Xeneta: U.S.–China Trade Truce Won’t Stop Container Rate Slide Into 2026

The 12-month trade truce between the United States and China announced this week will not prevent ocean container freight rates from continuing their decline into 2026, according to analysis from Xeneta, a leading ocean and air freight rate intelligence provider.

The agreement, reached in Busan, South Korea, includes a 10% reduction in fentanyl-related tariffs and suspension of port fees. However, spot rates from China to the US West Coast have already fallen 59% year-on-year to USD 2,147 per 40-foot container as of October 31. Rates into the US East Coast are down 48% year-on-year at USD 3,044 per FEU.

Emily Stausbøll, Senior Shipping Analyst at Xeneta, said the truce represents a positive development but warned against expectations of a market revival. “The US-China truce is a positive development, but it will not suddenly breathe life into weakening ocean container shipping demand on Transpacific trades,” Stausbøll said.

The falling rates correspond with declining volumes, with container shipping demand from China to the US down 13% year-on-year in August. Stausbøll explained that despite the truce, tariffs remain elevated and US shippers will spend the first half of 2026 drawing down inventories accumulated through frontloading earlier in the year.

Xeneta forecasts global average spot rates will fall up to 25% for the full year 2026, with long-term rates dropping up to 10%. The forecast would put global average long-term rates 20% below December 2023 levels, prior to the Red Sea crisis escalation.

“Overcapacity of container shipping supply will be rampant in 2026 against subdued demand,” Stausbøll said. “Carriers face an almighty struggle to fill vessels on the critical trades from China to US because the lower tariffs announced this week will not bring about a change in fortunes.”

The agreement includes several key provisions. The US will reduce fentanyl-related tariffs from 20% to 10%, bringing the overall US tariff rate on Chinese imports to approximately 47% from 57%. China agreed to pause for one year its export controls on rare earth minerals and magnets unveiled this month. The US agreed to pause expanded Commerce Department restrictions on technology exports, and China committed to purchasing 12 million metric tons of US soybeans in the current marketing year.

The Trump administration also agreed to pause for one year new port fees on Chinese-built, -owned and -flagged ships, which had been adding millions of dollars in costs per voyage since taking effect October 14. The fees were aimed at reviving US commercial shipbuilding but Stausbøll noted they have been paused “without any progress being made on the issue that was nominally cited as the reason they were needed.”

The temporary nature of the agreement presents uncertainty for industry planning. “It takes longer than 12 months to set up manufacturing facilities in another nation if a shipper wants to shift supply chains out of China,” Stausbøll said. “No one can say with any degree of certainty what the situation will be when the truce expires – or even if the agreement lasts the full 12 months.”

The deal averts Trump’s threatened 100% tariff on Chinese goods and extends the trade truce between the world’s two largest economies for approximately one year.

Subscribe for Daily Maritime Insights

Sign up for gCaptain’s newsletter and never miss an update

— trusted by our 107,107 members