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US threats of hefty tariffs and million-dollar port fees

raise

alarms

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Experts call protectionist moves by US 'unprecedented'

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Global shipping rates soften, weakening carriers' hand as

contract renegotiation begins

By Lisa Baertlein

LONG BEACH, California, March 3 (Reuters) - The global

ocean shipping industry that handles 80% of world trade is

navigating a sea of unknowns as U.S. President Donald Trump

stokes trade and geopolitical tensions with historical foes as

well as neighbors and allies.

That is the backdrop for this week's S&P Global TPM

container shipping and supply chain conference in Long Beach,

California, an annual event that marks the start of container

shipping contract negotiating season.

Attendees this year include industry heavyweights like

container carriers MSC, Maersk and Hapag-Lloyd ( HLAGF )

, marquee customers including Walmart ( WMT ), and

major logistics firms including DSV and DHL.

These companies will be grappling with the ripple effects of

increased protectionism, which could reduce international trade

while weakening the negotiating position of massive container

ship owners that have drawn robust profits and for years held

the upper hand in pricing.

Trump has already slapped an additional 10% tariff on goods

from China, the world's largest exporter, and has proposed

million-dollar port entry fees for Chinese-built ships.

As early as Tuesday, the U.S. could impose 25% tariffs on

familiar goods like avocados and tequila from Mexico, and beef,

lumber and oil from Canada.

Trump has threatened to levy an additional 10% tariff on

Chinese goods. His administration also plans new or higher

tariffs on steel and aluminum and has floated 25% duties on

products from the European Union.

"Unprecedented uncertainty is all around," said Peter Sand,

chief analyst at transportation pricing platform Xeneta.

The world's biggest importer's shift away from free trade

hits as global supply chains are managing higher costs from

global warming-fueled severe weather and routing ships away from

the Suez Canal to avoid attacks by Iran-backed Houthi militants

in support of Palestinians in Gaza.

U.S. container imports of everything from plastic toys to

machine parts have surged, in part due to early purchases to

avoid tariffs. But trade experts warn that a pullback is likely

once new import taxes kick in, targeted nations retaliate, and

inflation-weary shoppers absorb the brunt of tariff-related cost

increases - something that could pressure shipping demand and

prices.

The Drewry World Container Index's spot rate for a 40-foot

container was $2,629 as of Thursday, 75% below the pandemic peak

of $10,377 in September 2021 and lowest since May 2024.

"The geopolitical landscape has of course become more

complex which could lead to wild swings for freight rates in

either direction, but our base case is for a moderation

throughout 2025," Jefferies analysts said in a recent note.

In another move that has set off alarms around the globe,

the U.S. Trade Representative on Feb. 21 proposed hefty fees on

Chinese-built vessels entering U.S. ports under a

union-supported plan to spur U.S. shipbuilding.

Under the proposal, a vessel owned by Chinese maritime

transport operators including state-owned COSCO

would pay a port entrance fee of up to $1 million per vessel.

The fee for other operators using Chinese-built ships could top

out at $1.5 million.

The change could benefit Taiwanese and South Korean

liner operators. Still, experts warn it will have a major impact

on container carriers and could translate into steeper consumer

prices for goods from toys and clothing to food and fuel.

"The economic burden on U.S. exporters and importers will be

huge," container shipping expert Lars Jensen said on LinkedIn.

"The actions taken by the U.S. administration over the past

four weeks are unprecedented in scope and scale."