The US and China reached a 12-month trade war truce this week, including lowering fentanyl tariffs by 10% and suspending port fees – but it will not halt the decline in ocean container freight rates in 2026.

Average spot rates from China to US West Coast on 31 October are down 59% year-on-year at USD 2147 per FEU (40ft container). Spot rates into the US East Coast are down 48% year-on-year at USD 3044 per FEU.

Declining spot rates coincide with falling volumes on Transpacific trades, with latest figures showing container shipping demand from China to US down 13% year-on-year in August.

Emily Stausbøll, Senior Shipping Analyst at Xeneta, said: “The US-China truce is a positive development, but it will not suddenly breathe life into weakening ocean container shipping demand on Transpacific trades.

“Tariffs are still high despite the truce and US shippers will use the first half of 2026 to draw down inventories built up through frontloading imports earlier in the year to protect supply chains in the wake of the escalating trade war.

“Xeneta expects global average spot rates to fall up to 25% for the full year 2026 and long term rates to drop up to 10% against this backdrop of subdued demand between the world’s two most powerful trading nations.”

Major challenges for carriers in 2026

The Xeneta forecast for 2026 would put global average long term rates 20% below levels in December 2023, prior to escalation of conflict in the Red Sea.

Stausbøll said: “The US-China truce sees the removal of port fees for ships calling at both sides of the Pacific. This is welcome news for carriers, with some being hit with multi-million-dollar port fees, but they are still heading towards potentially loss-making territory if long term contract rates drop significantly below pre-Red Sea Crisis levels at the end of 2023.

“Overcapacity of container shipping supply will be rampant in 2026 against subdued demand. 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.”

Truce does not provide long term stability

The agreement between the US and China is a 12-month truce rather than a long-term trade deal – leaving carriers and shippers in uncertain positions.

Stausbøll said: “Once again we see trade used as a weapon in geo-political wars. USTR port fees have been paused without any progress being made on the issue that was nominally cited as the reason they were needed – strengthening US shipbuilding. Carriers have already repositioned vessels across global shipping services to deal with the threat of the port fees and this disruption is now seemingly all for nothing.

“This agreement is temporary and it lacks detail, so shippers looking to make long term supply chain decisions are left in limbo. 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.

“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.”