BIMCO: How the US-China tariffs impact shipping

These additional tariffs, announced on 4th of April, follow previous ones implemented in February and March, targeting items like grains, coal, LNG, and crude oil. Niels Rasmussen mentioned that in 2024, China was the third-largest importer of U.S. exports, accounting for 7% of the total value of U.S. exports. He explained that chemicals, computer and electronic products, agricultural products, transportation equipment, and oil and gas made up 18%, 14%, 13%, 13%, and 9% of the value of these exports to China.

He also pointed out that these trade dynamics could be negatively impacted by the tariffs, which would harm both economies and potentially slow economic growth. Specifically, he noted that the U.S. agricultural sector would be significantly affected, as it exported USD 18.2 billion worth of goods to China, representing 23% of U.S. agricultural exports.

Rasmussen also predicted that the dry bulk market, particularly the Panamax and Supramax segments, would face a negative impact from these tariffs. He said that in terms of volume, grains, coal, and petcoke were the largest exported commodities. As these cargoes became more expensive due to the tariffs, he expected China to increase imports from other countries such as Brazil, Ukraine, Indonesia, Russia, Australia, and Mongolia. He added that U.S. exporters might seek alternative markets for their goods as a result.

Regarding the tanker trade, Rasmussen suggested that it might not be greatly affected by the tariff increases. He noted that China could turn to OPEC and Brazil to replace the oil it had been purchasing from the U.S., while the U.S. should also be able to find other buyers for its oil exports. He concluded by acknowledging the risk that the cumulative effect of all recent tariff increases could slow economic activity, leading to negative impacts that would stretch beyond the direct consequences of the tariffs themselves.