The United States and China have agreed to a 90-day partial suspension of their trade war, which had previously seen tariffs exceed 100% and additional duties on e-commerce shipments.
Following weekend negotiations, most tariffs imposed since April 2 (which had reached 125%) will be suspended, though a 10% rate will remain from each country. The US will also maintain its 20% tariff related to the fentanyl crisis.
As a result, US tariffs on Chinese imports will now stand at 30%, while Chinese tariffs on US goods will be 10%.
This temporary reprieve could prompt companies to accelerate shipments from China to the US while the reduced tariffs remain in effect. Airfreight rates had slightly recovered last week after several decreases, possibly reflecting reduced market capacity.
TAC explained that the recent trade standoff and high tariffs had led to many canceled block space agreements (BSAs), though this was significantly offset by reduced transpacific freighter capacity.
Following the new US-China trade deal announcement, sources anticipate both volume and capacity to increase as businesses race to restock.
The two countries have committed to continuing negotiations during the 90-day suspension. President Trump has indicated that tariffs are unlikely to return to recent high levels, though when asked if they would reach 145% again, he responded "no" but added they could still go "substantially higher."
Additionally, the de minimis duty for shipments from China and Hong Kong has been reduced to 54% (or a flat $100 fee) from the previous 120%. The elimination of the de minimis exemption for Chinese packages worth under $800 on May 2 had caused a capacity drop between the countries last week, as these packages faced 120% duty rates and increased customs scrutiny.
The air cargo industry has been concerned that high tariff rates and additional customs scrutiny on Chinese e-commerce goods could lead to collapsed volumes and excess capacity.
Meanwhile, transpacific trade capacity has continued recovering after last week's decline. Rotate data shows total cargo capacity between Asia Pacific and North America over the past 24 hours is up 26% compared to the same period last week, with widebody freighter capacity up 40%.
This temporary tariff suspension will likely trigger a significant surge in container shipments as companies rush to capitalize on the 90-day window of reduced duties. This anticipated spike in volume will create substantial delays throughout the supply chain as logistics providers struggle to handle the sudden influx of cargo. Port congestion, customs backlogs, and limited transportation capacity will combine to extend delivery timeframes and create unpredictable shipping schedules.
These conditions make cargo delay insurance increasingly critical for businesses relying on timely deliveries. With the higher probability of shipments being caught in bottlenecks or facing extended transit times, delay insurance provides essential financial protection against the cascading costs of supply chain disruptions. Companies that fail to secure adequate cargo delay coverage risk significant revenue losses and customer dissatisfaction if their goods are caught in the expected congestion, highlighting why proactive risk management through insurance will be more important than ever during this volatile 90-day period.