- Shipping Firms Struggle as U.S. Tariff Confusion Grows.
- Freight Surge and Supply Delays as U.S. Tariffs Loom.
- Escalating U.S. Tariffs Spark Global Shipping Tensions.
The maritime shipping industry is getting ready to face disruption as the U.S. administration gets ready to introduce a fresh wave of “reciprocal tariffs” on nations with duties imposed on American products. This comes after prior import levies imposed on significant trading partners and an assortment of goods ranging from steel to autos, reports Reuters.
Shipping Firms Face Pressure from Tariff Volatility
International shipping titans that haul most of American retailers’ merchandise are suffering as a result. The business, which transports nearly 80% of international trade and is estimated to be worth $14 trillion a year, depends greatly on stable trade policies. But the changing tariff landscape has left customers and transport providers scrambling.
“The implementation of stacked tariffs has led to mounting confusion,” said Blake Harden, the Retail Industry Leaders Association’s vice president of international trade. “Companies have not had adequate time, certainty, and guidance they need to incorporate these changes and comply.”
Air Freight Surges Amid Ocean Shipping Chaos
With importers racing to outrun looming tariffs, some are turning to more costly air freight for goods that would normally arrive by sea. The change is intended to steer clear of delays and new cost of duties.
“Importers don’t know from one week to the next what their duty cost is going to be,” said Kit Johnson, director of import compliance at a U.S. customs brokerage and freight forwarding firm.
Record Imports as Firms Scramble to Preempt Tariffs
American container imports have risen to record levels, with businesses loading up on consumer products, machinery, and auto components to evade anticipated tariffs. In turn, ships and planes are being used to carry in-demand items such as automobiles, wine, cheese, and drugs.
Freight Rates Increase as Tariff Threats Loom
On the major trade route from East Asia to the U.S. West Coast, spot rates to transport a 40-foot container rose by an average of almost 16% in one day, showing increasing volatility. Analysts caution that this short-term tactic of front-loading imports cannot be maintained in the long term.
“You cannot make important decisions on your supply chain when the rules of the game keep changing,” said Peter Sand, Xeneta’s chief analyst.
Proposed Port Charges Would Plunge Industry Into Further Disruption
Another worry for the shipping industry is a proposal to charge high U.S. port call charges on ships with China connections. Critics say this would threaten seriously to hurt domestic exporters, such as agriculture and energy, and prompt chaotic port situations similar to those seen during the COVID-19 period.
A shipping executive in Greece commented on increasing reluctance by clients to ship goods under such unstructured circumstances: “We are in wait-and-see mode.”
Tariff Uncertainty Overflows into Manufacturing
Based on survey findings, the uncertainty over tariffs has already slowed recovery in the U.S. manufacturing industry, relying on both imports and exports. Analysts forecast a decline of 0.7% in container imports in 2025, reversing early-year gains.
“While there is still strong growth in the first quarter, this is expected to reverse in the second quarter of 2025 as tariffs bite,” S&P said.
Shortage of Clarity Causes Anxiety Among Stakeholders
With merely hours remaining for new auto tariffs to come into effect, market analysts were awaiting official word in suspense. “We wait for the Federal Register notices because that’s where all the details are, and so far we have nothing,” said Damon Pike, a trade specialist at a global accounting firm.
Other uncertainty arises from negotiations to redefine “country of origin” to “country of ownership” in trade policy—a change that could subject foreign-owned firms operating in the U.S. to new tariffs.
Customs Struggles to Keep Up with Rapid Policy Shifts
In the meantime, U.S. Customs and Border Protection is scrambling to modernize systems required to enforce the evolving tariff regulations. An earlier plan to impose duties on low-value direct-to-consumer products was put on hold after customs systems were swamped.
“The more of these tariffs we have, the harder it’s going to be for everyone to keep up,” said customs broker Johnson.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Reuters
