Trump’s Tariff Hike Plan Could Drive up Shipping Costs, Experts Warn

By Lisa Baertlein

LOS ANGELES – Donald Trump’s proposal to increase tariffs on imports if he returns to the presidency in November is expected to drive up cargo rates and worsen inflation, similar to the effects seen during his previous term from 2017 to 2021, according to shipping and retail experts.

As he campaigns against Democratic Vice President Kamala Harris in the upcoming election, Trump has suggested imposing blanket tariffs of 10% to 20% on nearly all imports, along with tariffs exceeding 60% on Chinese goods, as part of his strategy to bolster U.S. manufacturing.

During their recent debate, Harris criticized Trump’s proposal as a "Trump sales tax" that would harm working families; however, she has not yet unveiled her own tariff plan. In the meantime, President Joe Biden has postponed a plan to significantly increase tariffs on Chinese electric vehicles and semiconductors, while also proposing new tariffs on products including lithium-ion batteries and steel.

Peter Sand, chief analyst at a shipping pricing platform, stated, "Trump’s import tariffs are ‘history repeating’ and will cause a spike in ocean container shipping markets – with consumers picking up the cost."

The National Retail Federation, which includes major retailers representing almost half of container shipping volume, has voiced opposition to Trump’s proposed tariffs. The organization remarked that tariffs act as a tax on imports, similar to a sales tax, which leads to higher costs for consumers and negatively impacts workers and businesses.

Matt Priest, CEO of the Footwear Distributors and Retailers of America, emphasized the ineffectiveness of tariffs in maintaining domestic production, citing that nearly all shoes sold in the U.S. are now imported. He added, "We will be out there engaging with policy members and discussing how tariffs impact American consumers."

Following the announcement of new tariffs in 2018, ocean container shipping market rates surged by over 70%. The cost to ship a 40-foot container from China to the U.S. West Coast skyrocketed by 75% during that year.

The introduction of tariffs also led to significant disruptions in supply chains as shippers competed for limited cargo space on vessels and trucks, resulting in congested ports and warehouses, which drove up prices across various sectors, including furniture, footwear, and steel.

Currently, ocean freight rates remain high, influenced by ongoing regional conflicts affecting shipping routes. A recent increase in demand for holiday goods and industrial materials has propelled the cost of transporting a 40-foot container from Shanghai to New York to approximately $10,000.