US tariffs trigger UK-China freight rate surge

UK shipping costs have surged as US tariffs ripple across the global supply chain. Consumers have been warned to expect higher prices as freight costs from China to the UK soar. Industry observers agree that the spike is driven by US firms scrambling to beat new tariff deadlines. There is worry that shipping bottlenecks will reignite UK inflation and undermine an already fragile economy.
The tariff-fuelled panic has pushed up global shipping prices. The effects are being felt keenly, particularly in trade between China and the UK. Prices have surged sharply in recent weeks, as shipping lines buckle under a wave of trans-Pacific demand. Analysts point to US firms accelerating import activity ahead of fresh tariff hikes imposed by President Donald Trump. That scramble has absorbed capacity across key Asia-Europe lanes, triggering a cascade of price hikes.

Intermodal freight accounts for nearly half of all UK rail freight movements; therefore, any factor that may adversely affect international intermodal traffic could have a disproportionately larger impact on UK traffic, potentially resulting in lighter loadings on block trains from deep-water ports, for example. That’s probably not the sort of news that operators will want to hear, given other adverse news lately, such as the potential loss of oil traffic from Lindsey Refinery at Immingham.

Impact felt far beyond the US

According to shipping market analyst Xeneta, average spot rates for a 40-foot container from China to the UK have increased by around 60% over the past three months, reaching 3,305 US dollars. Maritime consultancy Drewry reports a similar spike, warning that the upward pressure is spilling into European lanes. “It all adds up,” said Peter Sand, chief analyst at Xeneta, speaking to global media sources. “We expect the lion’s share of these inefficiencies to stick around throughout the year.”

While the White House’s tariff escalation is aimed at Beijing, the knock-on effects are being felt across global supply chains. UK retailers, already squeezed by razor-thin margins, are bearing the brunt. “Inflated freight prices continue to add pressure to retail supply chains,” said Andrew Opie, director of food and sustainability at the British Retail Consortium, quoted by several sources. “In a low-margin, competitive market, shipping adds to already significant costs.”

Inflation threat returns to the UK horizon

Higher container rates are increasing the cost of imported goods, especially from China, which remains a major source of UK retail stock. Official trade figures show Chinese exports to the UK rose 11% year-on-year in April, compounding the congestion. The timing couldn’t be worse for UK policymakers. With inflation in the UK still almost twice the Bank of England’s 2% target, the central bank had been hoping to start easing interest rates gradually. They have been on hold since May. Now, however, rising shipping costs risk derailing those plans.

Jonathan Steenberg, UK and Ireland economist at Coface, the global credit insurance and risk management company, estimates that elevated freight rates could add as much as 0.3 percentage points to the consumer-price index in Q3, pushing it to 3.6%. “We are a pretty open economy in the UK,” said Steenberg in a report last week. “We saw a more extreme version of this back in 2021-2022, when we saw this clearly feed into import prices and the prices of several goods. So we are quite sensitive to this.”

Labour shortages and port issues worsen delays

Further complicating the picture, European port operations are grappling with labour shortages and maintenance backlogs, which have slowed vessel turnaround and reduced available capacity. Northern European terminals have been particularly affected, according to Xeneta.

Many UK businesses are tied into longer-term shipping contracts. The recent spikes are likely to have a lasting impact on economic performance in the coming months. That is proving a growing concern for companies already facing higher wage bills and employment taxes. Almost 40% of UK firms with ten or more employees expressed concern over supply chain disruptions. That’s up five percentage points from March, according to the Office for National Statistics.

Temporary blip or structural challenge

Some analysts suggest that the latest surge may be temporary. They say it represents a reaction to sudden shifts in Washington’s trade policy. If Chinese exporters lose market share in the US, they may cut prices to remain competitive elsewhere. That would include the UK, which is particularly sensitive to global market shifts due to its heavily import-led physical trade balance. Lower import costs could act as a disinflationary lever in the longer term.

For now, UK supply chains are again feeling an economic squeeze. Distant political decisions are creating real costs at home. These are being felt most immediately by shippers. The container price spike is the most visible indicator of that. “This could prove to be just a short-lived side effect of shifting US trade policies,” noted Bloomberg’s recent market analysis. “But the consequences may linger well beyond the next shipment cycle.”