Trump's Trade Policies Deepen Uncertainty in Global Ocean Shipping

LONG BEACH, California, March 3 (Reuters) – The global ocean shipping industry, responsible for moving 80% of world trade, is sailing through turbulent waters as U.S. President Donald Trump escalates trade and geopolitical tensions with both long-standing adversaries and key allies. The volatile landscape is casting a shadow over international commerce, supply chains, and container shipping firms that have traditionally wielded strong pricing power.

These pressing concerns take center stage at this week’s S&P Global TPM container shipping and supply chain conference in Long Beach, California. The annual event, which serves as a key barometer for the state of the industry, marks the beginning of container shipping contract negotiations. Industry giants such as Mediterranean Shipping Company (MSC), Maersk (MAERSKb.CO), and Hapag-Lloyd (HLAG.DE) are attending alongside major clients, including Walmart (WMT.N), as well as logistics powerhouses DSV (DSV.CO) and DHL (DHLn.DE).

Protectionism Threatens Trade and Shipping Profitability

The industry is grappling with the fallout from increasing protectionist policies, which threaten to shrink international trade volumes and weaken the negotiating leverage of container ship owners. For years, these companies have enjoyed robust profits and dictated pricing, but with global demand in flux, the balance of power is shifting.

Trump has already imposed an additional 10% tariff on goods from China, the world’s largest exporter. In a more aggressive move, his administration is proposing multi-million-dollar port entry fees for Chinese-built vessels. These measures are part of broader trade policies that include new 25% tariffs set to take effect on Tuesday, targeting imports such as avocados and tequila from Mexico, beef and lumber from Canada, and a 10% duty on Canadian oil. Additionally, the administration has hinted at increased levies on steel and aluminum and proposed 25% tariffs on European Union goods.

“Uncertainty in global trade has never been higher,” said Rolf Habben Jansen, CEO of Hapag-Lloyd, during a press briefing on Monday. “Higher tariffs and additional fees put pressure on the industry and, ultimately, consumers.”

Multiple Disruptions Weigh on Global Supply Chains

The U.S. government’s pivot away from free trade comes at a time when global supply chains are already strained by external pressures, including climate-driven severe weather and geopolitical flashpoints. Shipping routes through the Suez Canal, a key artery for international trade, are being diverted due to ongoing attacks by Iran-backed Houthi militants in support of Palestinians in Gaza. These reroutings add substantial transit time and costs for shipping firms.

Additionally, container imports to the U.S. have surged as businesses rush to front-load inventory ahead of expected tariff hikes. While this has temporarily buoyed demand, trade analysts caution that the market could face a sharp downturn once new tariffs are in place, targeted nations retaliate, and inflation-weary consumers begin to feel the impact of rising costs.

The Drewry World Container Index reported that the spot rate for a 40-foot container stood at $2,629 as of Thursday—far below the pandemic-era peak of $10,377 in September 2021. Rates are now at their lowest levels since May 2024, raising concerns about future profitability for shipping companies.

Read more:

• Trump’s China Trade Crackdown Disrupts Shipping, Drives Up Costs.
• Trump’s New Policy Impact on Global Trade and Shipping

U.S. Proposal to Tax Chinese-Built Ships Raises Alarms

One of the most controversial moves by the U.S. Trade Representative was its February 21 proposal to levy steep fees on Chinese-built ships entering U.S. ports. The measure, strongly backed by U.S. labor unions, is aimed at revitalizing domestic shipbuilding. However, industry insiders warn that it could have far-reaching economic consequences.

Under the proposal, vessels owned by Chinese maritime operators, including the state-controlled COSCO (601866.SS), would face port entry fees of up to $1 million per ship. Other companies operating Chinese-built vessels could be charged as much as $1.5 million. While the policy might benefit Taiwanese and South Korean liner operators, it is expected to have widespread repercussions for global shipping costs and U.S. businesses reliant on affordable imports.

“The economic burden on U.S. exporters and importers will be enormous,” said container shipping expert Lars Jensen in a LinkedIn post. “The actions taken by the U.S. administration over the past four weeks are unprecedented in scope and scale.”

Industry Braces for a Volatile Year

As container shipping firms, logistics providers, and multinational corporations gather in Long Beach, the industry is bracing for an unpredictable year ahead. Rising tariffs, geopolitical instability, and regulatory changes are likely to send shockwaves through global trade. While some carriers may benefit from shifting trade routes and regional realignments, the overall outlook remains fraught with uncertainty.

Analysts at Jefferies noted in a recent report that while geopolitical tensions could drive extreme fluctuations in freight rates, their base forecast predicts a market moderation throughout 2025.

For now, all eyes remain on how global trade players adapt to a rapidly changing environment—one shaped as much by political decisions as by economic fundamentals. The stakes for businesses, consumers, and the shipping industry have never been higher.

Worldcraft Logistics Weighs In

Global logistics providers like Worldcraft Logistics are closely monitoring the evolving trade landscape, assessing how these changes will impact supply chains and long-term strategies. “The uncertainty surrounding trade policies is creating significant challenges for businesses that depend on stable and efficient shipping solutions,” said a spokesperson from Worldcraft Logistics. “While we are working closely with our partners to mitigate disruptions, the long-term implications of these policies could reshape global trade patterns.”

The company emphasized that agility and strategic planning will be crucial in navigating the turbulent waters ahead. “Adapting to these changes requires a combination of robust contingency plans and a proactive approach to sourcing and routing,” the spokesperson added.

With shifting regulatory frameworks and evolving trade agreements, logistics providers are expected to play an increasingly critical role in helping businesses weather the storm. For now, industry players are bracing for further disruptions and hoping for greater clarity in the months to come.

*This article was compiled and edited by Worldcraft Logistics to better suit our readers. Any comments to edit the article to be more suitable, please contact the author via email.