Maersk Q1 Beats as 145% Tariffs Cut China-US Trade 30-40%, Port Volumes Drop, Consumer Prices Jump

Shipping giant Maersk reported first-quarter 2025 earnings above expectations, with revenue of $13.32 billion, EBITDA of $2.71 billion, and EBIT of $1.3 billion, reflecting 7.8% revenue growth. The company maintained its full-year 2025 EBITDA guidance of $6 billion to $9 billion and EBIT guidance of $0 to $3 billion. Despite strong financial results, Maersk revised its outlook for global container trade volume growth in 2025 to a range of -1% to +4%, down from its previous estimate of around +4%. The revision comes amid escalating trade tensions between the United States and China, including the imposition of a 145% tariff on Chinese goods by the U.S. in April. Maersk's first-quarter 2024 EBITDA was $1.59 billion, and EBIT was $177 million. Maersk CEO Vincent Clerc stated that container volumes between China and the U.S. fell by 30% to 40% in April, as customers rapidly canceled or postponed orders in response to the tariffs. The slowdown in transpacific trade has led to reduced port traffic at key U.S. gateways such as Los Angeles and Long Beach, where cargo volumes from Asia have dropped by 35% and 30%, respectively. Red Sea disruptions are also expected to continue throughout 2025. The decline in container traffic has resulted in fewer ships, containers, and trucking jobs at U.S. ports. Maersk and other shipping firms have suspended at least six weekly routes between China and the U.S. due to collapsing trade volumes. The impact of tariffs extends beyond the shipping sector, as American consumers and businesses face higher prices for goods such as strollers, car seats, toys, and wheelchairs. UPPAbaby car seats now cost $150 more, and the Vista stroller is up $300. HiveTech container boxes increased from $17,800 to over $30,000. Alter Ego Comics reported a profit drop from 30% to 16%. Kidsy, a resale platform, saw a 70% spike in traffic as families seek lower-cost baby products. Economists estimate that the tariffs could cost U.S. families an additional $4,000 to $5,000 per year. Companies including Procter & Gamble, Hasbro, Stanley Black & Decker, and Adidas have announced price increases. President Donald Trump has defended the slowdown in U.S. port activity as beneficial, stating that it means the U.S. is 'losing less money.' Lawmakers have introduced the Truth in Tariffs Act, which would require retailers to disclose the added cost of tariffs to consumers. There are ongoing discussions about possible exemptions for essential products such as baby goods, and Trump has suggested the China tariff could be reduced to 80%. A $5,000 'baby bonus' proposal has also been floated. In addition to the 145% tariff on Chinese goods, a 10% baseline tariff applies to all U.S. imports, and tariffs on steel, aluminum, and auto parts have also been implemented. Tariffs on other countries are currently paused for 90 days.