Experts and exponents wonder what kind of transformation Donald Trump’s re-election as President of the United States will bring to the global shipping industry. Various shipowners, shipbrokers, shipping agents, and so on have expressed that the return to the White House of the billionaire entrepreneur will bring profound implications for dry bulk, tanker, ro-ro, and container markets alike. Trump’s approach is well known for his protectionist economic policies and aversion to multilateral agreements. This attitude could rekindle trade tensions with China and at the same time get the US closer to Russia. Due to the interconnectedness of shipping compartments with tariffs and sanctions, each will suffer distinct but interconnected impacts in their respective markets. Potential reshaping of trade routes and impacts on commodity prices are expected from next year.
In the dry bulk sector, Trump’s previous policies of tariffs and trade barriers on Chinese goods led to major shifts in global commodity flows. Should he impose similar tariffs, dry bulk routes, particularly those supporting the shipments of grains, may face reduced volumes, as Chinese demand potentially shifts toward alternative suppliers. For American exporters, particularly of agricultural commodities like soybeans and corn, the risk of retaliatory tariffs from China remains a primary concern. Should this occur, US exporters may need to find new markets as well, a shift that would impact shipping routes and likely drive up freight rates at least in the first stage of settling. Furthermore, Trump’s drive for domestic energy independence may intensify US coal production, which could bolster export volumes changing the balance among coal exporters and affecting its price.
In this regard, Trump’s previous administration emphasized increased oil and gas production, fostering a period of growth in US crude exports. A renewed focus on energy independence could boost domestic oil production, reinforcing the US’s role as a significant crude exporter, which would stimulate demand for tankers. However, this growth might encounter volatility if Trump also moves to renegotiate or reduce US commitments to climate agreements, potentially creating friction with European trading partners who are pushing for stricter environmental standards. An expansion in US oil exports would likely benefit VLCC (Very Large Crude Carrier) routes from the Gulf Coast to Asia, while shifts in global oil flows could depress rates for tankers operating in traditional routes across the Middle East and Europe. We could expect a tightening also on Iran and Venezuela, this would lead to a reduction of the dark fleet, and the tanker market plus the environment would benefit from it. Among the myriad of possible scenarios, there is also the rapprochement to Russia with a possible stop to the protracted conflict between Ukraine and Russia, which would widen the change in world balances and maritime trade, as well as again commodity prices.
The container and ro-ro shipping sector could be affected even more than others by Trump’s tariffs with strong impacts on Chinese exports of goods and manufactured products, such as Electronic vehicles (EV). Indeed container and roll-on-roll-off volumes from China to the US might drop sharply. This scenario would force carriers to recalibrate their networks and shipping lines potentially reducing trans-Pacific routes and redirecting capacity to emerging markets, regions that could absorb some of the displaced trade volume. Additionally, increased tariffs may encourage US companies to shift manufacturing domestically or source from Mexico, driving up short-sea shipping along North American corridors but reducing long-haul trans-Pacific demand. Container carriers may also face an increase of uncertainty and volatility in freight rates, particularly if new tariffs trigger abrupt shifts in demand and supply chain adjustments.