The recent presidential elections in the United States have sparked concern in the international trade arena. The president-elect has announced an aggressive plan to impose tariffs, with 60% on Chinese imports and between 10% and 20% on other trading partners. These measures, according to many analysts, could have a significant impact on the global logistics chain, triggering a series of consequences that could redefine trade and the world economy.
IMPACT ON GLOBAL LOGISTICS CHAINS
International trade, and maritime traffic in particular, are fundamental pillars of the global economy. Ports and maritime routes are the backbone of logistics chains, allowing goods and raw materials to flow between continents. The introduction of such high tariffs could cause significant disruption to these flows, particularly affecting the busiest routes, such as those connecting Asia, Europe and North America.
China, being the third-largest trading partner for the European Union and one of the largest exporters to the US market, could redirect its exports to other markets such as Europe, if the US tariffs go through. This could flood the European market with products at lower prices, impacting local industries and exacerbating trade tensions.
In turn, tariffs on European products destined for the United States would affect key sectors such as the automotive and luxury goods sectors, which are already facing a drop in Chinese demand. Manufacturers such as Volkswagen, Mercedes and luxury conglomerates such as LVMH would be forced to assume higher costs, which would impact the profitability and competitiveness of these companies and industrial giants.
PROTECTIONISM AND DEGLOBALIZATION: A PARADIGM SHIFT
Historically, the global economy has followed a course of trade liberalization, with the gradual elimination of tariff barriers, which has fostered sustained growth and progress of countries in recent decades. However, the protectionist policies proposed now mark a shift towards deglobalization. The goal of these policies would be to repatriate production and strengthen domestic industries, a strategy that aligns with the slogan of “ America First .”
However, this stance could backfire by increasing production costs in the US due to reduced access to cheaper materials and components from other countries. In addition, the European manufacturing sector, which is already in a fragile situation due to higher energy prices following the Russian invasion of Ukraine and slowing Chinese demand, would face a new challenge with these measures. The model of cheap energy for industry in these economies would be broken, meaning that tariffs would add another layer of uncertainty and financial pressure for European manufacturers.
THE ROLE OF MARITIME TRAFFIC IN A PROTECTIONIST WORLD
The maritime industry, which handles more than 80% of global trade in terms of volume, would be severely affected by the imposition of trade barriers. Major ports such as Los Angeles, Shanghai and Rotterdam would experience a decline in cargo volumes, which would have a knock-on effect on shipping rates and delivery times.
The possible slowdown in trade between the United States and China would negatively affect the container ship fleet that connects these two economic giants. The routes between Asia and North America are crucial for the income of the main shipping companies, and any decrease in cargo volume would impact the profitability of these companies, forcing them to look for alternatives to maintain their operating margins.
In this context, the shipping industry could face increased competition for routes and contracts, which could lead to a price war between shipping companies. This, in turn, would generate uncertainty and volatility in a sector already hit by fluctuations in fuel prices.
Maersk shares are holding up for the moment, up 15% this month, with the expectation that the US policy change will not have any effect, at least in the short term. US trade accounts for 5% of global maritime imports. Bilateral trade between the United States and China accounts for 1.4% of global maritime freight transport. US imports could even increase at the start of the measures, because importers would try to stockpile resources before the tariffs kick in. Although everything is still unclear and there is much speculation, at some point European products could even gain a certain advantage in the US markets over Chinese products, as they are subject to lower tariffs than Asian products.
Protectionist measures are intended to protect the US domestic market, but how long will it take for American companies to adjust their production volumes to the new requirements?
CONSEQUENCES FOR EUROPE: A DOUBLE WOUND
For Europe, which relies heavily on international trade with both the United States and China, the picture is even more complex. According to JPMorgan analysis, the divergence between the US and European economies has widened, and tariff policies will only accelerate this trend. The uncertainty surrounding tariffs has led fund managers to shift their investments into US stocks, leaving European markets lagging.
The UK, which is already struggling to stabilise its economy post-Brexit, will also be affected. Analysts at Goldman Sachs have adjusted their growth forecast for the country, saying the tariffs will have a “moderate” but significant impact on its economy.
GEOPOLITICAL TENSIONS AND THE FUTURE OF FREE TRADE
Protectionism not only affects the economy, but also has geopolitical implications. The recent meeting between Chinese President Xi Jinping and outgoing US President Joe Biden showed an attempt to prevent the economic rivalry from turning into a direct conflict. Xi has reiterated his willingness to work with the new US administration to manage differences and avoid an escalation of the trade dispute.
In this context, the notion of “decoupling” between the US and Chinese economies could be accelerated. This would imply that both countries seek to reduce their mutual dependence in critical areas, such as technology and semiconductors. The US policy of restricting China’s access to advanced technologies has generated a critical response from Beijing, which sees these restrictions as an obstacle to its development.
AN UNCERTAIN FUTURE FOR THE GLOBAL ECONOMY
The threat of protectionist tariffs puts the balance of the logistics chain and maritime traffic at risk. While the proposed policies could benefit certain sectors in the United States in the short term, they are likely to trigger a series of unintended consequences, such as higher product prices and a negative impact on European and Asian export industries. As global trade becomes more fragmented, economic actors will have to adapt to an environment where logistics efficiency and resilience in supply chains will become critical factors. Ports, shipping companies and logistics operators will have to be more agile to respond to a trade landscape that is becoming increasingly uncertain and unpredictable.
The world of international trade is at a turning point, where political decisions could redefine the rules of the game. In this new scenario, collaboration and dialogue will be essential to prevent trade tensions from leading to global economic stagnation.
However, investors seem confident that, at least in the short term, the effects will not be devastating. An initial surge in imports before tariffs are imposed could even boost demand for shipping, especially in a market already strained by logistical disruptions and high freight costs.
Historically, Trump’s protectionism has affected global trade only marginally, but the risk now is that a prolonged trade war will hurt economic growth and dampen demand, just as the shipping industry faces overcapacity after its expansion during the pandemic.
On the other hand, new US policies might benefit specific sectors, such as fossil fuels and steel, but threaten those dependent on global supply chains.
Meanwhile, volatility in financial markets and rising US debt create an uncertain environment. Investments in assets such as Bitcoin and gold have become safe havens against the possibility of higher inflation and geopolitical tensions.
When the new president is sworn in on January 20, 2025, at the Capitol in Washington, DC, as is tradition, we will get more answers, although I can tell you in advance that Trump’s administrations usually fulfill what they announce during the campaign.
