US supply-chain stress eases as front-loading pressures fade

A pop in shipments arriving at West Coast ports ahead of the August tariff deadline and the start of peak shipping season caused increased congestion, but that’s already reversing.

• Trade continues to be diverted away from China and toward other countries in Asia. Even if the US-China trade truce becomes permanent, goods from China will still face a higher tariff rate, and US officials plan to crack down on transshipments, but that will be difficult to implement.
• Supply-chain stress is unlikely to become inflationary. Freight rates will remain stable as oil prices stay low, thanks to weaker global GDP growth and increased oil production, but the rundown of business inventories will encourage a pass-through of tariffs onto consumer prices.