New US tariffs and potential counter-tariffs from trading partners are set to dramatically alter international trade dynamics and freight markets, according to market analyst Drewry.
Head of supply chain advisors, Philip Damas, predicts that favoured trading partners of the US, such as the Philippines, Malaysia and South Korea, will see increased transport volumes, while countries facing higher tariffs, including China and Vietnam, will likely experience declines.
Drewry’s analysis highlights the sensitivity of trade to tariff changes, noting that the tariffs imposed by the first Trump administration in 2018 froze US-China trade volumes while Vietnam benefitted from a 45% increase in trade volume over the same period. The new tariffs are even more severe, with China facing a 34% tariff, while Vietnam faces a 46% tariff, significantly reshaping trade flows in Asia.
READ: US tariffs may threaten UK ports
This shift may encourage companies to relocate factories to southeast Asia to avoid tariffs. However, the impact on the freight sector could be profound. Changes in transport volumes, service levels and port coverage will disrupt global shipping, with new US penalties on Chinese ships potentially exacerbating these shifts. US penalties could impose fines of US$1 million per US port visit on carriers operating Chinese-built ships or those owned by Chinese companies.
In response, shippers, forwarders and carriers are urged to reassess their strategies, with actions including sourcing diversification, fleet reorganisation and exploring non-US markets to mitigate the effects of higher trade barriers. As these new tariffs reshape the landscape, the freight sector faces a challenging yet opportunistic future.
