Trade Tariffs And Ocean Freight – Potential Impacts Of The US Election
The US election has always been a weathervane for global trade policies, and the linkage effect between trade tariffs and the shipping industry is particularly significant. With the dust settling on the 2024 election, if Trump returns to the White House, the tariff policy he advocates may once again reshape the global freight landscape. This article combines the latest industry trends and authoritative data to analyze the potential impact of the US election on trade tariffs and the shipping industry from three dimensions: historical experience, current situation, and future forecasts.
Table of Contents
Tariffs: Impact on Freight
Trump's Tariffs in 2018
Fast forward to 2024
Will Trump impose tariffs in 2025?
Tariff policies directly affect international trade costs and freight demand. Taking the "reciprocal tariffs" implemented by the Trump administration in 2025 as an example, the US imposed tariffs on Chinese goods as high as 145%, resulting in a surge in China's export costs to the US. This cost pressure is transmitted through the supply chain layer by layer and is ultimately reflected in shipping freight rates. According to Freightos data, the freight rate for a 40-foot container from Asia to the West Coast of the United States climbed to $4,333 in April 2025, up nearly 30% from the beginning of the year.
Supply chain transfer and capacity adjustment
High tariffs force companies to adjust their supply chain layout. For example, some Chinese manufacturers have transferred production capacity to Southeast Asia, resulting in a surge in exports to the United States from Vietnam, Malaysia and other countries. Drewry analysis shows that after Trump first imposed tariffs in 2018, China's net growth in container transportation to the United States was zero in six years, while Vietnam's transportation volume increased by 45% during the same period. After the tariff upgrade in 2025, a similar trade transfer effect reappeared, but Vietnam itself also faced a high tariff of 46%, prompting companies to further disperse production capacity to countries such as the Philippines and Indonesia.
Port and logistics efficiency impact
Tariff policies have also exacerbated port congestion and logistics delays. Eugene Seroka, executive director of the Port of Los Angeles, pointed out that the port's cargo volume is expected to fall by 10% in May 2025, and some routes will have "blank voyages" due to shrinking demand. At the same time, the increase in customs inspection standards and the adjustment of trade agreements (such as the renegotiation of the North American Free Trade Agreement) have increased the complexity of customs clearance and prolonged the detention time of goods.
In 2018, the Trump administration imposed a 25% tariff on Chinese goods, which directly impacted the Sino-US trade and shipping market. China's exports to the United States accounted for 16.75% of total exports from 19.24% in 2018 to 16.75% in 2019, while Vietnam, Mexico and other countries took over part of the transferred demand. The shipping market presents a differentiated pattern of "China stagnation and Southeast Asia growth": the average annual growth rate of container transportation from China to the West Coast of the United States is less than 1%, while the average annual growth rate of transportation from Vietnam to the United States is 7.2%.
Freight rate fluctuations and corporate responses
Tariffs have led to structural changes in shipping demand and increased freight rate fluctuations. In 2019, freight rates on the China-US route fell by 50% at one point, and shipping companies were forced to reduce capacity and merge voyages. To cope with cost pressure, companies have begun to adopt "nearshore outsourcing" strategies, such as moving production lines to Mexico to avoid tariffs, while using the rules of origin of the US-Mexico-Canada Agreement (USMCA) to reduce costs.
Long-term impact and industry lessons
The 2018 tariff war exposed the over-reliance of the global supply chain on a single market. Since then, companies have generally adopted a "China + 1" strategy to establish diversified production capacity in Southeast Asia, Latin America and other places. Drewry pointed out that although this decentralized layout has increased short-term costs, it has improved supply chain resilience and laid the foundation for coping with tariff upgrades in 2025.
Before the 2024 US election, tariffs and uncertainty in the shipping industry have become the most concerned issue for supply chain leaders. According to a survey by Descartes Logistics Systems Group, 48% of respondents listed "rising tariffs and trade barriers" as the top challenge, far exceeding supply chain disruptions (45%) and geopolitical instability (41%).
Current tariff policy and market reaction
The Biden administration has continued some tariffs on China, but the focus has shifted to "precision strikes", such as imposing 100% tariffs on key areas such as electric vehicles and semiconductors. This policy caused China's electric vehicle exports to the United States to fall by 35% in the first half of 2024, but the surge in demand in the European market has prompted Chinese automakers to accelerate the layout of localized factories. In the shipping market, the volume of China-US routes fell by 12% year-on-year, while the volume of China-Europe routes increased by 9% and freight rates rose by 22%.
Corporate strategy adjustment
In response to policy uncertainty, companies are accelerating the regionalization of supply chains. For example, Tesla transferred part of its battery production capacity from China to Mexico, taking advantage of North America's near-shore advantages to reduce tariff costs; retailers such as Walmart booked shipping space 6-8 months in advance to lock in freight rates and avoid shortages during peak seasons. At the same time, digital tools (such as Freightos's WebCargo platform) are widely used to help companies monitor tariff changes in real time and optimize transportation plans.
Will Trump impose tariffs in 2025?
If Trump wins the 2024 election, his "reciprocal tariff" policy, which he plans to implement in 2025, will once again shake the shipping industry. According to the disclosed plan, the United States will set a "minimum base tariff" of 10% for all trading partners and increase it to 60% for Chinese goods. This policy may trigger the following chain reactions:
Freight rate and capacity reconstruction
Drewry predicts that if the 60% tariff is fully implemented, China's shipping volume to the United States may drop by 40%, and freight rates on the Asia-US route may soar to US$8,000/FEU. In response to shrinking demand, shipping companies may cut trans-Pacific capacity by 20% and transfer ships to emerging markets such as Europe and the Middle East.
Deep adjustment of the supply chain
High tariffs will force companies to further diversify their production capacity. For example, Chinese electronics manufacturers may transfer production lines to India and Bangladesh, while the automotive industry may accelerate its layout in Mexico and Canada. This shift will reshape global shipping flows: the volume on the Southeast Asia-US route is expected to increase by 30%, while the volume on the China-US route may drop to 60% of the 2018 level.
Geopolitics and industry game
Tariff policies may trigger global trade retaliation. China has announced an 84% tariff increase on US goods, and the EU, Japan and others also plan to take countermeasures. This "tariff war" will lead to a shrinking global shipping demand. Drewry predicts that global container trade volume may fall by 2%-4% in 2025. At the same time, domestic inflationary pressure in the United States has intensified and consumer spending has decreased, further suppressing import demand.
Summary
The impact of the US election on trade tariffs and the shipping industry presents the characteristics of "history repeating and upgrading".
From the tentative tax increase in 2018 to the full tariff war in 2025, policy uncertainty has always been the biggest variable in the industry. Enterprises need to respond to challenges through supply chain diversification, application of digital tools and regional layout, while shipping companies need to flexibly adjust capacity and optimize routes to adapt to changes in demand. In the future, the game of tariff policies and the reconstruction of the global trade pattern will continue to shape the industry ecology. Only participants with resilience and innovation can gain a foothold in turbulence.
