The shipping industry is experiencing significant turbulence as US President Donald Trump has threatened new tariff policies on international trade partners. On April 2, Trump announced a 10% across-the-board baseline tariff that has already gone into effect for numerous countries. The situation intensified when Trump threatened to impose additional tariffs on China unless Beijing removed its 34% retaliatory duties on the U.S. The stated objectives behind these tariff measures include protecting American industries, reducing trade deficits, and pressuring trading partners into concessions.
Analysts warn that the tariffs could exacerbate existing bottlenecks at U.S. ports, where container shortages and labor disputes have already strained logistics networks. According to Flexport data, empty container ratios at U.S. ports have surged from 20% pre-pandemic to 70% today, signaling deep inefficiencies in cargo handling.
The tariffs are forcing companies to reconsider manufacturing locations. While some may shift production from China to Southeast Asia or Mexico to avoid high duties, the reality is fraught with hurdles. The U.S. ranks 19th globally in shipbuilding, producing fewer than five vessels annually, and faces a severe shortage of merchant mariners. Shipping lines are already responding: Mediterranean Shipping Company (MSC) announced the cancellation of six trans-Pacific sailings to manage demand drops, while others are diverting vessels away from U.S. ports to avoid congestion and rising costs.
The policy’s immediate fallout includes soaring freight rates and operational disruptions. For instance, a 40-foot container from Shanghai to Los Angeles, which cost 3,000 in January,now exceeds 6,000 due to port delays and rerouting. The requirement for U.S.-built and -flagged ships to handle 5% of exports and 15% of imports—a provision aimed at boosting domestic maritime jobs—could add $40 billion annually to industry costs, according to the American Association of Port Authorities.
Shipping executives are urging policymakers to reconsider the tariffs’ impact on critical sectors like agriculture and manufacturing. The American Farm Bureau Federation warns that retaliatory measures from affected countries could decimate U.S. exports, while the National Retail Federation predicts a 12% surge in consumer prices by year-end.
As tariffs strain global trade networks, the shipping industry faces escalating costs and disruptions. Without urgent policy adjustments to ease port congestion and address labor shortages, the U.S. risks exacerbating inflation and harming critical export sectors.