Featured Headlines:

Trump and Xi ante up $30 billion apiece, but importers are still waiting to see all the cards.

• Welcome to the World Series of Trade Poker
  • President Trump and President Xi have put roughly $30 billion of goods from each country on the table for potential preferential tariff treatment. Based on 2024 trade, the $60 billion pot represents more than 10% of U.S.-China goods trade.
  • And yes, Tiexi is Shenyang’s historic heavy-industrial district. We would like everyone to believe we knew that before making the Texas Hold ’Em joke!
• Trump Looks at His Cards
  • The U.S. list covers 77 products, largely consumer goods: toys, small appliances, holiday decorations, child car seats and other non-sensitive Chinese exports.
  • Picture Trump pushing toasters, toys and Christmas lights into the middle. Somewhere, a Customs broker is desperately asking: Fine, but what exactly happens to the duties?
• Xi Sees His Toasters and Raises Him Wheat
  • China’s proposed hand is dramatically broader: 1,619 products covering agriculture, fish and seafood, logs and wood products, cosmetics, medical devices and more.
  • China also committed to import at least 10 million metric tons of U.S. coal in 2027 and another 10 million in 2028. Apparently, Xi had a few (cough, cough) black chips behind his wheat.
• Trump Announces His Hand
  • After meeting Xi, President Trump declared, with profoundly sharp specificity, that “a lot of very positive things happened” and called them “great things for both countries.”
• And Here Is Where Importers Stop Laughing
  • The product lists are real. The tariff treatment is not yet. The framework still leaves each country to determine and implement any reductions through its own domestic legal process.
  • And that is one hell of an important river card. We still need the actual duty treatment, effective dates, exclusions and interaction with existing tariffs and other trade remedies before importers can reliably calculate the savings.
  • Translation: the cards are on the table, but don’t spend the pot. Until CBP publishes the implementing details, importers should not assume these products are already receiving reduced duties.

• Washington and Beijing keep making news and have extended their broader trade truce until Jan. 10. Lovely. Unfortunately, somebody forgot to change the alarm clock.
• USTR’s Section 301 fees targeting Chinese vessel operators and Chinese-built ships remain scheduled to wake up Nov. 10, two full months before the broader truce expires.
• As of this writing, USTR has issued no extension. Apparently, America has two alarm clocks, and we only hit snooze on one of them.
• And these are not bedside-radio numbers. Consider a 10,000-TEU containership. A real COSCO vessel that size has about 55,000 net tons, which would put a Chinese operator such as COSCO or OOCL on the hook for roughly $4.4 million per US voyage if the fees return Nov. 10. That’s a liability of $440/TEU; gee, who’s gonna pay that?!
• A non-Chinese carrier sailing a Chinese-built ship faces a different formula, potentially about $1.5 million if that vessel discharges 10,000 containers here. Gee, who’s gonna pay that that?!
• Same ship size. Very different alarm clock.
• The fees were suspended for exactly one year, from Nov. 10, 2025 through Nov. 9, 2026. Unless Washington extends that suspension, Nov. 10 remains circled in red, apparently in permanent marker.
• A broad coalition of importers, exporters, retailers, manufacturers, agricultural interests, rabbis, nuns, and transportation groups has asked USTR to keep the fees asleep. Their argument is fairly practical: America absolutely needs more domestic shipbuilding, but charging more for ships that were built years ago does not cause an American shipyard to cough up an AFFORDABLE containership by Tuesday.
• USTR sees the fees as one piece of a much larger effort to counter China’s maritime dominance and rebuild U.S. shipbuilding. Industry groups argue that accomplishing that will require sustained investment, policy leadership and public-private cooperation, rather than simply adding another transportation cost to today’s fleet.
• Come on, who are we blanking kidding? Another transportation cost to shippers already facing high tariffs, fuel increases, powerfully absurd ocean freight rates, inflation, and the very real specter of potentially unfathomable new CBP enforcement. Hooray!
• So, Ground Control has a fairly simple question:
  • Can you hear me, Uncle Sam?
  • Can you hear me, Uncle Sam?
  • Your Nov 10 alarm is still on!

