Experts warn that Trump's proposal to raise tariffs would lead to a surge in shipping costs, similar to what occurred in 2018
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Experts warn that Trump's proposal to raise tariffs would lead to a surge in shipping costs, similar to what occurred in 2018
Donald Trump's plan to increase tariffs on imports if re-elected in November could drive up cargo rates and fuel inflation, much like during his 2017-2021 presidency, according to shipping and retail experts. Trump, who is challenging Democratic Vice President Kamala Harris in the November 5 election, has proposed blanket tariffs of 10% to 20% on nearly all imports and tariffs of 60% or more on Chinese goods, aiming to bolster U.S. manufacturing.
During their debate on Tuesday, Harris criticized the proposal, calling it a "Trump sales tax" that would burden working families, though she has not unveiled her own tariff strategy. Meanwhile, President Joe Biden has delayed plans to quadruple tariffs on Chinese electric vehicles to 100% and double duties on semiconductors and solar cells to 50%. Biden also proposed new 25% tariffs on lithium-ion batteries, steel, and other imports.
Peter Sand, chief analyst at shipping pricing platform Xeneta, remarked that Trump's tariffs are "history repeating" and would once again cause ocean container shipping rates to soar, with consumers shouldering the increased costs. The National Retail Federation (NRF), which represents major retailers like Walmart, is among the industry groups opposing Trump’s tariff plan. The NRF emphasized that tariffs act like a disguised sales tax, raising consumer prices and hurting businesses and workers alike.
Matt Priest, CEO of the Footwear Distributors and Retailers of America, pointed out that tariffs have failed to protect U.S. manufacturing, noting that 99% of footwear is now imported. He vowed to engage policymakers on how tariffs ultimately affect American consumers.
The Trump administration's 2018 tariffs caused a 70% spike in ocean container shipping rates, with the cost to ship a 40-foot container from China to the U.S. West Coast rising 75% to $2,604 between January and November of that year, according to Xeneta. Supply chains were disrupted as shippers scrambled for cargo space, leading to higher prices for goods ranging from furniture to steel.
Compounding these pressures, recent attacks on ships near the Suez Canal and a surge in holiday goods and industrial imports have pushed container shipping costs from Shanghai to New York to $10,000.
Source: Reuters