News / A Trump presidency would put pressure on ocean rates and Asian exports

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If Donald Trump becomes US president again next year, there will be more pressure on container freight rates, as he is expected to reinstate protectionist measures that will reduce imports.

Among the speakers at a shipping forum organised by South Korea’s National Assembly this month, Korea Maritime Institute head Kim Min-soo explained: “This would spell decline, particularly in transpacific rates and intra-Asia rates.

“A Trump administration will mean the US could import fewer consumer goods, especially from Asia. This will affect intra-Asia flow of raw materials and intermediate goods.

“Exports of these will decrease as the US strengthens its domestic production policy and imposes tariffs on Chinese products.”

A Trump administration would also mean reduced US imports of steel products due to similar tariffs targeting shipments from Asia.

On the other hand, if vice-president Kamala Harris wins, Democrat president Joe Biden’s policies are likely to continue, with the impact on freight rates expected to be limited.

A Harris presidency could also mean more automobile exports to the US, as she is likely to carry on the current goal of getting electric vehicles (EVs) to make up half of all new cars in the country by 2030. Mr Trump and the Republicans, however, would probably cut subsidies for EVs.

And, Mr Kim told delegates: “If Harris is elected, the annual average growth rate of container throughput in US ports is expected to be 2.5%-2.7%, while under Trump, it is expected to be 1.6%-2%.”

To counter the impact of a Trump presidency on container shipping, Mr Kim advised liner operators to develop new routes to Europe, South America and Africa. In addition, he said, the government should prepare tax benefits and financial policies to ease the burden of initial costs.