Trump Reelection Could Cause US Import Spike Ahead of Tariffs, Maritime Experts Say
As Donald Trump returns to the White House in January, a short-term spike in import volumes at U.S. ports is inevitable, given the president-elect's strident stance on tariffs, some logistics experts say.
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"From a shipping perspective, we should expect an added surge in US import demand in the short term as shippers with non-time sensitive goods will bring in more goods prior to any new tariffs," maritime expert and Vespucci Maritime partner and CEO Lars Jensen said in a Nov. 6 LinkedIn post. "As it is not known exactly how big such tariffs might be, nor where they will apply and nor when this would happen it could amount to quite a demand surge."
On the campaign trail, Trump had floated the prospect of a 10% tariff on all U.S. imports, as well as a 60% tariff on Chinese-made products (see 2410210045) and a 25% tariff on imports from Mexico (see 2411040052).
Mexico was the top U.S. trading partner for imports as of September, while China was in second place. Meanwhile, Canada, Mexico and China are the top U.S. export destinations, according to Census data.
Given importers' experience of Trump's tariff policies from his first time in office, what also could happen is the return of higher ocean freight rates as importers rush to get goods into the U.S., according to Peter Sand, chief analyst for Xenata, an Oslo, Norway-headquartered air and ocean shipping rate benchmarking firm.
“The knee-jerk reaction from US shippers will be to frontload imports before Trump is able to impose his new tariffs. Back in 2018, the tariff on Chinese imports was 25%, now it is increasing up to 100% so the incentive to frontload is even greater," Sand said in a Nov. 6 response to the U.S. presidential election results.
“If you have warehouse space and the goods to ship, frontloading imports is the simplest way to manage this risk in the short term -- but it will bring its own problems. A sudden increase in demand on major trade lanes into the US when ocean supply chains are already under pressure due to disruption in the Red Sea will place upward pressure on freight rates," Sand continued. “We saw the negative impact of tariffs during Trump’s first term in office in 2018 when ocean container shipping rates spiked 70%. Shippers will be fearing more of the same this time around."
While U.S. imports might climb in the short term, supply chain stakeholders should be aware that shifting trade patterns could be a long-term consequence of the tariffs amid a prolonged trade war between the U.S. and China.
Said Vespucci CEO Jensen: "[W]e should expect more changes in supply chain patterns as the US tradewar will be heating up. For US imports this would most likely entail more changes in sourcing patterns such as what we for example have seen with Chinese goods in recent years routed via Mexico. But we might also expect this to add a negative impact on US exports due to retaliatory tariffs -- and in turn increasing the imbalance between full and empty container flows."
Said Sand: “[A]nother Trump presidency will reignite the trade war with China and provoke retaliatory action. In 2018, we saw China respond to US aggression by imposing tariffs of its own, which added even more fuel to the fire, so there is a risk this situation could escalate further in the months and years to come.”
Indeed, importers have already begun to diversify sourcing away from China following Trump's tariffs in 2018, and that diversification is likely to continue even more, according to Simon Heaney, senior manager of container shipping for U.K.-based Drewry Shipping Consultants.
Quoting Trade Data Monitor statistics, Heaney said that China's value share in dollars of U.S. container box imports has shrunk by around 13% since Trump's first term in office, from 40% in 2016 to 27% after eight months of 2024. During this same time frame, Vietnam more than doubled its share of U.S. imports by container ship, Heaney said in an Oct. 28 U.S. election update.
"More diversification of trade on its own isn't really a problem for container shipping. In fact, it's a positive as greater fragmentation of production would mean more shipping of intermediate parts," Heaney said. But "what would be a problem is if the U.S. decides to take things a step further and retreat into more 'America First' isolationist policies. Loaded imports at major U.S. ports are one of the main growth drivers in the container market right now, increasing 15% year-to-date after eight months of 2024. But that upward trajectory could be in danger if some of the more extreme policy ideas are realized towards isolation. [It] would be a tacit admission by the U.S. that it's giving up the battle with China for the hearts and minds of the rest of the world."