China's Shipping Slowdown: The Trade War Impact That’s Reshaping Global Freight

In a clear sign that the economic tremors of the U.S.-China trade war are far from over, Chinese shipping activity is experiencing a sharp and sudden contraction. According to a new report by CNBC, freight orders for Chinese ships are in free fall, with some ports reporting double-digit declines in volume and vessel deployment.

This downturn, though not entirely unexpected, signals a deeper structural shift in global trade logistics. For decades, China’s manufacturing prowess and vast shipping infrastructure have driven the global freight machine. But as geopolitical friction, trade sanctions, and economic diversification strategies take hold, the ripple effects are being felt from the South China Sea to global import hubs.

What’s Behind China’s Freight Collapse?

Industry analysts point to a perfect storm of factors. On one hand, Western companies are diversifying their supply chains, sourcing more goods from Southeast Asia, India, and even Mexico. On the other, tariffs and regulatory pressures from the U.S. and Europe have made Chinese goods less competitive in key markets.

According to the report, freight orders for Chinese container ships dropped by nearly 25% in Q1 2025. This decline isn’t isolated — it follows a multi-quarter trend reflecting reduced global demand, tighter inventory cycles, and reshoring efforts from multinationals.

Is Global Trade Decoupling Real?

Experts say the data speaks for itself. While it’s premature to declare the end of globalization, the era of single-country dependence — especially on China — may be giving way to a new, multipolar logistics world.

Companies are increasingly embracing a “China Plus One” strategy. This means China is still part of the equation, but no longer the center of it. The economic and security calculus is shifting — and fast.

Read how other global trends are shaping tech too.

Shipping Giants Feel the Heat

Major shipping companies like COSCO, Maersk, and Evergreen are feeling the pinch. Port activity in Shanghai and Shenzhen has slowed, and idle ships are becoming a common sight. “We’re seeing a drop-off we haven’t seen since COVID-19,” noted one logistics CEO interviewed by CNBC.

For investors and policymakers alike, this slowdown could hint at future economic contractions in industrial output, employment, and trade revenues.

Strategic Realignments and What’s Next

In response, China is expected to push harder on regional trade deals, strengthen domestic consumption, and increase incentives for tech and automation in logistics. However, these transitions take time and investment — neither of which can reverse the short-term freight decline.

From the West’s side, infrastructure is being reshaped to accommodate nearshoring and diversified imports, particularly from nations participating in agreements like USMCA or Indo-Pacific alliances.

The Broader Economic Picture

Freight is the lifeblood of global trade — a decline in volume often precedes or coincides with broader economic slowdowns. As China’s shipping lanes quiet, economists are paying close attention to parallel trends in consumer demand, industrial output, and monetary policy shifts.

This may not be a short-lived dip — it may mark the beginning of a new era in trade, where digital manufacturing, decentralized sourcing, and geopolitical strategy override cost-based logistics planning.

What Should Businesses Do?

If you’re part of the global supply chain, now is the time to reassess exposure, logistics resilience, and sourcing strategies. Consider exploring emerging markets and supply-chain digitization to stay competitive in a post-China-centric world.

Want more in-depth insights like this?

Discover More Trade & Logistics Insights