Trump Trade Policies Impact Supply Chains, U.S. Cargo Port Activity

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Researched by Industrial Info Resources (Sugar Land, Texas)--President Donald Trump's global tariffs, especially those on Chinese imports, and new port fees on that country's vessels and their operators, pose a threat to supply chains and the global shipping of goods, according to various shipping-related groups.

As of April 18, a 10% baseline tariff applies to imports from nearly all countries. Although Trump on April 10 suspended country-specific reciprocal tariffs for 90 days, that did not apply to China--and it's the two countries' tit-for-tat tariff war that is affecting markets the most.

Trump has pushed forward with tariffs on China, which now sit at 145%, and in retaliation, China adjusted tariffs on U.S. imports from 84% to 125%, effective April 12. However, Trump has since exempted tech products like the iPhone and computers from the Chinese tariffs.

Still, "these changes represent a shift in U.S. trade policy and China trade policy, and may impact your landed costs, customs clearance procedures, and overall supply chain planning," shipping giant Maersk (Copenhagen, Denmark) told clients in an April 11 advisory on the global tariffs.

Meanwhile, Gene Seroka, executive director of the Port of Los Angeles--the busiest cargo port in the U.S.--recently said he expected cargo container activity to decline in the second half of the year by at least 10% compared to 2024. "That's because many importers have already brought their goods in early, and as prices begin to rise, consumers will think twice about many purchases," he said in a press release announcing the port's March cargo statistics.

In an April 11 media briefing with the Port of Los Angeles, Joe Kramek, chief executive officer of the World Shipping Council (WSC), was critical of Trump's tariffs: "Shippers are reacting to these tariffs and particularly on the Transpacific trade between Asia and the United States. ... When you have tariff rates of 125% to 145%, it effectively shuts down trade ... So, we have seen reports in the trade press of reduced purchases by shippers or a 'wait and see' attitude to see (if) some negotiations take place to perhaps smooth this out."

The WSC's members include Maersk and China COSCO Shipping Corporation Limited (COSCO)--the world's fourth-largest container line.

The transfer of goods from the U.S. and China is expected to be impacted further now that the Office of the U.S. Trade Representative (USTR) has announced plans to impose new port fees for Chinese ships and their operators docking at U.S. ports.

Fees on Chinese vessel owners and operators of ships built in China will be based on cargo weight, how many containers they carry or the number of vehicles onboard.

Among other aspects, beginning in mid-October, there will be a $50 fee per ton of cargo with the fees increasing each year for the next three years. Fees on Chinese-built ships will start at $18 a ton or $120 per container and also rise over the next three years.

However, there are exemptions, including one for empty vessels that arrive at U.S. ports to carry bulk exports such as coal or grain.

Shortly after the USTR's announcement, Chinese Foreign Ministry spokesman Lin Jian issued a statement criticizing the development. Port fees "raise global shipping costs, disrupt supply chain stability, and increase inflationary pressures in the U.S., ultimately harming American consumers and businesses." He warned that the country would take "necessary measures to firmly safeguard its legitimate rights and interests."

The USTR initially had proposed much higher fees, but reversed course after receiving public comments from more than 300 trade groups, including the American Apparel & Footwear Association (AAFA), in March.

The AAFA, whose members contribute more than $509 billion in annual U.S. retail sales, last week warned of negative impacts from the new port fees.

"We are deeply concerned that the newly announced port fees and shipping mandates are destined to have devastating consequences for American workers, consumers, and exporters," Nate Herman, senior vice president of policy at AAFA, said in a press release. "These measures are driving up shipping costs, shrinking GDP, and reducing U.S. exports. When ocean carriers raise rates, American families will pay the price through higher costs and growing product shortages, at a time when they can least afford."

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).