As Donald Trump mentions tariffs, shipping faces huge challenges again
In recent days, Trump strongly supported and defended his aggressive trade protectionist policies at the presidential debate, including the threat of universal tariffs of up to 20% on all imports and additional tariffs of 60% to 100% on countries such as China.
Peter Sand, chief analyst at Xeneta, said: "The rise of trade barriers tends to have a negative effect. "We saw dramatic swings in shipping costs in 2018 when Trump introduced tariffs, and it is history repeating itself that he is proposing something similar."
In his debate with Democratic candidate Harris, Trump said his proposed import tariffs would not lead to higher consumer prices. However, Sand disputes this, noting that "when the market price of sea containers rises, these costs are passed down the supply chain and ultimately paid for by the end consumer." This could be in the form of higher commodity prices or a reduction in the variety of products available."
It is worth noting that Trump's tariff proposal comes at a time when the global seaborne supply chain is under significant pressure due to tensions in the Red Sea region. Thus, from December 1, 2023 to July 1, 2024, spot freight from the Far East to the East Coast of the United States increased by a staggering 303%, while spot freight from the Far East to the West Coast of the United States increased by 389% during this period.
"Shippers prepare for potential supply chain threats by importing as much goods as possible in advance," Sand warns. "The advance loading of imports caused a significant increase in freight rates after the Red Sea conflict, and we can expect shippers to adopt the same strategy in the face of any new tariffs."
For those working in the maritime industry, they know the dangers of uncertainty because it undermines their ability to manage supply chain risk. "Shippers and freight forwarders do not like to live in such an unstable environment because it affects their ability to effectively manage supply chain risks. That is why those who work or operate in the maritime industry are committed to upholding the global free trade system and opposing tariff barriers of any kind."
Peter Sand, chief analyst at Xeneta, said: "The rise of trade barriers tends to have a negative effect. "We saw dramatic swings in shipping costs in 2018 when Trump introduced tariffs, and it is history repeating itself that he is proposing something similar."
In his debate with Democratic candidate Harris, Trump said his proposed import tariffs would not lead to higher consumer prices. However, Sand disputes this, noting that "when the market price of sea containers rises, these costs are passed down the supply chain and ultimately paid for by the end consumer." This could be in the form of higher commodity prices or a reduction in the variety of products available."
It is worth noting that Trump's tariff proposal comes at a time when the global seaborne supply chain is under significant pressure due to tensions in the Red Sea region. Thus, from December 1, 2023 to July 1, 2024, spot freight from the Far East to the East Coast of the United States increased by a staggering 303%, while spot freight from the Far East to the West Coast of the United States increased by 389% during this period.
"Shippers prepare for potential supply chain threats by importing as much goods as possible in advance," Sand warns. "The advance loading of imports caused a significant increase in freight rates after the Red Sea conflict, and we can expect shippers to adopt the same strategy in the face of any new tariffs."
For those working in the maritime industry, they know the dangers of uncertainty because it undermines their ability to manage supply chain risk. "Shippers and freight forwarders do not like to live in such an unstable environment because it affects their ability to effectively manage supply chain risks. That is why those who work or operate in the maritime industry are committed to upholding the global free trade system and opposing tariff barriers of any kind."
