Trump Tariffs : How American Sanctions May Affect The Global Shipping Industry
LONDON : President Donald Trump has already made plenty of headlines since taking up his second term in the White House, including with the announcement of numerous new tariffs on imports.
The 47th United States President issued three executive orders on February 1st 2025, just days after his inauguration, which directed the US to impose an additional 25 per cent ad valorem rate of duty on imports from Canada and Mexico, as well as ten per cent on imports from China.
Leading 20ft shipping container supplier Cleveland Containers has analysed the early reactions to these announcements and how President Trump’s second term as US President could affect the world’s shipping industry, especially when looking back at his first term…
How might President Trump’s second term affect the world’s shipping sector?
Just ahead of President Trump taking office for the second time, J. Bruce Chan, an analyst in the Transportation and Future Mobility sectors at wealth management and investment banking firm Stifel, believed that the shipping industry was prepared for the new tariffs.
However, he also stated to the Morning Star: “President Trump’s Administration promises to usher in a new trade and tariff regime. As such, it’s difficult to assess the ultimate impact to the freight transportation industry.
“Prima facie, we believe tariffs are a drag on freight demand, effectively resulting in higher costs for shippers that are generally passed on to end consumers over time.”
Mr Chan went on to note that those involved in shipping containers across continents should be paying particular attention to the American sanction announcements.
He commented: “Because almost all trans-Pacific trade moves over the ocean, we believe ocean container shipping will see the largest direct impact. But for shippers and retailers, there is no cheaper way to move goods than over the ocean, so there are few modal alternatives if production remains in Asia.
“We see the most risk for maritime shipping, with containers and dry bulk being more acute, with more insulation for oil and gas tankers.”
As President Trump has just become his second term as US president and the American sanctions have only just been announced, it will take time to see what the true impact will be. However, various sources have looked back on President Trump’s first term to get an idea of what could be expected.
For example, shipping news and intelligence service Lloyd’s List pointed out that tariffs introduced when President Trump was last in the White House had a noticeable effect on both spot container freight rates and import timing. Cargoes were pulled forward in the second half of 2018 by importers as they looked to beat tariff deadlines, which resulted in higher spot rates temporarily before affecting rates in 2019 because of inventory overhang. Could repeat results be seen across 2025 and 2026?
Jason Miller, a freight economist and professor of supply chain management at Michigan State University, certainly seemed to think so. Speaking to Lloyd’s List before President Trump’s 2024 presidential victory when the tariffs were only part of campaign proposals at that point, he said: “We will see front-loading like we have never seen before in 2025. There would be a massive pull-forward of demand as everybody rushes to bring in long-life inputs and goods from tariff countries, especially China.”
Meanwhile, international shipping and forwarding agents Supreme Freight Services reported that increased tariffs may cause disruption to shipping volumes and global supply chains, if trade policies introduced by President Trump during his first term is anything to go by. Shipping demand and routes could be affected due to trade uncertainty too, though the publication also acknowledged that increased investment in ports and inland waterways across the US could improve efficiency for domestic and international trade alike.
Cleveland Containers has looked to reassure its customers that any disruption caused by the new American sanctions will be minimised at the firm. Hayley Hedley, the company’s Commercial Director, stated: “Recent history certainly suggests that the new tariffs being introduced by President Trump will have various knock-on effects across the shipping industry.
“Fortunately, Cleveland Containers has a continuous supply of shipping containers entering the UK. We work with several agents to ship from various locations, as well as having good stock on the ground, so are confident in our ability to provide for our customers.”
Source :
Cleveland Containers, UK