Container trade volumes are experiencing a dramatic decline through 2025, driven primarily by escalating tariff conflicts and supply chain regionalization.
The convergence of geopolitical tensions, maritime chokepoint disruptions, and accelerating protectionist policies is fundamentally reshaping global trade patterns, with profound implications for economic stability and supply chain resilience.
US ports handled 2.36 million TEUs in July 2025, but this apparent success masked a darker reality: retailers were desperately stockpiling inventory ahead of punishing tariff increases.
The forecast projects container volumes will crater through year-end, with December expected to reach just 1.7 million TEU, down 20.1% from the previous year and marking the slowest month since March 2023.
The forecast shows systematic deterioration:
- September 2025: 2.12 million TEU (down 6.8% year-over-year)
- October 2025: 1.95 million TEU (down 13.2%)
- November 2025: 1.74 million TEU (down 19.7%)
- December 2025: 1.7 million TEU (down 20.1% – slowest since March 2023)
The collapse stems from multiple converging crises. President Trump’s escalating tariff regime has pushed rates far beyond the initial 10% levels, with India now facing additional tariffs of 50% after a 25% increase took effect in August.
Container trade performance has been uneven globally, with containerized trade showing the lowest growth rate at just 0.4% by tonnage in 2023, significantly underperforming other maritime sectors.
However, specific regional corridors have shown resilience, particularly Far East to developing economy routes, which increased by 20% and 15% respectively to Latin America and Middle East/Indian subcontinent in May 2024.
Meanwhile, ongoing legal challenges have left the entire tariff framework in limbo, with a federal appeals court ruling against Trump’s use of emergency powers while the Supreme Court considers the case.
But tariffs are only part of the story.
Since November 2023, Houthi attacks in the Red Sea have forced major shipping lines to abandon the Suez Canal. Ships now face costly detours around Africa’s Cape of Good Hope, adding 12 days and 42% more travel time to Asia-Europe routes.
Combined with drought-related restrictions at the Panama Canal, these disruptions have created what maritime experts call “the perfect storm” for global shipping.
The crisis has sent freight rates soaring 120% since October 2023, with the Red Sea disruptions alone contributing 148 percentage points to the increase. The trade outlook for the final months of the year is not optimistic, warns Ben Hackett of Hackett Associates, noting how infrastructure vulnerabilities are amplifying policy-driven trade reductions.
Perhaps most significantly, this isn’t just a temporary downturn, it represents a fundamental shift toward regional trade blocs.
Companies are abandoning the efficiency-first model that defined globalization for decades, instead prioritizing friendshoring and supply chain resilience. Mexico has become America’s largest trading partner, while 99% of CEOs report plans to reconfigure their supply chains in response to geopolitical challenges.
Trade flows are increasingly moving toward regional hubs rather than spanning continents, as companies seek to reduce dependence on distant suppliers and vulnerable chokepoints.
This “great unraveling” of global supply chains may permanently alter how goods move around the world.
As legal battles over tariff authority continue and geopolitical tensions show no signs of easing, the container shipping industry faces an uncertain future.
The efficiency-driven globalization model that powered decades of economic growth is giving way to a more fragmented, resilient but potentially more expensive system of regional trade networks.
For consumers, the message is clear: the era of cheap global goods may be ending, replaced by a world where political alignment matters as much as economic efficiency in determining what products reach which markets.
The post How tariffs and geopolitics are reshaping global trade? appeared first on Container News.
