In the days leading up to the presidential election and on election night, retailers and manufacturing companies increasingly called logistics partners to request “advance loading” ahead of any changes in tariff policy. President-elect TrumpDuring his campaign, he advocated aggressive expansion of existing U.S. cross-border trade tariffs.
Trump swears A comprehensive tariff of 10% to 20% will be levied on all imported products entering the United States, and a 60%-100% tariff will be levied on Chinese imported products.
“2018 has come and gone again,” said Paul Brashier, vice president of global supply chain at ITS Logistics, referring to the year in which Trump imposed sweeping tariffs for the first time in his first term. “These calls are not limited to shippers with Chinese imports. The threat of global tariffs is fueling calls for early loading around the world,” he said.
Brashear expects Trump’s election will lead to increased container demand and ship bookings, pushing up freight, trucking and warehousing rates. Freight inventory, e.g. Hunter Transportation Services Johor Bahru, Nat Swift, schneider nationaland XPOwere in rally mode Wednesday and freight railroads were also in rally mode, including norfolk southern airways and CSX.
among many Main market trends on Wednesday The U.S. dollar surged against major trade-related international currencies on Wednesday as traders and investors digested the Republican victory, such as EUR and Mexican Peso.
Shipping stocks suffer amid concerns over trade slump
The knee-jerk reaction for ocean carrier stocks has been negative, led by Maerskalthough consumer demand in the United States remains strong and early loading of imports will increase ocean freight rates, at least in the short term. Shipping analysts said Maersk and its peers overreacted. But they added that this was based on the belief that tariffs would increase trade costs, thereby reducing demand and volumes. They pointed out that this did not happen in 2018 and 2019, when sales grew by an average of 12%. “This speaks to the uncertainty of the situation rather than imminent doom,” Morningstar analyst Ben Slupetsky wrote in an email.
Lars Jensen, CEO of Vespucci Maritime, said that in the short term, import demand for containerized goods will surge as U.S. companies stock up ahead of new tariffs. “Especially as it relates to cargoes that are not time-sensitive. This will put upward pressure on freight rates in the coming months,” Jensen said.
According to spot ocean freight data tracked by Xeneta, an air and sea freight intelligence platform, early loading of Chinese imports during Trump’s trade war in 2018 pushed ocean container shipping rates up by more than 70%.
Peter Sand, chief shipping analyst at Xeneta, told CNBC that shippers will worry that the latest tariff threat will bring more of the same. “The shipping industry is a global industry that thrives on international trade, so a second Trump presidency is a step in the wrong direction,” Sund said. “The knee-jerk reaction of U.S. shippers will be to wait until Trump is able to impose new Import ahead of tariffs.”
He added that concerns that tariffs on Chinese imports would rise from 25% to 100% in 2018 would make the incentive to impose tariffs earlier “even greater.”
Slupetsky said by email that a decline in the number of ocean carriers could present a buying opportunity, but he was hesitant to argue that Maersk could profit from the early election because there are still many in global trade. Other issues need to be weighed. He continues to hold a fair value weight on Maersk and described its decline as an overreaction. “Potential tariffs create uncertainty but do not necessarily lead to poor performance, as evidenced by the performance of these names during the pre-tariff period in 2018.”
Jefferies analyst Omar Nokta said a “wave of bookings from retailers” ahead of new tariffs would benefit ocean carriers’ profitability. However, he said there was uncertainty about overall volume growth and, in the longer term, the problem was that trade volumes were likely to slow significantly in the coming years. He wrote: “Global trade volume has grown by 2 times GDP growth this year and may moderate to 1x by 2025, but if tariffs affect trade patterns, trade volumes may fall below this level, which will have a negative impact on ocean shipping. Negative impact on people’s income.
Republican tariff policy remains difficult to predict
Trump has vowed to act quickly on tariffs, and Robert Lighthizer, the former U.S. Trade Representative during Trump’s first term, said, Tell that to Wall Street money managers Policy analysts at Piper Sandler have said in recent weeks that if Trump is re-elected, he may begin implementing his sweeping tariff proposals quickly upon taking office.
