The Escalating Trade War: China’s Retaliatory Tariffs and Trump’s Steel and Aluminium Imports Levy

As tensions rise between the United States and China, the global shipping and supply chain sector braces for impact. China’s retaliatory tariffs on some American goods have come into effect, prompting American President Donald Trump to announce a 25% tariff on all steel and aluminium imports into the US, with a full announcement expected imminently.

“Any steel entering the United States will face a 25% tariff,” declared Trump, underscoring the escalating trade war between the two economic powerhouses.

In the past few weeks, President Trump has made several tariff announcements, many of which have been rescinded or postponed shortly after. This uncertainty has left the shipping industry wary of sudden changes in supply chains and sourcing patterns.

Lars Jensen, from Vespucci Maritime, cautioned, “Statements related to tariffs and executive orders are subject to rapid changes and postponements, making it challenging to assess the impact on shipping and trade.”

Hartland Shipping echoed this sentiment, describing the situation as “traffic light nature: green, amber, red, repeat, broken,” highlighting the volatile nature of the trade war’s implications.

China’s latest tariffs on US goods encompass a 15% border tax on imports of US coal and liquefied natural gas products, as well as a 10% tariff on American crude oil, agricultural machinery, and large-engine cars. These actions are retaliatory measures in response to the blanket 10% tariff imposed by Trump on all Chinese imports.

Challenging the US import taxes at the World Trade Organization (WTO), China labeled them as “discriminatory and protectionist,” claiming they violate trade rules and disrupt fair competition.

Despite the escalating tensions, the trade war has yet to significantly impact global seaborne volumes. Clarksons Research reported that the US tariffs on China affect 67 million tonnes per annum of trade, while China’s response impacts an additional 23 million tonnes per annum, amounting to approximately 0.7% of global seaborne trade in tonnes and 1.4% in tonne-miles.

Clarksons noted, “Direct impacts on bulkers (coal), tankers (crude), and LNG are limited, with less than 1% of global trade ‘tariffed’ for each commodity.”

As the trade war escalates, the global shipping industry remains vigilant, navigating the uncertain waters of shifting trade policies and tariffs between the world’s two largest economies.