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The Trump presidency is seen to jack up ocean freight rates as a result of a reignited US-China Trade war
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Importers said Trump’s win is ‘a step in the wrong direction’ for international trade
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The just-elected US president is expected to enforce blanket tariffs on up to 20% of all imports to the US, along with additional tariffs of between 60% and 100% on goods from China
The Trump presidency is seen to jack up ocean freight rates as a result of a reignited US-China trade war.
“Shipping is a global industry feeding on international trade,” said Xeneta chief analyst Peter Sand, adding that “another Trump presidency is a step in the wrong direction.”
“We saw the negative impact of tariffs during Trump’s first term in office in 2018 when ocean container shipping rates spiked 70%. Shippers will be fearing more of the same this time around,” according to Sand.
Trump had promised to enforce blanket tariffs on up to 20% of all imports to the US, along with additional tariffs of between 60% and 100% on goods from China.
Before Trump reassumes the presidency, US shippers are seen to have a knee-jerk reaction by frontloading imports. In 2018, tariffs on Chinese imports was 25%. At present, it is rising to 100%. Thus, the incentive to frontload is greater, Sand said.
China can be expected to retaliate by imposing its own tariffs on US goods, sparking an escalation in the months and years to come.
Average spot rates from the Far East to the US West Coast and East Coast have remained stable in the weeks leading up to the US election, down -3.5% and -2.5%, respectively. But the current average spot rates of $5,210 per 40-foot container to the West Coast, and $5,820 to the East Coast are 167% and 134% higher than a year ago, mostly due to the ongoing Red Sea crisis.
This has been a “brutal year” for shippers, said the Xeneta chief analyst.
The years ahead when Trump is president may be even more difficult for importers and exporters. But at least “the industry now has a clearer understanding of the financial and operational risk and can execute the plans they will have prepared in the event of another Trump presidency,” said Sand.
READ: Xeneta expects 2025 to be another challenging year in container shipping
