Trends to Watch

Talking Tariffs

• U.S. Reduces Tariffs on South Korea: Per a U.S. Trade Representative (USTR) notice released on December 3, the U.S. is reducing tariffs on most Korean imports.
  • Korean goods are now subject to a minimum tariff of 15%. Retroactive to November 14, 2025, Korean goods with a <15% Most Favored Nation (MFN) duty rate are subject to a total tariff of 15%, while Korean goods with a >15% MFN duty rate are subject only to that MFN duty. Korean autos and auto parts are subject to the same duty structure, retroactive to November 1 instead of November 14.
  • Korean furniture and vanity products are subject to a reduced 15% Section 232 tariff, while certain Korean civil aircraft and aircraft parts are exempt from Section 232 and reciprocal duties. These changes are retroactive to November 14.
• Mexico to Implement Customs Reforms: The Mexican government intends to implement a series of customs reforms on January 1, 2026, including new regulatory controls on its Manufacturing, Maquiladora, and Export Services Industry (IMMEX) program.
  • The IMMEX program allows foreign companies to temporarily import goods into Mexico duty-free for manufacturing or assembly prior to re-exportation. IMMEX underwent a major overhaul in December of 2024, when President Claudia Sheinbaum introduced restrictions on a wide range of textile products imported through the program. Given these restrictions, along with the end of the U.S.’s de minimis exemption in August, many businesses have shifted fulfillment operations from Mexico to the U.S.
  • As part of Mexico’s upcoming reforms, businesses still leveraging IMMEX will face stricter documentation requirements concerning the industrial processes that their products undergo in Mexico prior to re-exportation. Businesses will also face tighter measures when it comes to documenting relevant transactions, contracts, and inventory records.
  • The upcoming customs reforms will also increase administrative penalties, with steep fines for non-compliance with certain import regulations.
• U.S. to Exclude U.K. Pharmaceuticals from Section 232 Tariffs: On December 1, the U.S. and the U.K. announced an agreement in principle on pharmaceutical pricing. Per the agreement, the U.K. has agreed to a 25% increase in the net price it pays for new medicines, among other expenditure-related stipulations. Meanwhile, the U.S. will exempt U.K. pharmaceuticals, pharmaceutical ingredients, and medical technology from Section 232 tariffs, once those duties take effect. Finally, for the rest of President Trump’s term, the U.S. will also abstain from targeting U.K. pharmaceutical pricing practices in future Section 301 investigations.
• U.S. Extends Existing Section 301 Product Exclusions: On November 26, the USTR officially extended all 178 existing exclusions from Section 301 tariffs on China. Previously due to expire on November 29, 2025, these exclusions will remain in place until November 10, 2026, as agreed upon in last month’s U.S.-China tariff truce.
• Other Recent Developments:
  • On November 26, the U.K. announced that its duty-free exemption for goods valued under £135 will be eliminated by March of 2029. The announcement comes just weeks after the EU announced the upcoming end of its own duty-free exemption for low-value parcels, while the U.S. officially eliminated the de minimis exemption back in August. Currently, low-value goods imported into the U.K. qualify for customs duty relief, and are only subject to value-added tax (VAT).
  • On November 24, U.S. Secretary of Commerce Howard Lutnick and U.S. Trade Representative Jamieson Greer suggested a potential reduction in steel and aluminum tariffs on the EU, contingent upon the EU implementing a “balanced approach” to modifying digital regulations that impact major American technology companies. In recent months, the EU has raised concerns about the wide-ranging scope of the U.S.’s steel and aluminum duties, especially after the U.S. added 407 HTS codes to its list of covered derivative products back in August.
  • On November 20, President Trump issued an executive order expanding the list of products exempt from the additional 40% IEEPA tariff on Brazil that took effect in August. Recently implemented exemptions include Brazilian coffee, beef, and many other agricultural imports, applicable retroactive to November 13, 2025. Brazilian-origin goods subject to this order and President Trump’s November 14 order, which expanded the list of agricultural goods exempt from reciprocal tariffs, are fully exempt from IEEPA tariffs.
  • The EU intends to introduce a transitional solution for eliminating its €150 duty-free threshold as soon as 2026. Beyond duties and increased costs, businesses should expect to see new compliance and data reporting requirements; updated procedures for duty collection and remittance; and a modified Import One-Stop Shop (IOSS) scheme, the system that streamlines the declaration and payment of VAT on EU goods valued under €150. Check out our blog for more details, including timelines and potential impacts on ecommerce businesses.
  • Find the latest tariff and trade developments on our live blog.

