US Tariff Deadline Could Be About To Shape Transpacific Trade

Declining sales-to-inventory ratios and increased forward ordering are believed to be among the main reasons behind the recent surge in transpacific volumes, alongside the approaching expiry of the current 10% blanket tariff.

Capacity has become increasingly scarce and equipment shortages have emerged across several Asian trades. Meanwhile, the Port of Los Angeles recorded one of its busiest months on record in June, with volumes exceeding one million TEU for only the third time and rising 12% compared with the same period last year.

The early peak season has been driven largely by strong import demand and advance ordering, while geopolitical tensions, higher fuel costs and US trade policy have created a highly uncertain market.

However, the direction of trade for the remainder of the year could be shaped within the next week. The current US tariffs expire this week, bringing another major turning point in American trade policy.

After the Supreme Court struck down President Trump’s IEEPA tariffs in February, the administration responded by introducing a blanket 10% import duty rate under Section 122 of the Trade Act.

Section 122 can only be used for 150 days without Congressional approval, meaning the tariffs are scheduled to expire at 12:01am US Eastern Time on 24 July.

The White House has been working to move tariffs onto other legal authorities, including Sections 232, 301 and 338. The strategy appears to be replacing one legally vulnerable global tariff with several potentially more defensible specific measures, such as recently announcing plans to impose tariffs of up to 50% on selected Canadian products using Section 338.

What happens next could have a significant impact on transpacific trade.

Although no new China-specific rates have yet been confirmed, China is widely expected to remain a primary focus of the revised tariff strategy. Existing Section 301 tariffs could be expanded, with investigations into industrial overcapacity and forced labour potentially leading to additional duties on selected products.

With extensive experience managing transpacific freight and North American fulfilment solutions, the Westbound team is monitoring developments closely. For further information on our North American based supply chain solutions, or to discuss how these developments could affect your business, please do not hesitate to contact us.