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Drewry's World Container Index drops 9% for second week

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Shangai-US West Coast shipping rates dive to $2,500 from

$6,000

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US Fed Chief Powell sees tariff inflation starting this

summer

By Lisa Baertlein

LOS ANGELES, June 26(Reuters) -

Rates for shipping cargo containers from China to the U.S.

have dropped by more than half since earlier this month, as

imports rebounded less than expected after the slump that

followed President Donald Trump slapping 145% tariffs on China.

Trump quickly reversed course by lowering the rate to

30%. That cost increase on goods from the nation's No. 1 ocean

trading partner remains significant, especially at a time when

U.S. economic data is signaling weakness.

Rates on the closely watched Shanghai-to-U.S. West Coast

route appear to have found a near-term floor at around $2,500

per 40-foot container, after peaking early this month at around

$6,000, Jefferies shipping analyst Omar Nokta said in a note on

Thursday.

Shipping rates had surged to their recent peaks after Trump

cut tariffs on China to 30% from 145%. That led U.S. importers

to rush in new orders on goods they had halted because of the

astronomical levy.

The retreat in shipping rates "is a sign that the recent

surge in imports to the U.S. ... will fail to have the lasting

impact we had initially expected," maritime consultancy Drewry

said on Thursday.

Drewry's World Container Index fell 9% for the second

consecutive week following five weeks of gains.

U.S. consumers have yet to feel the full effects of tariffs

because many importers stockpiled goods ahead of the new duties

- delaying price hikes.

Now, time is running out. Walmart ( WMT ), the world's largest

retailer and top ocean importer, warned it would start raising

prices in late May and June.

Federal Reserve Chair Jerome Powell on Wednesday said he

expects tariffs to start stoking inflation this summer.

Tariffs have already risen on some goods, but there is a

coming July 9 deadline for higher levies on a broad set of

countries. No one is certain whether Trump will back down to a

10% baseline tariff that analysts are using as a minimum, or

whether he will impose something more aggressive.

Some maritime experts say Trump has painted the U.S. into a

corner with his trade war.

Import shipments to the U.S. virtually ceased in April,

due to Trump's short-lived 145% tariffs on China. That volume is

rebounding. But the bounce may be less than expected as tariffs

begin to weigh on consumer spending and economic growth.

"The more volume goes down, the less economic activity goes

up. The less volume goes down, the more inflation goes up," said

John McCown, senior fellow at the Center for Maritime Strategy.

"There is actually no comfortable place to land."