Chinese Shipping Earnings Face ‘Harder-Than-Expected’ Tariff Hit as Recession Risks Rise

(Bloomberg) —

Chinese shippers may see an outsized hit on earnings as the latest tariffs from US President Donald Trump risk hammering global trade.

Container liners such as Cosco Shipping Holdings Co. that focus primarily on Chinese exports will probably see a disproportionate impact, according to Bloomberg Intelligence analyst Kenneth Loh. “Chinese exports are set to be hit not just harder than other countries’, but even harder than most had expected.”

The US imposed an additional 34% tariff on almost all Chinese products last week — a move China returned swiftly — affecting most of the half-trillion dollars worth of goods Chinese firms exported to the US in 2024. 

In his latest salvo, Trump further upped the ante by threatening an additional tariff of 50% on Chinese goods, adding that talks with China will be terminated unless it withdraws its retaliatory levies. 

The tit-for-tat measures are prompting concern transpacific volumes and shipping rates could fall. “We see downside to earnings as President Trump pushes ahead in attempt to reduce US trade deficits,” Citigroup Inc. analysts including Amy Han wrote in a note. 

The latest measures — excluding the vowed but not yet imposed 50% — bring average US tariffs on all Chinese products to as high as 65%, according to economists. That factors in existing tariffs from Trump’s first term that were maintained by the Biden administration.

The Trump administration will also end the so-called “de minimis” tariff exemptions on May 2, which currently allow packages from China and Hong Kong worth $800 or less to enter the US duty free. Airlines too, including Cathay Pacific Airways Ltd. and Taiwan’s China Airlines Ltd., face increased risks given their higher exposure to e-commerce cargo revenue.

Adding to the disruption is Trump’s desire to punish Chinese-built ships, seeking a levy of at least $1 million each time a Chinese-operated or Chinese-built ship enters a US port, saying China’s dominance in ship construction was achieved unfairly and harms American interests.

Cosco Shipping signaled it’s getting prepared, Citi analysts including Kaseedit Choonnawat wrote after the group’s earnings call last month, adding that details are limited. The Shanghai-based company also warned of changes in global cargo flow patterns as policies related to tariffs could impact geopolitical issues. Its shares are down 22% so far this year.

Warning signs

Peers Orient Overseas International Ltd. and China Merchants Port Holdings Co. also warned of trade uncertainties amid intensifying geopolitical tensions during their 2024 results, even as profits grew from the year before. Elsewhere in the industry, Danish shipping giant A.P. Moller-Maersk A/S said tariffs aren’t “good news for global economy, stability and trade.”

Right now, shipping companies are starting to look more seriously into ways to better navigate the rapidly evolving landscape of trade protectionism under Trump, according to BI’s Loh. 

“There’s talk of exporters assessing options that might attract lower levies relating to their shipments,” Loh said. “We are also hearing that shipping companies are showing interest in pivoting toward non-Chinese shipyards when planning new ship orders.” 

China, meanwhile, is mulling front-loading stimulus, which may include subsidies for some exports and potentially alleviate some of the pain for Cosco Shipping, Orient Overseas and China Merchants.

© 2025 Bloomberg L.P.

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