Nomura predicts that China’s exports to the U.S. will begin to recover by June. This change is due to an increase in container bookings and freight rates, signaling a rebound after recent trade disruptions. The logistics system, affected by near-embargo conditions, may take weeks to stabilize, leading to a gradual but stronger rise in exports. However, there are still risks ahead. Concerns remain about a potential decline in exports once the current 90-day tariff suspension ends in mid-August. Despite the expected short-term gains, Nomura is cautious about future growth. They predict that export growth will slow to around 0% in 2025, down from 5.8% last year, which could impact GDP.

Export Recovery Timeline

Nomura expects a temporary increase in exports from China to the United States by June. This projection is based on early signs of rising container bookings and shipping fees, indicating a return to demand after months of trade disruptions that felt similar to an embargo. While the system is beginning to heal, it remains fragile. The effects may not be immediate, requiring some time before full recovery is visible, which means the rise in exports might be more significant once the logistics stabilize. Nonetheless, there is a cautionary note. The current ease in tariffs is only temporary, as the 90-day suspension will expire in mid-August. This means any improvements now may be short-lived, with the same challenges that hindered exports earlier this year likely returning, possibly lowering trade volumes later this year. Nomura’s forecast of stagnant export growth next year—projected to be flat at 0% after nearly 6% growth the previous year—shows concerns beyond tariffs. Decreased external demand, possibly due to excess inventory or tighter monetary policies in other countries, could combine with ongoing trade issues to strain manufacturers and exporters. If these predictions hold true, the broader economy, including GDP, could be affected as foreign markets provide less support than before.

Market Dynamics and Timing

Currently, the data suggests a brief opportunity in the upcoming weeks when trade flows are continuing smoothly, supported by favorable shipping conditions. For market participants whose strategies depend on cross-border goods or shipping costs, this timeframe could lead to pricing discrepancies in related assets. It’s essential to keep a close eye on freight indices, especially on routes between the U.S. and Asia, as these often signal changes during transitions. Weekly shipping volumes, port traffic, and customs data are crucial indicators—not just general statistics but timely signals in this condensed period leading up to the tariff deadline. Additionally, monitoring regulatory updates from both trading partners may help with timing decisions as the tariff deadline approaches. Watanabe’s team indicates that pressure may persist into 2025, meaning that options for later dates could begin to reflect this cooling trend. Consequently, volatility in the market may remain stable in the short term but could rise in the later quarters as potential policy risks come into focus. This variance is something to watch for when considering hedging effectiveness. Trade outcomes aren’t always straightforward—experience shows that models don’t always conform neatly. However, positioning should focus on this mid-year trend, with heightened vigilance following any updates about extending or reversing the tariff relief. Dry tonnage rates could also provide early clues about demand trends after summer. Given these factors, the timing of trade entries and rollovers will be particularly important in the coming months. Create your live VT Markets account and start trading now.

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