WCA Focus on international sea air to door business
banenr88

NEWS

Trump's victory may indeed bring about major changes to the global trade pattern and shipping market, and cargo owners and the freight forwarding industry will also be significantly affected. 

Trump’s previous term was marked by a series of bold and often controversial trade policies that reshaped international trade dynamics. 

Here is a detailed analysis of this impact:

1. Changes in the global trade pattern

(1) Protectionism returns

One of the hallmarks of Trump's first term was a shift toward protectionist policies. The tariffs on a range of goods, particularly from China, are aimed at reducing the trade deficit and reviving U.S. manufacturing.

If Trump is re-elected, he is likely to continue this approach, possibly extending tariffs to other countries or sectors. This could lead to increased costs for consumers and businesses, as tariffs tend to make imported goods more expensive.

The shipping industry, which relies heavily on the free movement of goods across borders, could face significant disruption. Increased tariffs could lead to lower trade volumes as companies adjust supply chains to reduce costs. As businesses deal with the complexities of a more protectionist environment, shipping routes may change and demand for container shipping may fluctuate.

(2) Reshaping of the global trade rules system

The Trump administration has re-evaluated the global trade rules system, repeatedly questioned the rationality of the multilateral trading system, and withdrew from multiple international organizations. If he is re-elected, this trend may continue, creating many destabilizing factors for the global market economy.

(3) The complexity of Sino-US trade relations

Trump has always adhered to the "America First" doctrine, and his China policy during his administration also reflected this. If he takes office again, Sino-US trade relations may become more complex and tense, which will have a profound impact on trade activities between the two countries.

2. Impact on shipping market

(1) Fluctuations in transportation demand

Trump’s trade policies may affect China’s exports to the United States, thereby affecting transportation demand on trans-Pacific routes. As a result, companies may re-adjust their supply chains, and some orders may be transferred to other countries and regions, making ocean freight prices more volatile.

(2) Adjustment of transportation capacity

The COVID-19 pandemic has exposed the fragility of global supply chains, prompting many companies to reconsider their reliance on single-source suppliers, especially in China. Trump's re-election could accelerate this trend, as companies may seek to move production to countries with more favorable trade relations with the United States. This shift could lead to increased demand for shipping services to and from Vietnam, India, Mexico or other manufacturing hubs.

However, the transition to new supply chains is not without challenges. Companies may face increased costs and logistical hurdles as they adapt to new sourcing strategies. The shipping industry may need to invest in infrastructure and capacity to adapt to these changes, which may require time and resources. This capacity adjustment will increase market uncertainty, causing freight rates from China to the United States to fluctuate significantly during certain periods.

(3) Tight freight rates and shipping space

If Trump announces additional tariffs, many companies will step up shipments before the new tariff policy is implemented to avoid additional tariff burdens. This could lead to a sharp increase in shipments to the United States in the short term, likely concentrated in the first half of next year, with a huge impact on sea freight and air freight capacity. In the case of insufficient shipping capacity, the freight forwarding industry will face an intensification of the phenomenon of rushing for spaces. High-priced spaces will frequently appear, and freight rates will also rise sharply.

3. Influence of cargo owners and freight forwarders

(1) Cost pressure on cargo owners

Trump’s trade policies may result in higher tariffs and freight costs for cargo owners. This will increase operating pressure on cargo owners, forcing them to reassess and adjust their supply chain strategies.

(2) Freight forwarding operational risks

In the context of tight shipping capacity and rising freight rates, freight forwarding companies need to respond to customers' urgent demand for shipping space, while at the same time bearing the cost pressure and operational risks caused by scarcity of shipping space and rising prices. In addition, Trump’s governing style may increase scrutiny of the safety, compliance and origin of imported goods, which will increase the difficulty and operating costs for freight forwarding companies to comply with U.S. standards.

Donald Trump's re-election will have a significant impact on global trade and shipping markets. While some businesses may benefit from a focus on U.S. manufacturing, the overall impact is likely to result in increased costs, uncertainty, and a reconfiguration of global trade dynamics.

Senghor Logistics will also pay close attention to the policy trends of the Trump administration in order to promptly adjust the shipping solutions for customers to respond to possible market changes.


Post time: Nov-13-2024