US midterm shift adds trade uncertainty as trans-Pacific ocean freight rates stay elevated

The recent Democratic majority in both U.S. legislative branches has injected new uncertainty into trade and logistics, as import volumes slow after an unusually busy peak season. The shift leaves the Trump administration balancing competing demands, according to market data provider Freightos. Voter concerns about affordability may prompt curbing tariffs and easing energy prices, including potential de-escalation of the Iran conflict.

Conversely, a more challenging legislative landscape could push the president toward trade and foreign policy intervention. Once in office, the new Democratic-controlled Congress will have expanded oversight and appropriations powers, which could complicate negotiations with China, even if the president retains unilateral authority.

For now, U.S.-China maritime policy continues on a path of de-escalation. A reciprocal port fee suspension set to expire on January 10, 2027, provides temporary relief for shipping lines and cargo owners. This extension is part of a wider trade truce rollover, offering further room for negotiations ahead of a scheduled meeting between Donald Trump and Xi Jinping later this month.

Whether such discussions yield a longer-term agreement remains uncertain, particularly as technology, security, and shipbuilding policies intersect with trade matters. The policy uncertainty follows a prolonged U.S. ocean import season that gained momentum in May and persisted through the summer. In September, U.S. ports handled 2.37 million twenty-foot equivalent units (TEUs) of loaded imports, a 3.4% increase from August and a 12.6% year-over-year surge, marking September as the third-busiest month on record.

The National Retail Federation attributes the extended import surge to heightened tariff pressures in the second quarter, which encouraged early shipments by importers, and resilient consumer spending despite inflation. The organization forecasts October imports at 2.26 million TEUs, roughly 5% below September levels, and November at 2.05 million TEUs, about 14% lower than the peak.

The full-year forecast anticipates imports at 26 million TEUs, a 2% increase from 2025. Trans-Pacific ocean freight rates experienced a slight drop this week as carriers' planned rate hikes did not materialize. However, rates still hover near peak-season levels, at $8,200 per 40-foot equivalent unit (FEU) to the U.S. West Coast and $9,700 to the East Coast.

The West Coast labor situation remains problematic, as cargo at some ports experiences extended dwell times due to intermodal rail delays. The International Longshore and Warehouse Union Local 26, representing watchmen at several Los Angeles and Long Beach container terminals, recently agreed to a contract extension until November 20, while ongoing talks with employers of the Pacific Maritime Association persist.

A strike could exacerbate disruption risks at a time when importers are still managing peak-season cargo. On Asia-Europe routes, rate increases have not gained traction, with North Europe prices falling by 5% last week to $3,400 per FEU, and Mediterranean rates declining by 1% to $4,300. Despite these decreases, rates remain 50% and 88% higher than the previous year, respectively.

The election adds uncertainty to trade policy as importers navigate high freight costs and a shipping season that has slowed but remains strong.