Shipping stocks were big winners early Monday as the U.S. and China agreed to temporarily slash tariffs more than expected following "productive" weekend trade talks. President Donald Trump's tariffs of 145% on China will drop to 30% and could potentially spur at least a partial shipping revival after ships from China to the U.S. almost completely ceased in recent weeks.
The U.S. and China will reduce tariff rates on each other for 90 days in a dramatic de-escalation of a trade war between the world's two largest economies. The U.S. will cut the 145% Trump tariff on most Chinese imports to 30% by May 14, including a 20% tariff tied to fentanyl. China will cut its 125% tariff on U.S. goods to 10%. The U.S. tariff cuts don't apply to the Trump tariffs on steel, aluminum and more.
The tariff cuts are far greater than expected. Several reports late last week suggested the U.S. might cut China tariffs to 50%-60%. Trump posted Friday that 80% "seems right."
"We are in agreement that neither side wants to decouple," Treasury Secretary Scott Bessent said Monday.
Trump Tariffs: What This Means For Cargo Ships
Alan Murphy, chief executive of the Singapore-based research firm Sea-Intelligence, told IBD early Monday that it is difficult to make any "reasonable predictions when policy seems to change on a daily basis," referring to the 90-day tariff reduction agreement between the U.S. and China.
"Normally a pause in tariffs would mean a short-term boost in imports, as importers would front load volumes to get them in before the tariffs come into effect," Murphy said. "But the tariffs during the pause are 30% on imports from China, which is higher than any prior tariffs on China."
Trump Tariffs Were An Earthquake. The Trade War Tsunami Is Hitting U.S. Ports.
Murphy explained that now "importers are left to gamble: Do you front load volumes now, in fear of higher tariffs once the pause is over, or do you wait and see, in case tariffs are lowered further."
He added that he believes "most importers" are "in the dark on how to best address this situation."
William Blair macro analyst Richard de Chazal wrote Monday that the 90-day tariff deal, which extends to Aug. 14, with China is "encouraging" but that it is not yet clear "what either side is demanding to make these reductions permanent."
"After a very sharp drop, tonnage data has been improving and is now 19% higher than a year ago, though the ship count is still 6% below last year," Chazal added, of U.S. port activity.
"Ultimately, companies are still in limbo over the extent to which they should be restocking, as this will depend on the scope of any new deal and how soon it can be finalized before those inventories are run down, shelves start to look empty, and companies start to lay off workers," he added.
Meanwhile, on Thursday, global shipping giant Maersk's Chief Executive Vincent Clerc told analysts on the Q1 earnings call that if a "de-escalation was to happen" it is likely that there would be a "catch up effect where at some point the situation resolves itself and then you see a much stronger demand coming out of China."
"If the tariffs go away, they will reopen the gates for purchase orders and parts purchase," Clerc added. "If they don't, I don't think our customers, at this stage, have a good playbook."
This comes as U.S. importers, after the Trump tariff announcement on April 2, scrambled to cancel any order that could be canceled. That included toys, sports gear, apparel, shoes and some furniture coming from China.
In early May, Murphy estimated that shipping lines were canceling sailings from China, around 20% to 30% weekly. The only other times such supply declines take place is during the Chinese New Year and Golden Week, when China's economy largely shuts up shop.
Shipping Stocks
Container liner and logistics company ZIM Integrated Shipping surged around 14% during Monday's stock market action. ZIM entered Monday trade down 7% in May.
Port Of Los Angeles Warns 'Difficult Decisions' Ahead As Shipments From China Cease
The 37 stocks in the IBD-tracked Transportation-Ship industry group have collectively declined nearly 17% during 2025. That puts the sector at a weak No. 169 out of 197 ranked industries, with 1 being the best performer and 197 the worst.
Domestic freight company Old Dominion Freight Line advanced nearly 12% during the stock market action on Monday while peer ArcBest popped 14%.
Among other truckers, J.B. Hunt gained around 110% in the stock market. Schneider National advanced 7.7%.
Meanwhile, logistics XPO Logistics popped 14%.
Farm products exporter Archer-Daniels-Midland edged up about 2.9% Monday.
Amazon surged 8%, moving above the 200-day line and perhaps offering an early entry. Walmart edged up a fraction, trading within a buy zone, and Target gained 4.9%. All these big retailers rely on China-made goods. Walmart reports fiscal Q1 results on Thursday.
Global Shipping Continues
Maersk's Clerc said Thursday that the Trump tariffs and trade war between the U.S. and China is basically only hitting those two countries and that volumes in the rest of the world have not yet been disrupted.
"While the level of uncertainty has increased from potentially worse than expected tariffs and ongoing trade tensions, the uncertainty has so far been very U.S. centric rather than global," Clerc said Thursday.
Shipping Giant Changes Outlook; Outlines Scenarios For U.S.-China Trade Talks
Clerc's comments about continued strong global demand reflects in stocks like international container-freight shipper Euroseas. Its shares gained nearly 8% last week, adding to a three-month rebound. Euroholdings, a low-priced stock, and Navios Maritime Partners, also show multimonth rebounds in the current stock market.
Another group of rebounding shipping stocks are oil tanker fleets. Frontline, Teekay Tankers and International Seaways have shown sharp recent gains on downshifting oil prices. Lower oil prices typically point to increased volume sales of oil. Tanker prices generally rise as buyers seek to move that volume.
Please follow Kit Norton on X @KitNorton for more coverage.
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