Panama was forty-seven-five,
Now deeper vessels can arrive.
Then Panama was forty-eight,
Now forty-nine. Please keep it straight.

Thirty-two slots became thirty-three,
More ships can sail from sea to sea.
The lake got wetter, ships got deep.
Canal gods awoke from deep sleep.

Take me back to forty-seven-five!
No, that number didn’t survive.
That was several drafts ago.
Try to keep up. Go with the flow.

Why’d they change the draft once more?
Rain fell down. The lake rose four.
That’s nobody’s business but the Turks.
Wait. Wrong song. But damn, it works.

Draft goes down, the surcharge rises.
Draft goes up? Well, no surprises.
More rain falls, more vessels fit.
The carriers don’t refund shi_!

Drought brings fees and ships that wait.
Rain brings water, depth and freight.
Slots come back and vessels fly.
Funny, though, the fees don’t die.

Forty-eight became forty-nine,
More hull below the waterline.
Your vessel missed its transit time.
Your surcharge made it through just fine.

So deeper ships may now proceed,
More water gives them what they need.
But rain or drought, come what may,
Oh, don’t be silly. Pay anyway!

• Is your patented pharmaceutical suffering from a 100% Section 232 tariff? Ask the Bureau of Industry and Security (BIS) if zero percent is right for you.
• The tariff took effect July 31 for certain named companies and expanded to most other covered patented pharmaceuticals and ingredients on September 29. Generic pharmaceuticals and associated ingredients are not currently subject.
• The newly published BIS guidance provides a possible prescription for relief. Certain orphan drugs, nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies, antibody-drug conjugates, emergency medical countermeasures and animal-health products may qualify for a zero percent rate.
• Please note: merely possessing one of these products does not mean you should begin claiming zero percent immediately.
• The product must originate in an eligible jurisdiction identified by BIS or receive approval based on an urgent U.S. health need. Companies pursuing the second pathway must submit a separate request for each product and explain why available alternatives cannot adequately meet patient demand.
• Commerce will review requests individually with the Office of the U.S. Trade Representative (USTR) and Department of Health and Human Services (HHS). Approved information will then move to U.S. Customs and Border Protection (CBP), which will administer the adjustment at entry and may request supporting records.
• BIS also created a zero-duty provision for covered products used solely in clinical trials, research and development or other noncommercial applications. It also clarified that unpatented animal-health products are treated as generics.
• Importers should confirm the product category, patent status, origin, classification and applicable Chapter 99 treatment before claiming the adjustment. Do not discontinue your compliance review merely because the merchandise sounds medically important.
• Ask BIS whether zero percent is right for you. Side effects of assuming may include a 100% duty bill.

• CBP has released its quarterly interest-rate notice, and we regret to report that the document is already accruing confusion.
• The summary says the rates will “remain the same” for the quarter beginning October 1. Several paragraphs later, the notice says they “will increase from the previous quarter.” Nothing stimulates interest quite like two opposite conclusions in one Federal Register notice.
• Fortunately, the numbers are considerably less indecisive.
• From October 1 through December 31, interest on customs-duty underpayments remains 7% for corporations and non-corporations. Overpayments earn 7% for non-corporations and 6% for corporations.
• Those are the same rates that applied during the previous quarter. The “will increase” language appears to have survived from the July notice, when the rates actually did increase. Copy, paste and accrue.
• The rates are based on the federal short-term rate, with three percentage points added for underpayments and non-corporate overpayments. Corporate overpayments receive only two additional points because apparently even refunds have a corporate discount program.
• For importers, the practical lesson is unchanged along with the rates: money owed to CBP continues accumulating at 7%, while qualifying refunds may accrue interest at 6% or 7%, depending on who is waiting to be paid.
• Additional details are available in the Federal Register notice: 2026-19292 (91 FR 60141)
• The rates did not move. The wording wandered a little.

