The global shipping industry, which handles 80% of world trade, finds itself in the midst of profound uncertainty. U.S. President Donald Trump’s protectionist trade policies, coupled with the shifting dynamics of global supply chains and challenges posed by climate-related events, are rocking shipping and commerce.
Since President Trump’s inauguration in late January, the U.S. has intensified, in both word and policy, trade conflicts with key economic partners, including China, Mexico, Canada, and the European Union. Trump’s administration has toyed with a series of tariffs designed to protect domestic industries, but these measures have created confusion as they threaten economic strains on global supply chains.
The 25% tariff on goods from Canada and Mexico that were imposed March 4 and rescinded on March 6 could come back in early April, NPR reports. Additionally, the U.S. has announced duties on steel and aluminum imports, straining industries that rely on global trade and contributing to rising shipping costs.
As anticipated, the countries being hit with U.S. tariffs are retaliating. On March 10, China began imposing tariffs of 10-15% on U.S, agricultural goods like chicken, wheat, corn, soybeans, pork, beef, and fruit. China is the largest overseas market for many of these U.S. goods.
Supply chain challenges
“The world has become very unpredictable,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters on March 3 at the S&P Global TPM Conference in Long Beach, Cal. “Having higher tariffs and additional fees is not good for the global economy.”
The conference, dominated by discussion of growing pressures placed on the global shipping market, involved industry leaders and executives from major shipping companies—including MSC, Maersk, Hapag-Lloyd, Walmart, DSV, and DHL
The shipping industry is already grappling with rising costs, supply chain instability, and logistical challenges. Experts at the conference warned that uncertainty from escalating trade tensions could further dampen shipping demand, leading to shifts in freight rates, which have already seen dramatic changes in recent years.
Falling shipping fees and rising costs
The Drewry World Container Index, a key freight pricing benchmark, has shown a staggering 75% drop from its pandemic-era highs, now hovering at $2,629 per 40-foot container as of February, Reuters reports. This is a significant decline from the record highs of $10,377 in September 2021.
Meanwhile, the shipping industry continues to face challenges from rising costs driven by tariffs, fuel prices, and disruptions in supply chains.
Adding to the strain are disturbances related to climate change. Severe weather events, including storms and flooding, continue to impact global trade routes. Security concerns, particularly in the Red Sea region, have forced ships to reroute from the Suez Canal, further adding to transit times and shipping costs.
Chinese-built ships and American-made fines
Among the most contentious developments is the proposal by the U.S. Trade Representative to impose hefty fees on Chinese-built vessels. The proposal would stipulate that Chinese-owned maritime operators, including state-backed companies like COSCO, could be required to pay up to $1 million per ship to dock at U.S. ports. For non-Chinese operators using Chinese-built ships, fees could reach as high as $1.5 million per vessel.
The proposal has stirred controversy. While it aims to revive U.S. shipbuilding, it also raises concerns about its impact on global shipping flows. The move could benefit South Korean and Taiwanese shipbuilders, but it also risks increasing shipping costs for U.S. consumers, potentially raising prices on goods such as electronics, clothing, and fuel.
The uncertain future of global trade
As 2025 progresses, analysts predict continued volatility in global shipping rates, with a chance for moderation later in the year—provided that trade policies stabilize. Still, the uncertainty created by protectionist policies, particularly U.S. tariffs on goods from China, Mexico, and the European Union, is expected to affect global demand. Industry experts are warning that these changes could raise consumer prices on key goods, ranging from food to electronics.
The scale of recent U.S. trade actions has been described as unprecedented in scope, with fears that the effects could reverberate across industries, particularly in the shipping sector. The changes are steering the global shipping industry into one of its most uncertain periods in recent history.
As tariffs rise and new trade barriers emerge, the cost of shipping goods—and by extension, the price consumers pay for everyday products—may continue to climb, reshaping the global economic landscape for several years.
