particularly as carriers manage the current demand surge.

Develop a dual rate strategy

Work with partners to develop both short-term (for this 90-day window) and long-term rate strategies. What makes sense now might not be optimal for the entire year.

Prioritise customs strategy

Consult with legal, tax, and customs brokerage professionals to ensure your routings and documentation are compliant and cost-efficient.

And while it’s tempting to look for workarounds, ensure you maintain transparency in all tariff mitigation efforts to avoid regulatory red flags.

If you haven’t already done so, now is the time to integrate customs planning deeply into your overall supply chain strategy.

Getting the support you need

Charting a path through this period of volatility requires expertise and proactive partnership. At Zencargo, we are taking concrete steps to support our clients with flexibility, reliable data and tailored services. 

• Secured capacity: We have pre-booked capacity on key Transpacific lanes through mid-July and are continuously working to secure space. This includes capacity not just from mainland China but also increasingly important Southeast Asian origins like Vietnam and Thailand.
• Diversifying carriers: We maintain a broad portfolio of carrier partners and are actively engaging with niche carriers and new services to provide flexible options.
• Constant carrier dialogue: Our teams are in daily contact with carriers at both global and local levels, from trade management at HQs to local port operations, to monitor the evolving market and proactively address potential issues.
• Long-term stability: We work to secure long-term contracts where beneficial, offering price stability and guaranteed space.
• Proactive planning & flexibility: Our strategy focuses on staying ahead of disruptions by planning for various scenarios and building resilient supply chain solutions based on your supply chain data.

The 90-day U.S.-China tariff pause offers a critical, if brief, opportunity for importers to mitigate significantly higher costs on goods sourced from China. However, the underlying trade tensions and propensity for market disruption remain. 

Businesses that act decisively now, armed with robust data, flexible strategies, and strong partnerships, will be best positioned to navigate not only this immediate window but also the uncertainties that lie beyond. 

To discuss how these changes impact your specific supply chain and to explore your customs strategy, speak with a Zencargo expert today.