Calculate your tariff and landed cost impacts in real time with the Flexport Tariff Simulator.

Ocean

TRANS-PACIFIC EASTBOUND (TPEB)

• Capacity and Demand:
  • Capacity is stable, with over 80% of planned vessel capacity expected for the remainder of December.
  • Demand remains stable and flat. The market did not experience a volume surge in response to the previously anticipated November 1 tariff hike, which suggests a “wait-and-see” approach from cargo owners and the absence of a significant demand-driven “peak.”
• Freight Rates:
  • Market pressures continue to hold down ocean rates, and we have begun to see mitigation in the December 1 rate increases.
  • The Peak Season Surcharge (PSS) has been further postponed to January, given weak market demand in December.

FAR EAST WESTBOUND (FEWB)

• Capacity and Demand:
  • Routes are firm as we enter December. Carriers are carefully managing capacity, and demand remains steady.
  • Idle capacity is low, at around 0.9%. Approximately 2.1% of vessels are docked for repair or refitting, further reducing available space.
  • Persistent congestion at major North European ports has extended vessel turnaround times and led to delays in Far East vessel arrivals. Services with short transit times are severely overbooked, resulting in an increase in cargo rollovers.
  • Overbooking on mainleg vessels has further extended transshipment dwell times in Southeast Asia, posing schedule reliability challenges for feeder port cargo throughout December.
  • Demand is supported by robust ecommerce exports from Asia to Europe and solid European import volumes, which has helped stabilize the short-term spot market.
  • With some Suez Canal transits for eastbound voyages expected to resume in January, turnaround efficiency is likely to improve. However, the overall impact on FEWB supply and demand dynamics remains to be seen.
• Equipment:
  • Equipment inventory across Far East origins remains healthy, but may tighten if vessel delays and rollover issues continue.
• Freight Rates:
  • Carriers announced Freight All Kinds (FAK) increases and General Rate Increases (GRIs) for the first half of December, pushing spot indexes like the Shanghai Containerized Freight Index (SCFI) and Xeneta Shipping Index (XSI) higher. These GRI attempts were only partially successful, but helped reinforce the upward trend in the market.
  • Due to widespread port delays and cargo rollovers at major origins, year-end replenishment cycles have been prolonged. Leading carriers have introduced additional GRIs and premium products with guaranteed space for the second half of December.
  • Spot rates are expected to remain elevated through the Christmas and New Year holiday period. Sharp short-term declines are unlikely.

TRANS-ATLANTIC WESTBOUND (TAWB)

• Capacity and Demand:
  • Northern European ports are experiencing persistent congestion driven by labor disputes, infrastructure bottlenecks, and inland disruptions. This has led to ongoing vessel delays, over 90% yard utilization, and poor schedule reliability at Rotterdam, Antwerp, and Hamburg.
  • Mediterranean ports—including Valencia, Piraeus, Algeciras, Barcelona, Genoa, and La Spezia—continue to report elevated congestion, with high yard utilization and vessel berthing delays exceeding two days.
• Equipment:
  • Critical container and chassis shortages persist in Austria, Slovakia, Hungary, Southern and Eastern Germany, and Portugal, causing operational setbacks and limiting equipment access.
  • Although Southern European ports face fewer problems, tight equipment supply remains a widespread issue with impacts across the entire network.
• Freight Rates:
  • North Europe and West Mediterranean: Carriers are maintaining low rates throughout December amid weak demand and overcapacity. Spot rates are stable at historic lows.
  • East Mediterranean: High demand prompted November Peak Season Surcharge (PSS) announcements. However, carriers have delayed implementation until mid-January of 2026 as East Mediterranean volumes fail to offset weak demand in the West Mediterranean.

