Trends to Watch

Talking Tariffs

• Supreme Court Tariff Ruling Looms Ahead: As the U.S. Supreme Court prepares to return from a four-week recess, the justices could rule on the Trump administration’s International Emergency Economic Powers Act (IEEPA) tariffs as soon as tomorrow (February 20). If the justices do not issue an opinion tomorrow, the next possible ruling dates are February 24 and February 25.
  • If the Supreme Court rules against the IEEPA tariffs, U.S. Customs and Border Protection (CBP) would likely stop collecting tariff revenue immediately while implementing a refund process. However, it is unclear how much discretion the Supreme Court order would give CBP in how it can issue refunds, or if the justices would first determine which importers are eligible for refunds. Meanwhile, the Trump administration could potentially leverage other statutes—including Sections 301, 232, and 338—to re-implement tariffs or introduce new ones.
  • If the Supreme Court upholds the tariffs, on the other hand, the case could return to the lower courts for another review. Another broad possibility is a ruling that provides partial relief: for example, the Court could uphold some IEEPA tariffs while striking down others.
  • While hearing oral arguments on the case last November, several justices challenged the Trump administration’s assertion that its tariffs aim to “regulate importation” in response to rising trade deficits and a fentanyl-related public health crisis. The Court also questioned whether the tariffs ultimately function as taxes that generate revenue from American citizens, while raising concerns over the complexity of potential refunds.
  • Last month, we launched the Flexport Tariff Refund Calculator to help businesses scenario-plan. Instantly calculate total duties that are potentially eligible for refunds, break them down by duty category, and quickly understand your potential return if the Supreme Court orders refunds.
• CBP to Operate as Usual During Partial Government Shutdown: Operations at CBP remain unaffected by the partial U.S. government shutdown, which began on February 14 due to an impasse over funding for the Department of Homeland Security.
  • CBP employees will continue to process imports and exports at all ports of entry; handle Post Summary Corrections (PSCs), drawback claims, and liquidations; conduct inspections; maintain the Automated Commercial Environment (ACE); issue CSMS messages; and operate Centers of Excellence and Expertise (CEEs).
• U.S. and Taiwan Sign Trade Deal: The U.S. and Taiwan signed a finalized trade agreement on February 12, about one month after initially signing a memorandum of understanding that laid out the general provisions of the deal. It is currently unclear when the trade agreement will take effect. Provisions of the final agreement include:
  • The U.S. will subject Taiwanese goods to a minimum total tariff of 15%: the higher of either the U.S. most-favored-nation (MFN) tariff rate or a 15% rate composed of the MFN tariff and a reciprocal tariff. Currently, Taiwanese goods are subject to a 20% reciprocal tariff.
  • Certain Taiwanese goods covered under Annex III of Executive Order 14346, which President Trump issued last September, will be exempt from reciprocal tariffs.
  • The U.S. will provide Taiwan preferential tariff treatment in the Section 232 investigation into semiconductors and semiconductor manufacturing equipment.
  • Taiwanese businesses will ramp up investment in U.S. semiconductor supply chains, electronics manufacturing and AI applications, energy, and other U.S. sectors.
  • Taiwan will reduce or eliminate 99% of tariff barriers on U.S. industrial and agricultural exports, while providing preferential market access for U.S. autos and auto parts, health products, metals, and other goods. Taiwan will also reduce non-tariff barriers on U.S. autos, medical devices, and pharmaceuticals.
  • The trade agreement does not mention any duty reduction specific to Taiwanese auto parts, timber, lumber, or wood derivative products. Last month’s memorandum of understanding had stipulated that Section 232 duties on these goods would be capped at 15% for Taiwan, as opposed to the 25% duty imposed on most other nations.
• Trump Administration Proposes Universal Fee on Foreign Vessels: On February 13, the Trump administration unveiled its Maritime Action Plan, which aims to levy a universal fee on all foreign-built vessels calling at U.S. ports. The plan does not specify a precise rate, but cites fees of $0.01/kilogram and $0.25/kilogram as examples. The timeline for moving forward with the proposed fee is currently unclear. Additionally, the plan does not include any mention of the U.S. Trade Representative (USTR)’s port fees targeting Chinese vessels, first implemented last October and currently suspended until this November.
• EU Lawmakers Prepare to Vote on Proceeding with U.S. Trade Deal: The EU Parliament may vote on its trade deal with the U.S. as soon as February 24. While the EU and the U.S. initially agreed upon the deal last summer, many of its provisions have remained under EU legislative review. EU lawmakers have also recently proposed certain modifications to the agreement:
  • The EU will re-assess the deal six months after it takes effect, should the U.S. fail to reduce its 50% duty on EU steel derivative products to a baseline of 15% by that date.
  • The EU will void the agreement in March of 2028, at which point the EU and the U.S. must extend or re-negotiate the deal.
  • The EU will suspend the deal if the U.S. undermines or otherwise acts against European territorial integrity. EU lawmakers proposed the suspension clause shortly after President Trump announced and later walked back plans to impose a 10% tariff on eight European trading partners due to their opposition to U.S. control of Greenland.
• Other Recent Developments:
  • On February 11, U.S. Senators introduced the Last Sale Valuation Act, under which the valuation of an imported good would be required to reflect the value of its last transaction before exportation to the U.S. The legislation aims to eliminate the First Sale rule, which enables importers to determine an imported good’s transaction value based on the first transaction in a multi-tiered transaction (e.g., the price an intermediary pays a foreign factory). If signed into law, the Last Sale Valuation Act could lead to higher duties for importers, new compliance requirements, sourcing shifts, and landed cost implications.
  • Effective February 7, Indian goods imported into the U.S. are no longer subject to the additional 25% tariff imposed last August in response to India’s purchases of Russian oil. As part of the trade agreement announced earlier this month, the U.S. also committed to reducing its reciprocal tariff rate on India from 25% to 18%, but has not indicated a timeline for doing so. Currently, the U.S.’s total tariff rate on India is 25%.
  • On February 6, the U.S. and India published an interim trade agreement framework that reinforces many of the trade deal terms announced a few days earlier. The framework also lays out certain other provisions: a preferential tariff rate quota for Indian auto parts subject to Section 232 duties; preferential treatment for Indian pharmaceuticals, if and when those Section 232 duties take effect; mutually beneficial rules of origin; and more. The exact implementation timeline remains unclear.
  • Check out our live blog for the latest tariff and trade developments.

