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U.S. Secretary of Defense Pete Hegseth, Panama Canal Authority Administrator Ricaurte Vasquez, and Commander of the U.S. Southern Command Adm. Alvin Holsey tour the Miraflores locks, in Panama City, Panama April 8, 2025. REUTERS/Aris Martinez
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Ship Photo of The Week
U.S. Secretary of Defense Pete Hegseth, Panama Canal Authority Administrator Ricaurte Vasquez, and Commander of the U.S. Southern Command Adm. Alvin Holsey tour the Miraflores locks, in Panama City, Panama April 8, 2025. REUTERS/Aris Martinez
Top Stories
Shipping’s Carbon Toll Sets Sail
The IMO just gave the green light to the world’s first global carbon pricing scheme for shipping, setting course for net-zero emissions by 2050.
Under the new rules set to be formally adopted in October, starting in 2028, ships must clean up their fuel mix or cough up to the tune of $380 per tonne of high-intensity emissions, plus $100 per tonne above a lower cap. Estimates indicate the plan could raise up to $40 billion by 2030 to support maritime decarbonization and close the price gap between green and fossil fuels.
But smooth sailing it wasn’t. The U.S. walked out of the talks before they even began this week, with the Trump Administration threatening “reciprocal measures” against any fees charged to U.S. ships.
Meanwhile, 63 nations who were in attendance (including China, the EU, and Japan) backed the deal, and others — mostly oil-rich states — opposed or abstained. Critics slammed the deal’s ambition deficit, pointing to a projected 8% emissions cut by 2030 — far short of the IMO’s 20% target.
Still, the industry hailed the deal as historic. Now comes the hard part: turning a carbon surcharge into cleaner ships, greener fuels, and actual progress toward a more sustainable shipping future.
Full Steam Ahead: Trump Charts New Course for Shipbuilding
President Trump has signed a sweeping executive order aimed at reviving U.S. shipbuilding, beefing up the maritime workforce, and reclaiming dominance on the high seas. Titled “Restoring America’s Maritime Dominance,” the order comes as China dominates the sector while the U.S. embarrassingly lags.
At the center of the plan is the Maritime Action Plan (MAP), a 210-day roadmap involving every major agency from Defense to Homeland Security. Early action items include urgent repairs at the U.S. Merchant Marine Academy, deregulation reviews, and a full shipbuilding audit.
The plan also proposes new tariffs on Chinese port gear, a 10% fee on cargo dodging U.S. ports via Canada and Mexico, and big-dollar incentives for private shipyard investment — backed by a new Maritime Security Trust Fund.
Also on deck: Arctic strategy, more U.S.-flagged vessels, maritime scholarships, and a push to get allies building in U.S. yards. One thing’s clear: Trump wants the U.S. shipbuilding engine running hot again.
President Trump may call it “strategic,” but markets aren’t dancing. Stocks slipped Thursday after the White House confirmed tariffs on Chinese goods would soar to 145%, erasing Wall Street’s brief midweek rally sparked by a 90-day pause on tariffs for countries that haven’t retaliated.
Beijing didn’t wait long to respond — on Friday, China slapped U.S. goods with 125% tariffs, denouncing Trump’s moves as “bullying.” The tit-for-tat sent bond yields sliding, gold to record highs, and investors scrambling for clarity.
Though the White House insists trade talks with nations like Vietnam, Israel, and India are progressing, business leaders warn the “pause” is paper-thin. The real message? Uncertainty is back, and it’s freezing decisions on investment, hiring, and supply chain planning.
With $650 billion in U.S.-China trade hanging in the balance, the world’s two largest economies are teetering on the edge of decoupling. And nobody’s sure what comes next.
Ports Brace for Cargo Collapse
While Washington plays tariff chess, America’s ports are watching volumes sink. After a strong start to the year, global container bookings fell 49% in early April — and U.S. imports dropped a staggering 64%. Amazon is pulling Asia orders, factories are slowing production, and the WTO now forecasts a global trade contraction in 2025.
The National Retail Federation and Hackett Associates project a 20% drop in U.S. import volumes for the back half of the year, reversing two years of post-pandemic growth. Monthly TEU numbers are expected to plunge through summer, with May alone forecast down 20.5% year-over-year. Gene Seroka of the Port of LA summed it up: “We’ve seen a surge as importers raced to beat the tariffs — but that won’t last.”
China, the U.S.’s top maritime trading partner, already shows signs of a chill. Its March export volumes to the U.S. dropped 12.6% from February, as the 10% and 125% tariffs kicked in. The message from the docks? Stormy waters ahead.
Freight Prices Hold… For Now
Despite the chaos raining down from trade policy, container spot freight rates haven’t sunk — yet.
