The Impact of US Trade Tariffs on Global Seaborne Trade

Despite their high profile, US trade tariffs – and retaliatory actions – are to date impacting directly only 1.5% of global seaborne trade volumes, according to the latest data from Clarksons Research. The previous 2018-19 trade war saw tonne-miles cut by only 0.5%, indicating a relatively minor impact on the overall trade landscape.

With US policy described as “fluid” by experts at the world’s largest shipbroker, there is potential for escalation, deepening indirect impacts, but also for new trade agreements and trading patterns to evolve in response to the changing landscape.

This week, the office of the United States Trade Representative will hold a public hearing regarding proposed actions in the Section 301 investigation on China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance. The remedies being considered include potential port service fees for Chinese-built vessels arriving in US ports and requirements for exporters to ship a percentage of their cargo on US-owned, operated, and eventually built vessels.

Judah Levine, head of research at Freightos, acknowledges the uncertainty surrounding the tariff landscape, with potential sharp tariff increases on China, reciprocal tariffs on multiple countries, and proposed port fees on Chinese-made vessels. Additionally, the reinstatement of 25% tariffs on all Canadian and Mexican imports is looming, adding to the complexity of the trade environment.

Peter Sand, chief analyst at Xeneta, emphasizes the need for shippers to navigate the uncertain trade policy landscape effectively during freight rate negotiations. Given the potential changes in tariffs and proposed port fees, shippers will be keen to lower their overall import costs and adapt to the evolving trade dynamics.