As Americans cast their votes in the 2024 presidential election, the outcome promises significant implications for global trade and the shipping industry, affecting everything from container routes and tanker regulations to decarbonization efforts. With U.S. candidates Trump and Harris both championing populist policies, the potential shift in the regulatory landscape could create ripple effects across the main shipping segments, as highlighted by industry analysts and leaders at recent conferences. This article explores how the election could reshape trade patterns, impact shipping demand, and alter regulatory frameworks, bringing both opportunities and risks to the global shipping sector.
1. The Impact on Shipping in a Fragmented Global Economy
The rise of populism and protectionist policies is reshaping international trade, with many leaders emphasizing deglobalization, near-shoring, and friend-shoring—concepts that encourage sourcing from geographically closer or allied countries rather than relying on distant suppliers. According to Precious Shipping’s Q3 report, the results of the U.S. election could either bolster or hinder the global economy, depending on the victor. A continuation or escalation of protectionist policies would likely disrupt international trade flows and elevate costs, creating an unpredictable environment for shipping companies dependent on stable trade volumes and routes.
Industry veteran Graham Porter, chairman of Tiger Group Investments, voiced concerns at the recent Maritime CEO Forum, stating, “The world is breaking apart… We’re on a very different trend. It’s no longer collaboration.” This global shift away from cooperative trade could lead to more restrictive regulations, tariffs, and possibly an increase in national fleets. In turn, the need for shipping companies to adjust trade routes and strategies may intensify, creating a landscape where nimble adaptation is crucial.
2. Container Shipping: Adjusting to Shifting Trade Patterns
Container shipping is among the most exposed segments to political changes, as it relies heavily on consumer-driven demand and cross-border goods movement. In the case of a Trump victory, his administration has signaled a likely increase in tariffs on imports, which would directly affect container shipping flows to the United States. According to Sea-Intelligence, this could initially boost short-term demand as companies rush to import goods before tariffs take effect. However, long-term, container shipping may need to adapt to more sustainable routes and trade patterns as businesses seek to minimize tariff impacts by sourcing from alternative markets.
This shift may see an uptick in routes between China and Mexico as companies adjust their supply chains, noted Jeremy Nixon, CEO of Ocean Network Express (ONE), at the Marine Money event in Singapore. Nixon emphasized the importance of adaptability: “We are the servants of global trade… We have to pick up those trends very quickly and adapt.” For container shipping, this adaptability could mean higher costs but also opportunities for growth in less conventional trade routes as companies reconfigure their logistics to align with tariff changes and near-shoring trends.
3. Gas Shipping: High Stakes for LNG and LPG Markets
In the energy sector, the outcome of the election could dramatically impact the liquefied natural gas (LNG) and liquefied petroleum gas (LPG) shipping markets. With China being a primary importer of U.S. LNG and LPG, any policy shift that restricts these energy exports would ripple through the industry. Broker SSY indicated that the election winner could influence the direction of U.S. gas export policies, potentially imposing new trade tariffs or limiting future export projects, which would force LNG and LPG carriers to adjust to changing demand patterns.
Additionally, as the Harris campaign hints at possible regulatory reversals on fracking, this too may affect the production and export of natural gas. Given the significant demand for U.S. LNG and LPG in Asia, any disruption in these flows could lead to volatility in tanker rates and shifts in trading routes. This geopolitical uncertainty presents both risks and strategic opportunities for gas shipping operators, as they may need to recalibrate their operations based on fluctuating international relations.
4. Tanker Markets: The Complex Impact of Sanctions and Trade Wars
The tanker sector faces a particularly complex outlook depending on the U.S. election’s outcome. Mark Cameron, COO of Ardmore Shipping, speculated that Trump’s return to office could bring heightened sanctions against Iran, potentially curtailing Iranian oil exports. For tankers, this would mean the need to pivot away from sanctioned cargo while capitalizing on other trade routes where demand remains robust.