• While ocean freight has spent the summer demanding everybody’s attention, air cargo has quietly been getting more expensive. Global airfreight tonnage is up 8% year over year, while capacity has grown just 4%. Spot rates? Up 33%. Apparently, the quiet child has discovered pricing power.
• Worldwide spot rates averaged $3.45/kg in mid-September, while the broader mix of contract and spot pricing was 24% higher than a year ago. In other words, demand is growing nicely, capacity is growing half as quickly, and rates have decided to ignore both parents and pursue their own dreams.
• North America provided the post-Labor Day fireworks, with tonnage jumping 14% in a single week. Some of that was simply cargo returning from the holiday dip, but global chargeable weight has now increased for four consecutive weeks. When does a rebound stop being a rebound and start scoring surge points?
• The real action, however, is over the Pacific. Asia-to-U.S. airfreight demand is running 13% above last year, including South Korea up a ridiculous 54%, Japan up 47%, and Indonesia up 19%. Semiconductors and other high-tech cargo are helping drive the Korean and Japanese surge.
• Asia-Pacific-to-U.S. spot rates are averaging $6.75/kg, roughly 40% higher than last year. Japan-U.S. rates are up 50%, while Singapore-US is up 62%. At $6.75/kg, your freight is not flying coach. It has status and sips a top-shelf martini.
• Supply is the story worth watching. Worldwide international capacity is up only 4% year over year, while available Gulf lift remains nearly 17% below where it stood before the U.S.-Iran conflict. Europe has added considerable capacity, but airplanes remain annoyingly incapable of being simultaneously located in Frankfurt, Dubai and Seoul.
• And here comes October. China’s Mid-Autumn Festival ran directly into Golden Week, squeezing production and export handoffs into a narrow window. Ocean freight that misses its intended sailing can also become tomorrow’s “OH SHIP, AIRFREIGHT IT” shipment, joining high-value cargo and urgent inventory in the competition for uplift.
• There is some good news. Additional charter capacity has been absorbing enough of the pressure to keep recent transpacific rates relatively stable week to week, and e-commerce demand has been comparatively soft. So, this is not an airfreight crisis. Please return your oxygen masks to their original compartments.
• The Air Apparent has arrived. Unfortunately, he would like almost $7 a kilo.

• Somewhere between Shanghai and Ningbo, Waze has simply stopped giving directions. In her place is Wazanda, Waze’s drunken alter ego, made unstable by 150-mph winds and several Typhoon Tequilas. ’Zanda says, “You know what, dear? You better drive.”
• Hard to blame her. A summer parade of monster storms has turned Asia’s biggest ports into something between the DC Beltway at rush hour and a demolition derby with 1,300-foot vehicles. Global schedule reliability plunged 12.7 points in two months, its lowest ebb since ’22.
• August schedule reliability was just 3% across Asia and 23.9% in China. Shanghai and Ningbo lurched to a combined 13.5% while late vessels across Asia averaged more than a week behind schedule.
• Shanghai and Ningbo have seen vessel delays approaching nine days. Shanghai’s arrival-to-berth wait improved considerably by late September, but the pileup has hardly disappeared. After nine days, your container should register to vote.
• Nor is this merely a Shanghai-Ningbo fender bender. All 14 of Asia’s busiest container ports saw on-time performance deteriorate in July, including Yantian, Hong Kong, Singapore, Busan and Port Klang. Apparently, this accident had witnesses.
• The bigger number may be 3 million TEU. That is how much vessel capacity congestion has effectively swallowed, equal to 8.5% of the global fleet. Assemble those stranded ships into one imaginary carrier and it would be roughly the fifth-largest container line on Earth. We shall call it Stillwater Shipping (or perhaps Hapag Lloyd?).
• And 8.5% is nearly four times the pre-pandemic norm of 2.2%. Capacity trapped in congestion has jumped more than 75% since mid-August. The pandemic record of 13.8% remains comfortably ahead, although Asia appears to be making nearly record time toward standing still.
• Storm season should finally begin easing in October. Unfortunately, analysts expect only a partial cleanup before cargo starts building again ahead of Lunar New Year. Thus, the current traffic jam may not actually end. It may simply meet the next traffic jam, exchange insurance information and wait for the cops.
• Our importer finally asks Wazanda for help again:
  • Importer: Where the hell is my container?
  • Wazanda: Shanghai-ish.
  • Importer: When does it depart?
  • Wazanda: In 600 feet, merge onto Hapag-Lloyd.
  • Importer: ’Zanda…!
  • Wazanda: Shhh, dear. Tequila talking.
  • Importer: Recalculating WHAT?
  • Wazanda: Your expectations. Make a U-turn at the Pacific Ocean.

