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Trump's plan to hike tariffs would spike shipping costs, just like in 2018, experts say
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Trump's plan to hike tariffs would spike shipping costs, just like in 2018, experts say
Sep 12, 2024 11:11 PM

LOS ANGELES, Sept 12 (Reuters) -

U.S. presidential contender Donald Trump's plan to hike

tariffs on imports if he is elected back to the White House in

November would send cargo rates soaring and accelerate

inflation, just like it did during his 2017-21 term, shipping

and retail experts said.

Trump, who is running against Democratic Vice President

Kamala Harris in the Nov. 5 election, has floated second-term

plans for blanket tariffs of 10% to 20% on virtually all imports

as well as tariffs of 60% or more on goods from China, in a bid

to boost U.S. manufacturing.

In their debate on Tuesday, Harris called his proposal a

"Trump sales tax" that will hurt working families, and has not

released her own plan for tariffs. President Joe Biden has

delayed implementing a proposed

quadrupling

of tariffs on Chinese electric vehicles to 100%, and a

doubling of duties on semiconductors and solar cells to 50%. He

had also proposed new 25% tariffs on lithium-ion batteries,

steel and other goods.

"Trump's import tariffs are 'history repeating' and will

cause a spike in ocean container shipping markets - with

consumers picking up the cost," said Peter Sand, chief analyst

at shipping pricing platform Xeneta.

The National Retail Federation, which represents Walmart ( WMT )

and other companies that account for almost half of

container shipping volume, is among the industry groups opposed

to Trump's proposed tariffs.

"Tariffs are a tax on imports, operating like a sales tax

wearing a mediocre disguise," NRF said earlier this week, noting

that they drive up cost of goods for consumers and hurt workers

and businesses.

"We're the poster child of how tariffs did not keep

domestic production in place," said Matt Priest, CEO of the

Footwear Distributors and Retailers of America, pointing out

that 99% of shoes are now imported.

"We will be out there engaging with policy members and

discussing how tariffs are paid by American consumers."

Ocean container shipping market rates spiked more than

70% after the Trump Administration announced new tariffs in

2018. The off-contract spot rate to ship a 40-foot (12.19-meter)

container on the busy trade route from China to the U.S. West

Coast jumped 75% to $2,604 between Jan. 1 and Nov. 1 that year,

Xeneta said.

The tariffs also disrupted supply chains as shippers fought

for extra cargo space on vessels, trucks and trains, while the

landed goods swamped ports and warehouses, leading to higher

prices for everything from furniture and footwear to steel.

Ocean freight rates are already elevated due to ongoing

Iran-backed Houthi attacks on ships near the Suez Canal trade

shortcut. That pressure, combined with a recent surge in holiday

goods and industrial material imports recently sent the cost to

ferry a 40-foot container from Shanghai to New York to $10,000.

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