Ocean

TRANS-PACIFIC EASTBOUND (TPEB)

• Capacity and Demand:
  • Demand remains quiet and flat. Most factories across Asia have closed for Lunar New Year.
  • Capacity has been reduced to 57-61% for Weeks 9 and 10, given blank sailing programs taking place through Lunar New Year. Carriers are currently pooling rolled cargo to fill remaining space.
  • Capacity is expected to recover quickly, with the potential to bounce back to over 80% by the second week of March. This could result in oversupply in March if demand does not ramp at the same pace.
• Freight Rates:
  • Overall, the market remains unchanged during the Lunar New Year period.
  • Carriers have pushed Peak Season Surcharge (PSS) decisions to March.

FAR EAST WESTBOUND (FEWB)

• Capacity and Demand:
  • The market has entered the quietest phase of the Lunar New Year holiday period. With factories closed, export demand from Asia has temporarily paused.
  • Carriers are actively managing this downtime with aggressive blank sailing programs, removing ~40% of weekly capacity to prevent oversupply and maintain vessel utilization.
• Operations at Asian Hubs:
  • Transshipment hubs like Singapore remain congested due to the backlog of rolled cargo from the pre-holiday rush, with yard utilization above 90%.
• Operations in Northern Europe: Winter weather continues to hamper operations. Rotterdam and Hamburg continue to report critical yard density (> 85%) and extended dwell times (7 to 10 days).
  • Main yard utilization at Rotterdam: ECT, 80%; Rotterdam World Gateway (RWG), 85%; Delta II, 45%; Maasvlakte II (APMT MVII), 95%.
  • Main yard utilization at Hamburg: HHLA Container Terminal Altenwerder (CTA), 85%; Eurogate Container Terminal (CTH), 95%.
• Freight Rates:
  • Stabilization: Spot rates are softening naturally as demand flatlines. Blank sailings, combined with longer Cape of Good Hope transits, is successfully maintaining a rate floor that exceeds historical averages.
  • Outlook: Post-Lunar-New-Year recovery will be key to determining rate levels in March. Carriers are looking to establish a stronger baseline for upcoming Q2 contract negotiations if demand rebounds in early March.

