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International Cooperation Department
Tel.: (+86-21) 65853850-8034
Fax: (+86-21) 65373125
E-mail: ICDept@sisi-smu.org
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International Shipping |
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| Higher import tariffs will lead to higher shipping costs |
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Date:2024-09-18 Readers:
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During the recent US presidential election debate, Trump mentioned plans to raise tariffs. Market analysts believe that raising import tariffs will lead to higher shipping costs and a repeat of the spike in market prices seen during his US presidency.
Data released by Xeneta, an ocean freight rate intelligence platform, shows that when Trump raised tariffs on Chinese imports in 2018, containerised ocean freight prices soared by more than 70 per cent, such that the average spot freight rate per FEU on the China-US West route soared from $1,503 on 1 January 2018 to $2,604 on 1 November 2018.Xeneta's chief analyst Peter Sand said raising trade barriers is a negative move. When Trump raised tariffs in 2018, we saw the cost of transporting goods by sea skyrocket and his latest proposal will repeat history.
Peter points out that when consolidation prices go up, costs are passed down and it's the end consumer who ultimately pays the bill. And Trump's proposed tariffs come at a time when the global supply chain is under deep and intense pressure as a result of the Red Sea crisis, with spot rates from the Far East to the US East Coast having risen by 303% between 1 December 2023 and 1 July 2024. Spot rates from the Far East to the US West Coast have risen by 389 per cent over the same period.
According to Peter, shippers have responded to supply chain pressures by importing as much cargo as possible as quickly as possible. The early loading of cargoes following the Red Sea crisis led to a significant increase in freight rates, and shippers will be seen to adopt the same behaviour before any new tariffs come into force. ‘Whether it's a trade war or the Red Sea Crisis, geopolitical conflicts can be damaging to the maritime supply chain and are happening more frequently than ever before.’ According to Peter, industry stakeholders don't like uncertainty as it reduces their ability to manage supply chain risk.
https://www.cnss.com.cn/html/hygc/20240914/354593.html
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