29.04.25 - 60% reduced cargo shipments

Cargo shipments from China to the US have plummeted dramatically since the Trump administration raised tariffs to 145% in early April. Americans have not yet felt the full impact of this sharp reduction in goods from one of the country’s largest trading partners.

Markets: During recent days, major equity indices are about to recover from recent sell-off, US 10-year yield dropped to almost 4.2%, gold price is again above USD 3’300, Cryptos slightly gave up some of the recent gains together with the US dollar.

My view: 60% slump in shipping. Reading such a headline and seeing this number, some red lights start flashing.
Indications from the supply chain and freight markets should be taken seriously. They often signal shifts in the global economy long before financial markets react.

I bet very few of today’s financial influencers have truly experienced a situation like this firsthand, a drastic supply chain shock. I can still picture it vividly from 2008.
At the time, I had the opportunity to work in Singapore on a short-term development assignment for one of the major Swiss banks. It was late 2008, right in the middle of the financial crisis, shortly after the collapse of Lehman Brothers.

Living and working in Singapore, I initially observed huge freight ships, fully loaded with containers, steadily heading toward Europe. But by December, the scene had changed dramatically: Singapore was suddenly empty of many expats, and only a handful of container ships remained, most of them looking eerily empty.
Having never experienced such an economic shock in real life before, nevertheless, I remained somewhat optimistic about the global economy and financial markets back then.
Looking back now, I understand the true significance of container ships no longer sailing, or doing so half-empty.

Today, financial markets are not properly pricing in such a scenario, even though the data clearly indicates it could be happening again. That is why I simply cannot share the current wave of optimism or the prevailing “risk-on” attitude in today’s trading environment.

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