• We begin with an apology. ShapTalk featured diesel fuel prominently in our last issue, and here we are again. At $6.53/gallon, however, diesel refuses to respect editorial boundaries. Our attorneys are preparing the restraining order.
• The national average jumped another 24 cents in a week and now sits $2.78 above last year. And the pain does not immediately disappear into published truck rates. DAT estimates that spot pricing typically takes three to four weeks to catch up with a sudden fuel spike. Today’s pump price may therefore be “pumping” tomorrow’s freight bill.
• Which brings us to one of transportation’s oldest feuds: truck versus rail. Intermodal has spent decades promising shippers lower costs in exchange for a little patience. With diesel behaving like a stalker, that sales pitch should be getting considerably easier.
• The numbers suggest somebody is listening. Total intermodal volume is up 2.9% through July, but the headline hides a fascinating split: domestic intermodal is up 7.9%, while international volume is down 2.9%. Rail is gaining ground right where it competes most directly with long-haul trucking.
• But before we hand rail the house keys, intermodal still has some explaining to do. An international container frequently needs to be transloaded into domestic equipment, drayed to the rail ramp, moved hundreds or thousands of miles by train, then drayed again to the final warehouse. Every handoff adds time, money and another opportunity for someone to ask where the hell the freight is.
• That makes the sales conversation wonderfully awkward:
  • RAIL: I’m cheaper!
  • TRUCK: You’re slower!
  • RAIL: Diesel is $8.50 in California.
  • TRUCK: You need two drays and a transload.
  • RAIL: I’m environmentally friendlier.
  • TRUCK: I’m coast-to-coast in four days!
  • RAIL: I can do eleven!
  • TRUCK: Eleven what?
  • RAIL: Days.
  • TRUCK: Bahahahahaha!
• Sometimes the savings simply aren’t enough to compensate for the inconveniences. Intermodal can shine on long, predictable lanes with flexible delivery windows, but the shipper still has to weigh transportation savings against additional handling, inventory time and a considerably longer transit. Cheap needs to be cheap enough.
• Meanwhile, Washington has begun discussing restrictions on U.S. diesel exports as one possible response to soaring domestic prices. No ban has been announced, and administration officials have publicly differed over the concept. That distinction matters because the U.S. exports roughly 1.5 million barrels per day of distillates, with buyers in Europe and Latin America increasingly dependent on American supply.
• Restrict those exports and perhaps more diesel remains at home. But refineries, foreign allies and global fuel markets are inconveniently connected things, so even some administration officials have cautioned that a blanket ban could create unintended consequences. Hello, Russia, you little darling!
• For shippers, the immediate decision is less ideological and considerably more boring: compare the modes again. At $6.53 diesel, lanes that made little sense for intermodal six months ago deserve another look. Just remember that saving money on transportation is considerably less impressive when your inventory arrives two Thursdays from now.
  • DIESEL: Did somebody say my name?
  • SHAPIRO: Sir, you are legally prohibited from coming within 500 yards of this newsletter. Police!!