Import costs from Asia nearly quadrupled in two weeks as U.S.-China truce begins
05/30/2025
The tariff war between the United States and Chia has triggered a sharp spike in maritime freight costs in Brazil over the past two weeks, following the announcement of a 90-day truce between the two countries. According to data from consultancy Solve Shipping, import rates from Asia to Brazil are expected to reach $4,000 per container in June, almost four times higher than in April, when the tariffs were first announced.
The surge stems from the temporary reduction in tariffs, which has led to the diversion of ships and containers to the U.S.-China route, explained Leandro Barreto, partner at Solve Shipping.
“When the tariffs were first announced, many voyages between the U.S. and China were canceled, driving global freight rates down. Initially, the trade war pulled freight rates lower, but now there’s a backlog of cargo, and within these 90 days, it’s like trying to push an elephant through the eye of a needle,” Mr. Barreto said. “Retailers in the U.S. are expected to restock inventories for Black Friday and Christmas during this window because no one knows what will happen afterward. As a result, ships from other routes are being redeployed.”
In just one week, Asia-Brazil freight rates jumped more than 100%, reaching around $3,300 per container, according to Andrew Lorimer, CEO of consultancy Datamar. He expects prices to continue rising in the coming weeks.
“Shipping companies have moved up the General Rate Increase [GRI], which is typically applied during peak demand periods—in Brazil, between July and September, when companies stock up for the Christmas season,” Mr. Lorimer explained.
The market is already seeing reports of blank sailings—canceled voyages—by shipping companies, indicating a reduction in available vessel capacity.
Moreover, container shortages are beginning to emerge and could also impact export routes, Mr. Lorimer said.
Mr. Barreto also warned of the risk of a shortage, especially of refrigerated containers. “At this time of year, reefer containers are already in short supply due to harvests in other regions, so the situation could worsen,” he warned. One mitigating factor might be a decline in Brazilian demand due to the avian flu outbreak, which could curb exports and ease upward pressure on freight rates.
The price surge marks the first significant impact of the tariffs on freight costs in Brazil. Earlier this year, imports were on the rise. Between January and April, container imports grew 10.7% year-over-year, totaling 1.136 million TEUs (twenty-foot equivalent units), according to Datamar.
David Pinheiro, partner at Cargo Sapiens, believes demand increased primarily after the tariff announcement in April. “There was a shift of Chinese exports away from the U.S. to other markets, including Brazil,” he said. Mr. Lorimer, however, cautions that it is unclear whether the early-year rise in imports can be directly linked to the tariffs.
Expectations are that freight rates will remain high during the 90-day truce. For Mr. Lorimer, the major question is what will happen afterward. “Possibly, trade agreements will be established by then, which could ease freight rates. Nonetheless, this issue will likely see some back and forth.”
Another important factor is how tariff negotiations between the U.S. and Europe will unfold, as European ports are already facing congestion for other reasons. “It’s a large market, and an agreement has not yet been reached, which raises uncertainties. There’s already significant congestion in Europe due to low river levels and labor shortages, complicating the entire freight environment, worsening the container and vessel shortage, and pushing prices higher,” Mr. Lorimer said.
Mr. Pinheiro added that making projections is difficult. “The supply chain is so complex that predicting outcomes would be bold. It depends not just on tariffs but also on volumes, vessel availability, and geopolitical conflicts. The market has been very dynamic.”
*By Taís Hirata — São Paulo
Source: Valor International
https://valorinternational.globo.com