Trade war fallout: Cancellations of Chinese freight ships begin as bookings plummet

 

Trade War Fallout: Cancellations of Chinese Freight Ships Begin as Bookings Plummet

By Steven Orlowski, CFP, CNPR, Orlowski Financial Counsel
April 16, 2025

Global shipping faces a sharp downturn as U.S.-China trade tensions escalate

In a stark sign of deepening global trade tensions, Chinese shipping companies have begun canceling scheduled freight voyages due to a dramatic plunge in international bookings. The fallout from the ongoing trade war between the United States and China is now rippling through global supply chains, threatening to slow commerce, strain already-stressed logistics networks, and unsettle global markets.

Multiple sources in the maritime logistics industry have confirmed that several major Chinese container carriers have either delayed or outright canceled sailings bound for North America and Europe. Industry analysts attribute the cancellations to a sharp decline in demand for Chinese exports, triggered by a new wave of tariffs and counter-tariffs announced earlier this year.

Collapse in Cargo Bookings

The Shanghai Shipping Exchange reported a 27% week-over-week drop in export bookings as of mid-April, with routes to U.S. West Coast ports seeing the steepest decline. Some freight forwarders report cargo volumes have dropped to levels not seen since the height of the COVID-19 pandemic.

“It’s an unprecedented situation,” said Wei Zhang, a logistics manager at a Shenzhen-based freight firm. “Normally, this time of year we’re seeing full bookings ahead of the back-to-school and holiday inventory cycles. Instead, ships are going out half empty — or not at all.”

Escalating Trade War Drives Uncertainty

The dramatic slump follows a fresh round of U.S. tariffs on Chinese electronics, automotive parts, and industrial machinery, met with immediate retaliation from Beijing. While the trade war has been brewing for years, the recent escalations — combined with geopolitical frictions over Taiwan and South China Sea tensions — have created a near-total freeze in forward purchasing.

“Retailers and manufacturers are hitting the brakes,” said Lauren Mendoza, senior trade analyst at PortWatch Global. “Many are shifting their sourcing to Southeast Asia, India, or Mexico. China is no longer the default factory of the world.”

Economic Repercussions Mount

The cancellation of freight sailings is already reverberating beyond the docks. Chinese port operators are warning of falling revenues, and domestic logistics firms are scaling back operations. For China, where exports still account for roughly 18% of GDP, the trade war’s effects are becoming impossible to ignore.

U.S. importers, meanwhile, are feeling the pinch from both rising prices and lengthening delivery timelines as they scramble to secure alternative suppliers. The disruption has particularly affected electronics, apparel, and consumer goods sectors.

Global Supply Chain at a Crossroads

While some economists hope the downturn will pressure both sides to resume negotiations, others warn the damage may already be done. A prolonged contraction in trans-Pacific shipping could reshape global trade flows for years to come.

“There’s a rebalancing happening,” said Dr. Julian Carter, professor of international trade at MIT. “We may be witnessing the unraveling of a decades-long trade relationship that has underpinned globalization.”

Looking Ahead

For now, the shipping industry is bracing for more pain. Maersk and COSCO have both revised down their quarterly earnings forecasts, citing “trade friction-related volume instability.” Meanwhile, smaller shipping firms and independent forwarders fear bankruptcy if the downturn persists into the summer peak season.

With no signs of diplomatic thaw, trade experts caution that the worst may still be ahead. As Wei Zhang puts it grimly, “If ships don’t sail, economies don’t grow.”