With Donald Trump's election as the next US president, the shipping sector is closely monitoring the anticipated economic strategies of his administration, especially amid ongoing trade frictions with China. Punit Oza, a notable figure in shipping and geopolitics analysis, shared on LinkedIn his perspective that Trump's government would likely push for equitable trade conditions with Asia, particularly China while expecting an uptick in Asian exports to the United States. This scenario, according to Oza, may make Asian imports more economically feasible through scale benefits. Furthermore, Oza highlighted that Trump's inclination towards boosting fossil fuel production domestically might drive trade allies to reevaluate their agreements, potentially leading to unpredictable and dynamic trade flows.
Oza pointed out the possibility of the shipping industry benefiting from a US-Asia agreement that could enhance ton-miles and foster bilateral trade, despite the prospect of volatile conditions. He also speculated that diminished US-Europe relations could result in longer shipping routes taking precedence over shorter ones. Lars Jensen, a container shipping industry specialist, predicted on LinkedIn a short-term increase in US import demand as a preemptive measure against anticipated tariffs, leading to an acceleration of non-time-sensitive goods imports. Jensen foresees long-term alterations in supply chain configurations due to escalating US trade disputes.
Experts, as reported by Reuters, expect cargo rates to surge, echoing the over 70% increase in ocean container shipping rates following the announcement of new tariffs in 2018 during Trump's first tenure. Economists argue that Trump's tariff policies might reset US import duty rates to those seen in the 1930s, potentially inflating prices, disrupting US-China trade, inviting counteractions, and profoundly impacting global supply chains. US connectivity metrics, reflecting a 3.37% increase from 2020 to 2024, contrast with the reduced connectivity during Trump's initial term from 2016 to 2020, likely a repercussion of the heightened tariffs imposed by his administration.
Source: Container News