Liner companies are preparing defensive tactics in response to Trump’s trade war tariffs.

Global container growth is facing a significant setback this year due to the escalating tariff war initiated by President Donald Trump. The impact of these tariffs is already being felt in Asia with noticeable cargo booking cancellations. Trump’s recent threat to impose an additional 50% tariff on China, in response to China’s 34% counter tariff on American goods, has further escalated tensions.

In a post on his social media platform, Truth Social, Trump made it clear that if China does not withdraw its latest retaliation, the additional 50% tariff will take effect, bringing the total tariffs to 104%. He also announced the termination of talks with China and the initiation of negotiations with other countries. This move has already led to a wait-and-see approach among US importers, causing significant disruptions in the supply chain and inventory management.

The blanket US import tariffs announced recently have resulted in a surge of cargo booking cancellations in Asia, hindering carriers’ efforts to raise transpacific freight rates. This has put the May contract negotiations in a state of uncertainty. As a result, there may be additional last-minute blank sailings to the US and some ships could potentially be placed in hot layup.

According to industry experts, the effective US tariff rate is expected to rise substantially to 36%, setting the stage for a full-blown trade war. China and Vietnam, two countries heavily targeted by the Trump administration, accounted for 51% of total US container imports in 2024. The trade-weighted tariff rate is estimated to be over 36%, posing a significant risk of stagflation in the US if the tariffs are implemented without exemptions.

Linerlytica has already cut its global container demand growth projections to -1.1% in 2025, anticipating the impact of the escalating tariffs. The potential extra 50% hike in tariffs aimed at China by Trump could further exacerbate the situation. Data from Linerlytica shows that 11% of global container trade volumes are now tariffed, with the US-China trade war in 2018-19 leading to a 0.5% drag on global box trade.

It is crucial for businesses to closely monitor the developments of the tariff war and adjust their strategies accordingly. The uncertainty and volatility in global trade could have long-lasting implications for container growth and supply chain operations. Companies may need to reassess their sourcing strategies, explore alternative markets, and mitigate risks to navigate through these challenging times.

In conclusion, the current tariff war initiated by President Trump is causing disruptions in global container growth and trade dynamics. The escalating tensions between the US and China are leading to significant uncertainties in the market, impacting supply chains and container shipping. It is essential for businesses to stay informed, adapt to changing circumstances, and implement contingency plans to mitigate the risks associated with the ongoing trade war.