Meanwhile, Henrik Hartzell, senior advisor to GSB Tankers, noted that a potential Trump administration could bring “greater operational complexity” due to the increased likelihood of trade tensions with China. As Iranian crude exports recently reached their highest level since 2018, stricter sanctions could alter the tanker sector’s dynamics, intensifying the importance of non-Iranian oil sources and reshaping trade routes across the Middle East and Asia.
Alan Hatton, CEO of Foreguard Shipping, summarized this outlook by noting, “What’s been quite bad for the world has generally been quite good for shipping.” Tanker operators are likely to see demand fluctuations tied to global conflicts, sanctions, and trade tensions, with the outcome of the U.S. election serving as a significant pivot point.
5. Dry Bulk: Vulnerability to a Potential Trade War
Dry bulk, the largest segment of the shipping industry, is especially vulnerable to the possibility of renewed trade tensions between the U.S. and China. The first Trump-era trade war saw China reduce its imports of U.S. grains, which are among the largest commodities transported by dry bulk carriers. Analysts at Clarksons Platou Securities noted that, in 2018 and 2019, global tonne-mile growth fell by 0.5% annually, driven largely by the trade war’s impact on dry bulk cargoes such as grain and steel.
A renewed trade war under a Trump administration could prompt China to source these goods from Brazil or other countries, reducing demand for trans-Pacific dry bulk routes. The election could determine the future balance of this sector, especially as experts like Saad Rahim, chief economist at Trafigura, forecast the possibility of a bifurcated commodities market, with distinct trade alliances forming on each side of the Pacific. For dry bulk operators, the challenge will be adjusting to these shifts and potentially finding new demand sources to counterbalance any U.S.-China trade reductions.
6. Car Carriers: Risks for the Automotive Transport Sector
The car carrier segment, which transports vehicles globally, has experienced unprecedented demand as Chinese-manufactured electric vehicles flood international markets. However, the sector now faces uncertainties as Trump’s platform includes a pledge to curb Chinese EV imports, potentially impacting the demand for car carriers moving these vehicles across global markets.
If tariffs or restrictions on Chinese electric vehicles are imposed, car carriers could experience a drop in demand for China-to-U.S. routes, although European and other Asian markets may offer alternative demand. This presents a risk but also potential strategic realignment opportunities for car carriers that are flexible in their route offerings.
7. Decarbonization Efforts: Regulatory Shifts Ahead
The shipping industry’s decarbonization path may also be significantly impacted by the election. Trump’s stance on environmental regulation contrasts sharply with the current Biden administration’s push for decarbonization, particularly through the International Maritime Organization (IMO). Sea-Intelligence analysts warn that a second Trump term could lead to a “dead end” for the IMO’s global regulatory efforts, potentially resulting in a fragmented approach to emission regulations.
This scenario would necessitate regional or national regulations for decarbonization, complicating compliance for shipping companies operating across multiple jurisdictions. For shipping, a fragmented regulatory landscape means additional operational challenges and potential cost increases, as companies may need to adhere to multiple sets of environmental rules depending on the region. The election’s outcome could thus determine the pace and scope of shipping’s green transition, with lasting effects on how the industry meets sustainability goals.
Conclusion: Preparing for an Era of Change and Adaptation
In the coming months, the shipping industry will need to monitor the election outcome closely, as each candidate presents distinct challenges and opportunities across various shipping segments. From container ships adapting to trade pattern shifts to tankers navigating potential sanctions, the sector must brace for both immediate disruptions and long-term changes. Moreover, the decarbonization agenda’s fate may hinge on the election, determining whether the industry moves forward with unified global targets or splinters into regional regulatory frameworks.
Amid these challenges, shipping operators will need to remain adaptable and proactive, anticipating shifts in trade flows and regulatory requirements while capitalizing on new opportunities that arise in a volatile geopolitical environment. As industry leaders and analysts predict, the only certainty for shipping in 2024 and beyond is the necessity of adaptation in a world increasingly shaped by political and economic forces.