But trade experts say it’s important not to read too much into Trump’s tariff threats when trying to analyze where policy will ultimately go. Matthew Rubel, who served on Presidents Obama and Trump’s White House Trade Policy Negotiations Advisory Committee and the Office of the U.S. Trade Representative, told CNBC he doesn’t think there will be a global tariff outcome. In negotiations, everything is on the table.
“Tariffs are a criminal tool to ensure that we can trade freely and create jobs in the appropriate categories of domestic strategies,” Rubel said. “Lighthizer under Trump implemented a policy of bargaining through strength and Policies that focus on bilateral agreements. These agreements will ensure that we benefit economically. It is nuanced and not one-size-fits-all. The Trump administration will be clear on the business case,” he said.
Peter Boockvar, chief investment officer at Bleakley Financial Group, said the impact of the tariffs will depend on implementation.
“A lot will depend on whether there will be selective tariffs on certain products/industries or whether there will be a haphazard approach of imposing tariffs on all imports,” Boockvar said. “The former is what the market will tolerate, I don’t think it will be the latter.”
“What level of tariffs will be imposed is an open question,” Jensen said. “Trump has mentioned anything between 100-500%, so there’s absolutely no idea what will actually happen. But it means huge uncertainty for U.S. importers, and the only way to reduce that uncertainty is Just import goods as early as possible.
Stephen Lamar, CEO of the American Apparel & Footwear Association, said he expected Trump to announce new tariffs “in the first days of his presidency.”
“Businesses are adopting a range of strategies to mitigate the inflationary impact that these import taxes will soon have. Unfortunately, there are no good tariff mitigation strategies; the challenge is to find the least bad strategy,” Lamar said.
He added that importing products ahead of the inauguration is one approach, but it would only provide temporary relief while upcoming freight issues, including the threat of another strike at East Coast ports and the Lunar New Year, would cause a surge in imports. More complex.
“We will work with the new administration and Congress to ensure that any new tariffs do not add to the regressive and misogynistic burdens that hard-working Americans feel due to the existing tariff structure,” Lamar said.
Matthew Shea, president and CEO of the National Retail Federation, said in an emailed statement that his organization is ready to work with President-elect Trump and Congress Effective trade policy will enhance U.S. competitive advantage in research, development, and innovation and protect strategically important critical infrastructure. “However, sweeping tariffs on consumer goods and other non-strategic imports would amount to a tax on American households. This would drive up inflation and prices and lead to job losses,” he added.
Mexico trade boom could be a target
In addition to tariffs, the future of the USMCA, the three-nation free trade agreement that replaced NAFTA, will also be the subject of renegotiation in 2026. It requires countries to start reviewing trade deals after six years, a process that will begin in 2019. July 2026. made in China in mexico Avoiding Trump/Biden tariffs may be part of trade renegotiations.
Logistics companies that serve cross-border trade from Mexico to the United States told CNBC that Trump’s new tariffs could have a negative impact on the historic cross-border truck trade. Cross-border trade between Mexico and the U.S. is up about 52% so far this year through September. A record.
Jordan Dewart, CEO of Redwood Mexico, which specializes in cross-border logistics, said his company received a lot of concerns from customers before and shortly after the election about the immediate proposed tariff changes that would impact businesses already in the Northbound shipments in process to the United States.
“Obviously, this is going to have a huge impact on U.S. and Mexican companies,” Duarte said. “With more than $2 billion crossing borders every day, even short-term changes can have a huge impact and could lead to companies importing goods in advance to get ahead of these changes.”
This will create short-term storage demand at the U.S.-Mexico border and could increase overall trade volumes in the fourth quarter, he added. “The short-term impact of pulling freight will be increased freight rates, especially in Mexico where driver shortages and fuel prices are already causing upward pressure,” Duarte said. “The peso depreciated 2.5% overnight, which will provide some relief as most rates are negotiated in U.S. dollars.”
Duarte said the proposed tariffs would cause some companies to further delay investments in Mexico. Many European and Asian companies have been investing heavily in Mexico as a way to bolster their trade strategies. Companies including John Deere and Tesla, once Trump targets, have recently announced plans to scale back manufacturing in Mexico.