Drewry’s World Container Index saw slight gains on key lanes, including Shanghai to LA and Shanghai to NY, which ticked up 3% and 2%, respectively. But the Shanghai Containerised Freight Index (SCFI) reveals cracks. Rates on U.S. lanes dropped 5% westbound and 2.5% eastbound, as shippers delay or cancel bookings amid tariff chaos. Many are shifting more cargo into the spot market — some doubling exposure to 40–50% of volume.
Asia-Europe fares are faring better. Carriers’ capacity cuts helped bump rates modestly, with Shanghai-Rotterdam up 4% and Shanghai-Genoa up 1%. Still, forwarders say pricing is increasingly… flexible.
In short: it’s a tale of two markets — where steady rates mask mounting pressure with tariffs distorting demand, pushing some shippers to rush orders, while others pull the plug. Buckle up — this pricing calm may be the eye of the storm.
Busted Tankers and Teapots
The U.S. Treasury and State Departments just dropped the hammer on a vast sanctions-evasion network smuggling Iranian oil — targeting a UAE-based shipping boss and 30 vessels tied to Iran’s “shadow fleet.”
Operating through Prime Tankers and Glory International, the scheme blended Iranian oil with Iraqi exports, masked origins, and used dark-activity tactics like AIS manipulation to slip past authorities. The tankers — flying flags from Panama to Palau — also moved oil via risky ship-to-ship transfers near Iran, Iraq, and the UAE.
China wasn’t spared: Guangsha Zhoushan Energy Group was sanctioned for importing over 13 million barrels of Iranian crude via a terminal connected to a so-called “teapot” refinery. Two more vessels and several management companies were also blacklisted.
It’s the fifth round of sanctions resulting from Trump’s “maximum pressure” campaign that he dusted off in February, aiming to choke off Iran’s oil trade and force it into a new nuclear deal — one dark tanker at a time.
White House Rethinks Costly China Ship Fee Plan
The Trump administration is backpedaling on its proposed port fees targeting Chinese-built ships after a wave of industry backlash. Originally pitched as a bold strike against China’s maritime dominance, the plan could’ve cost carriers over $3 million per U.S. port call.
Now, sources say the White House is considering a softer rollout — possibly delaying implementation, scaling fees to vessel size, or linking them to a company’s China-built fleet ratio. The goal: avoid wrecking industries that rely on bulk cargo, ag exports, or niche shipping trades.
Container and car carriers were expected to bear the brunt, but Jefferies warns the fallout could ripple across all sectors.
Trump’s trade team argues the fees will boost U.S. shipbuilding, but critics — from coal execs to soybean exporters — say it’s more likely to sink their margins. As one insider put it: “This wasn’t built for grain ships — it was built for megabox boats.”
Panama Puts Chinese Port Operator on Notice
Panama’s top auditor has accused Hong Kong-based CK Hutchison Holdings of major contract violations at its Panama Canal terminals — allegations that could sink the company’s control of two critical ports at Balboa and Cristobal, not to mention its $22.8 billion global ports division sale to BlackRock assuming Beijing doesn’t torpedo it first.
The claims center on a 2021 contract renewal granted without proper approvals and millions in unpaid fees. The auditor is calling for criminal charges and urging Panama’s maritime authority to consider revoking the concession.
CK Hutchison, which holds a 90% stake in Panama Ports Company, says it has invested over $1.7 billion in the facilities — well beyond its contractual obligation.
But with Washington increasingly wary of China’s grip on key infrastructure, the audit could set the stage for a geopolitical and commercial shakeup at one of the world’s most important maritime chokepoints.
Canal Security Pact Marks U.S. Pivot
In a notable shift of tone from the Trump Administration, Defense Secretary Pete Hegseth announced a sweeping military partnership with Panama to counter what he called “China’s malign influence” over the Panama Canal. The announcement, made during the first Pentagon chief visit to Panama in decades, includes “first and free” passage for U.S. warships and plans to reestablish a military presence at former U.S. bases like Rodman and Howard.
The agreement follows Trump’s controversial remarks about “taking back” the canal — and comes as Panama formally exits China’s Belt and Road Initiative. But sovereignty concerns loom. Panama insists the agreement honors its sovereignty, while U.S. officials quietly omitted that point in English-language statements — leaving the question of ultimate authority still on the table.
Beyond canal security, the pact includes joint efforts on border control and crime. With tensions rising and Chinese port control still unresolved, the canal continues to be a flashpoint in U.S.-China competition.
As always, we’d love to hear your feedback. Email [email protected] with any questions, comments, tips, or concerns. Don’t forget to check out the Club Discord and gCaptain.com for the latest maritime news.
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