President Trump‘s potential revival of sweeping import tariffs is creating widespread uncertainty in US shipping markets, with industry experts warning of possible supply chain disruption and skyrocketing freight rates.
“Trump is billing his trade policy as America First, but the people it is hurting the most right now is US shippers,” warns Peter Sand, Chief Analyst at Xeneta, the ocean and air freight intelligence platform.
The proposed tariffs could include a 25% levy on imports from Mexico and Canada potentially from February 1st, with previous threats suggesting up to 60% on Chinese goods and 10-20% from other countries. This uncertainty in implementation timing and scope is creating significant challenges for supply chain management.
Historical data from Xeneta shows the dramatic impact of previous trade tensions. During the 2018 US-China trade war, ocean container shipping markets experienced a striking 70% rate increase. The China to US West Coast route saw spot freight rates jump from $1,503 per FEU to $2,604 per FEU between January and November 2018.
Current market conditions are already strained, with Far East to US West Coast rates at $5,234 per FEU – 29% higher than last year due to the Red Sea conflict. A similar 70% surge from current levels would push rates beyond previous Covid-19 records.
Industry observers note that while a potential Israel-Hamas ceasefire could provide some relief through resumed Red Sea routing, Trump’s tariff uncertainty continues to pose significant challenges.
“Shippers want to take decisive action against these geo-political threats. In the short term that may mean building up stock inventories if they know when tariffs are coming into effect and the goods within scope,” added Sand.
“In the longer term, shippers may look to shift supply chains out of China to nations such as India or neighbouring South East Asia countries if the trade war escalates dramatically. However, they will not commit to this financial investment and massive supply chain disruption based on rhetoric and political posturing,” he concluded.
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