Tariff break, new increase in freight deliveries

Another trade boost from China to the USA should be in operation, according to retailers and logistics managers, since the initial trade agreement that the USA and China has affected caused the importers to advance the programs during the 90-day break for the steepest tariffs of President Donald Trump.

On Monday, the US and Chinese governments announced a trade agreement, although the details of the US China package are still sketchy. In the short term, the most important aspect of the agreement is to suspend the so -called mutual tariffs, although the wide 10% tasks remain, as well as a 20% tariff in connection with fentanyl.

“I have customers with thousands of containers who are pre -contaminated in China who are ready to come in,” said Paul Brashier, Vice President of the Global Supply Chain in his logistics. In the next four to six weeks he expects an increase in the containers and calls the 90-day break “the decisive moment for planning the supply chain from China”.

“The 30% tariff for 90 days begins with the reproduction of goods for small companies,” said Bruce Kaminstein, member of NY Angels and founder and former CEO of Cleaning Products Company Casabella. But the appearance for small companies will not remove their larger concerns. “They are held hostage to an unpredictable guideline. Companies are in difficult situations, so they somehow do this work as they always do,” he said.

“The senders did not stop tariffs to 20% level in March and April, “said Juda Levine, research manager at Freightos.” The USOZean's import volumes rose by 11% in this route compared to the previous year. Therefore, the current value of 30% should restart the senders who directed a possible tariff hike for August Vorwärts.

Rick Muskat, President of the family-run shoe dealer Deer Hirschhirsch, who imports his goods from China and sold in large retailers, including Macy's, Kohls, JCPenney and Amazon, says CNBC that the 30% tariffs that can resume the programs from China will accommodate the demand for pent-up tariffs.

“Our costs will increase at 40%,” said Muskat. “So we have to increase the prices for autumn deliveries.”

The timing of holidays will lead to even more frontloads by importers, said Muskat. Without knowing whether a permanent deal is achieved, and with the majority of the holiday goods that China have to leave in August and September, “there will be a lot of refund stocks due to the uncertainty of the 90-day break,” he said.

The Trump administration for a trade policy that has already cost its business is still frustrated. Muskat said that Hirschhirsch had a show that was exposed to the 145% tariffs that were brought to a bound warehouse -a safe storage facility, which is supervised by US -Zoll without having to pay tariffs -to wait and check whether the tariffs would be reduced. The additional storage costs for this one container are well over 10,000 US dollars. “Now we will release this inventory to our sales center and have started all the associated costs for no good reason!” Said nutmeg. “It all adds up.”

Rising costs in the global supply chain

Reduced tariffs for Chinese goods with 30% will also take place in view of the increasing costs in the supply chain, since more companies are again on orders. In view of the typical gross margin for consumer goods companies in the range of 40 to 50%, a tariff of 30% is difficult to work in many business models, said Kaminstein.

“For importers overall, the level of 30% can still make its product and general profitability as a challenge,” said Alan Baer, ​​CEO of the logistics company OL USA. “Volume increases, space and price can be another hurdle to jump over the number of empty sailing announced by the airlines.”

Empty sails of freight ships from China are on the rise throughout the entire trade war.

Xeneta data show that the four-week rolling average for the offered ship capacity on the transacific trade route from China to the US west coast has dropped by 17% since April 20. The sailing substances rose by 86% in the same period.

A combination of price increases and a certain absorption of margins through companies and a reduction in fixed expenses is required, said Kaminstein, and big questions remain unanswered for business owners: “The unpredictable is a killer for companies. Unbeard of the future?”

Steve Lamar, CEO of the American Apparel and Footwear Association, says that the tariff break is a good development but will not increase prices. “Unfortunately, the rest of 30% (stacked over the existing tariffs of section 301 and MfN) will continue to ensure expensive back-to-school and vacation time for most Americans,” said Lamar. “If the freight prices due to the tariff-induced mail order disorders that take months to handle themselves can further exacerbate costs and prices.”

