Oil prices rise as Trump threatens tariffs on India over Russian oil purchases
Oil prices rose on Wednesday amid renewed supply concerns following U.S. President Donald Trump’s threat to impose tariffs on India for continuing t...
The global ocean shipping industry, which handles roughly 80% of world trade, is facing heightened uncertainty amid a series of trade and geopolitical threats from the U.S. administration.
At the annual S&P Global TPM Container Shipping and Supply Chain Conference in Long Beach, industry leaders grappled with the potential impact of increased protectionism and shifting trade policies spearheaded by President Donald Trump.
The U.S. has recently imposed an additional 10% tariff on Chinese goods and floated proposals that include port entry fees of up to $1 million for Chinese-built vessels, with fees for other operators potentially reaching $1.5 million. Further tariff proposals target products from Mexico, Canada, the European Union, as well as steel and aluminum, adding layers of complexity for global shipping companies.
“These actions have created unprecedented uncertainty across the industry,” said Peter Sand, chief analyst at transportation pricing platform Xeneta. Trade experts warn that such measures could reduce international trade volumes and weaken the negotiating power of container ship owners, who have long held the upper hand in pricing.
Attendees at the Long Beach conference included major container carriers such as MSC, Maersk, and Hapag-Lloyd, as well as marquee customers like Walmart and logistics firms including DSV and DHL. These stakeholders are now assessing the ripple effects of the Trump administration's policy shifts, which come amid other global challenges. The sector is already contending with higher costs driven by severe weather events and strategic rerouting to avoid geopolitical risks, such as attacks by Iran-backed Houthi militants in the Suez Canal region.
Market indicators reflect the tension in the industry. The Drewry World Container Index reported that the spot rate for a 40-foot container had dropped to $2,629, down 75% from the pandemic peak of $10,377 in September 2021, reaching levels last seen in May 2024. Analysts from Jefferies noted that while wild swings in freight rates are possible, the overall outlook for 2025 is one of moderation.
In a related move, the U.S. Trade Representative recently proposed additional fees on Chinese-built vessels entering U.S. ports as part of a plan to bolster domestic shipbuilding. The proposal has raised concerns that the increased costs could be passed along the supply chain, potentially leading to higher prices for consumer goods ranging from toys and clothing to food and fuel.
“The economic burden on U.S. exporters and importers will be significant,” said container shipping expert Lars Jensen. As negotiations begin for the upcoming container shipping contracts, industry participants remain cautious, awaiting further developments that could reshape global shipping and trade dynamics in the coming months.
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