INDIAN SUBCONTINENT TO NORTH AMERICA

• Capacity and Demand:
  • Supply continues to outstrip demand on routes from the Indian subcontinent to the U.S. Demand from India remains soft after August’s tariff escalation, but activity from other countries in the region—including Pakistan, Bangladesh, and Sri Lanka—remains positive.
  • To the U.S. East Coast: There are fewer blank sailings announced for December than in November.
  • To the U.S. West Coast: Capacity remains available, given supply dynamics on the TPEB into the U.S. West Coast.
• Freight Rates:
  • To the U.S. East Coast: As we enter December, the market has declined further on base lanes. There is not enough demand in the market for rates to hold.
  • To the U.S. West Coast: August’s tariff increases and oversupply on core TPEB lanes continue to maintain low rate levels.

Air

• North China:
  • Market conditions remain strong as elevated demand from both general cargo and ecommerce continues to sustain high rate levels.
  • Capacity is tight and volumes remain robust, with no signs of softening expected in the near term.
  • This strong demand environment is projected to continue at least through mid-December, maintaining current pricing levels.
• South China:
  • The market remains under pressure as high demand drives ongoing tightness in capacity.
  • As we head into the holiday period, seasonal peaks and equipment challenges are contributing to further rate increases.
  • Shippers are encouraged to book shipments well in advance and consider premium service options to secure space.
• Taiwan:
  • Strong demand, particularly for high-tech and manufacturing-related cargo, continues to drive market activity.
  • Space remains tight across major trade lanes.
  • Rate levels have seen noticeable increases since previous weeks.
• Vietnam:
  • Air freight capacity from Vietnam remains extremely constrained as strong demand continues to outpace supply. Most space is fully booked well in advance, and congestion persists on major Trans-Pacific routes.
  • Market visibility remains limited. Due to constant fluctuations in demand, airlines and forwarders have encountered challenges in confirming available space and flight schedules.
  • These conditions are expected to continue through the coming weeks. Early bookings and flexible routing remain essential for securing uplift.
• Cambodia:
  • Demand continues to rise, leading to increased pressure on available capacity across Trans-Pacific and Europe-bound lanes. Heavy congestion remains.
  • To secure space during this high-demand period, shippers are encouraged to book at least two weeks in advance.
• South Korea:
  • Space remains difficult to secure, given limited capacity and high utilization.
  • Most shipments are moving via direct services, which continues to set the tone for prevailing market levels.
  • Tight conditions are expected to persist into next week.
• Malaysia:
  • Congestion at major hubs has resulted in extended transit times across Trans-Pacific and Europe-bound routes, with reported delays of several days.
  • Shippers are encouraged to plan ahead and explore alternative routing options or trucking transfers from secondary airports where possible.
• Indonesia:
  • Steady demand continues to put pressure on major international routes, particularly toward North America and Europe.
  • Congestion at origin airports and transshipment hubs has resulted in delays and elevated rate levels.
  • Early bookings remain critical for securing space.
• Thailand:
  • Strong and stable demand continues to define the market, with limited ad hoc capacity. Advance bookings are required for most lanes.
  • As peak season continues, current conditions are expected to hold through mid-December.

(Source: Flexport)

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

Webinars

Air Market Predictions for 2026

Available On-Demand

North America Freight Market Update Live

Thursday, December 11 @ 9:00am PT / 12:00pm ET

Ocean Timeliness Indicator

Transit time increased from China to the U.S. West Coast, China to the U.S. East Coast, and China to North Europe.

Week to December 1, 2025

Transit time increased from 33.8 to 34.9 days from China to the U.S. West Coast; 49.1 to 52.5 days from China to the U.S. East Coast; and 60 to 60.8 days from China to North Europe.

See the full report and read about our methodology here.