In some retail niches, the tariffs remain much higher. Matt Priest, CEO of Footwear distributors and retailers of America, announces CNBC that some children's shoes are still exposed to 97.5% due to the existing tasks that are still being raised on the product.

“This is unacceptable. We have described clear, reasonable exceptions in our letter to the administration, and we ask you to take measures to make the burdens of the Americans easier. Our industry needs relief – and also the families we serve,” said Priester.

Say critical industries

In addition to retail, the CEOs in the entire economy continue to speak to the legislator about the effects of tariffs in critical industries while they are hurrying to achieve orders. Eric Byer, CEO of the Allianz for Chemical Distribution, said the damage to the chemical supply chain has been arranged, and now there will be a use of activity to fill the inventory during the new tariff during the break, whereby some time gaps in which are possible does not provide care.

“A few of our biggest members at the weekend said that the supplies they all did would surprise to the Memorial Day,” said byer. “After that, fear is committed when the warehouses, which are now in the full range of 80 to 90%, are falling steeply, which is probably less than 10% of less than 10% by the end of June,” he said. “I suspect that we will see an incredibly active order that is ready for a few ships to meet demand (like Covid again),” he added.

Byer said that the inventory for phosphoric acid is already extremely narrow, which are used in cleaning agents and cleaning products, a variety of drinks (such as lemons, soda, sports drinks, etc.) and in fertilizer. Other chemicals in which the stocks are tight are ascorbic acid that are used in vitamin C, ammonium bicarbonate for the production of baking/cleaning products, and sodium thiocyanate, a critical chemical for concrete that are used in the construction.

The top shipping season will run “hard” in the third quarter

“This will start the top season and run hard until the third quarter,” said Brashier. “There are many construction and manufacturing projects planned for 2026, and these companies have deadlines, and the projects will be staged in early 2026 for breaking the soil.”

All progress in Trump's tax burden and other deregulation policy as well as any interest rate of the Federal Reserve can also attach a program in 2026.

Peter Sand, Chief Shipping Analyst at Xeneta, warns that the increase will lead to an increase in prices for sea cargo. “The sea freight could be up to 20% from China to the west coast of the United States at short notice,” said Sand. That would be a great decline in interest rates. According to Xeneta, the average spot rates have decreased by 56% and 48% from China from China to the west coast of the USA and the east coast of the United States.

“Supers will use the 90-day window of the opportunity to send as many goods to the United States as possible, and this will undergo the pressure on the freight rates,” said Sand. “The airlines reacted to falling volumes from China to the United States by lowering the shipping capacity of the container and putting them to other shops such as the distant east to Europe. It takes time to move the capacity again, so

Stephen Edwards, CEO of the port of Virginia, reports CNBC that it has checked and planned scenarios that would lead to an increase in Chinese containers.

“We have all returned to our financial models of what happened while Covid, what happened during the Panama Canal water restrictions, what happened when the changes in the Red Sea have happened, and other scenarios to see what happened to reduce trade and then recovery,” said Edwards.

He added that the most important thing for the supply chain is to know what the “field” is. “As soon as we know the field, the supply chain is very agile. Yes, there are parts of the supply chain that take longer, but we will all quickly adapt to this new environment,” he said.

“What is now needed is a long-term business only with China, but also for all of our trading partners so that we can make a long-term trade, investment and procurement decisions,” said Lamar.

Matthew Shay, CEO of the National Retail Federation, said that the temporary break was a critical first step in order to offer retailers and other companies a short -term relief at short notice before the holiday season. He added that the US China Agreement “lives the basis for considerable progress” not only China, but with many other nations.

According to Adoniro Cestari, head of commercial and operating capital solutions for Citi, many companies will continue to wait for more security before making significant production and investment decisions. He added that companies, as can be seen during the Covid pandemic, regardless of short-term results, will be more active with risk management Strategies related to possible long -term volatility in relation to tariffs and obstacles.

“The ongoing uncertainty is a difficult way to run a business!” Said nutmeg.