Shipping Braces for a New Trump Era

As Joe Biden’s presidency ends, marking one of the most profitable periods in recent years for the shipping industry, Donald Trump returns to the White House, promising swift and decisive action. With the incoming administration prepared to enact numerous executive orders immediately, the global shipping industry is gearing up for a potentially volatile period.

Key Sectors and Trade Dynamics at Stake

The offshore wind sector is anticipated to be among the most brutally hit under Trump’s second term. Meanwhile, the industry is closely monitoring Trump’s campaign promises, including tariff policies, a tougher stance on Iran, and claims of quickly resolving the war in Ukraine—each of which could ripple through global trade networks.

The first Trump-era trade war saw China respond to U.S. tariffs by targeting American farmers, reducing imports of U.S. grain, and substituting with Brazilian supplies. This substitution had limited net tonne-mile impact, though dry bulk segments, especially grain and steel, bore the brunt of the disruption. According to Clarksons Platou Securities, dry bulk was the most affected, followed by LNG and LPG. Clarkson’s data shows that overall shipping tonne-mile growth declined by 0.5% in both 2018 and 2019 during Trump’s first term.

Industry Leaders Weigh In

Martin Stopford, one of the most renowned maritime economists, noted the challenges of enacting sweeping changes in trade policy within a four-year term. Reflecting on Trump’s renewed presidency, Stopford told Splash: “Trump’s tariff wall might be a stage in that, but like walls to keep out migrants, it is difficult to achieve much in four years.”

Burak Akdemir, managing director of Range Shipping, suggested that a peacemaker Trump in his second term could recalibrate U.S.-China relations, significantly affecting global trade. “If tensions ease, it might restore confidence and boost trade volumes, potentially benefiting dry bulk flows tied to Chinese imports of iron ore, coal, and grain,” Akdemir said. However, he warned that protectionist policies or continued geopolitical uncertainties could disrupt trade, shifting flows to emerging markets.

Managing director of Thailand-based Precious Shipping, Khalid Hashim, offered a more optimistic perspective. Drawing from past experience, Hashim noted that trade disruptions during Trump’s first term and Biden’s continuation of similar policies ultimately increased trade flows into the U.S. “If the past is any predictor, such disruptions tend to have immediate but short-term impacts before leading to increased tonne-mile demand and expanded trade,” he observed.

Challenges to Decarbonisation Efforts

One significant concern for the shipping industry under Trump’s second term is the potential slowdown in global decarbonization efforts. Analysts at Sea-Intelligence cautioned that ongoing work at the International Maritime Organization (IMO) to establish unified regulations and targets could face setbacks. “This could accelerate the shift toward local, rather than global, decarbonization regulations,” they warned, complicating compliance for international shipping operators.

Volatility Ahead

Analysts at Hartland Shipping summarized the potential impact of Trump’s return to the Oval Office as follows: “The most confident conclusion we can make is that the volatility and uncertainty in today’s shipping markets are only going to increase under Trump 2.0.”

With trade policies, geopolitical dynamics, and environmental regulations hanging in the balance, the shipping industry enters this new era prepared for challenges and opportunities as it navigates an increasingly unpredictable global landscape.

Source: Splash 247

Sharing is caring!