TRANS-ATLANTIC WESTBOUND (TAWB)

• Capacity and Demand:
  • Demand continues to vary regionally as we head into mid-February.
  • North Europe and West Mediterranean: Demand is firming moderately. This is supported by record tonnages, despite blank sailings limiting capacity.
  • East Mediterranean: Overall, flows remain stronger.
• Equipment:
  • Critical container and chassis shortages persist, particularly in Austria, Slovakia, Hungary, Southern and Eastern Germany, and Portugal. Expect inland delays of 2 to 4 days.
• Freight Rates:
  • Spot rates from North Europe to the U.S. East Coast are holding steady in the low-to-mid $1,500/FEU range.
  • MSC, Hapag-Lloyd, and CMA CGM have announced new Peak Season Surcharges (PSSs) for March from Turkey to the U.S.

INDIAN SUBCONTINENT TO NORTH AMERICA

• Capacity and Demand:
  • While the U.S.’s additional 25% oil-related tariff on India is no longer in effect as of February 7, the U.S. has yet to officially reduce its reciprocal tariff rate on India from 25% to 18%.
  • The market has yet to see an increase in demand as production continues to ramp back up.
  • To the U.S. East Coast: CMA CGM (INDAMEX) and Maersk (MECL) continue to proceed with Suez routings through the Red Sea. Base-port-to-base-port capacity remains available on routings through the Suez and via the Cape of Good Hope.
  • To the U.S. West Coast: Capacity is available on PS3, the sole direct service from India to the U.S. West Coast, and on broader services from the TPEB into the Pacific Southwest (PSW).
• Freight Rates:
  • To the U.S. East Coast: The market could see a March 1 General Rate Increase (GRI), but only if volumes increase dramatically at the end of February. As volumes potentially increase in March, we may see market levels increase into the second half of March.
  • To the U.S. West Coast: Rate levels remain low, but may bounce back if demand rises.

Air

• North China:
  • Currently, capacity is fully booked through February 20 due to holiday-related cancellations.
  • Space and market conditions are expected to gradually stabilize in the final week of the month.
• South China:
  • This year’s holiday peak has been notably muted, with no reports of any significant shipment backlogs.
  • We anticipate a steady return to full productivity as regional factories resume operations between late February and early March.
• South Korea:
  • While space remains tight through February 19, capacity on both Trans-Pacific and Europe-bound lanes is projected to normalize quickly as post-holiday recovery gains momentum.
• Malaysia:
  • The market is seeing a modest uptick in demand for U.S.-bound cargo, particularly through major hub stations.
  • Additionally, the Malaysian ringgit (MYR) has seen a significant appreciation of 12%. This is directly affecting local purchasing dynamics.
• Thailand:
  • The Thai market is operating without holiday interruptions and remains exceptionally stable, with no significant pre-Lunar-New-Year surge. This provides shippers a flexible environment in which capacity and terms are currently highly negotiable.
• Indonesia:
  • Despite a general weakening in overall export volumes compared to previous months, carriers are maintaining a steady pricing floor through disciplined capacity controls rather than immediate reductions.
• India:
  • Demand is trending upward, particularly on Trans-Pacific lanes. This has resulted in tighter capacity and a firmer market environment.
  • Shippers are encouraged to book early to secure priority space.
• Bangladesh, Sri Lanka, and Pakistan:
  • Market conditions in Bangladesh, Sri Lanka, and Pakistan remain remarkably consistent, with stable demand across all major trade lanes and no significant shifts in the regional pricing landscape.

(Source: Flexport)

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

North America Vessel Dwell Times

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Ocean Timeliness Indicator

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

Week to February 16, 2026

Transit time decreased from 34.1 to 33.4 days from China to the U.S. West Coast; decreased from 57.5 to 56.3 days from China to the U.S. East Coast; and increased from 55.6 to 57.3 days from China to North Europe.

See the full report and read about our methodology here.