SHIPPING: Court ruling on tariffs could fuel surge in Asia-US container rates – analysts

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US are already facing upward pressure amid the 90-day tariff pause, but Wednesday’s ruling by a federal court could add fuel to the trend, according to shipping analysts.

“The decision of the US Court of International Trade to deem [US President Donald] Trump’s sweeping tariffs as unlawful is good news for shippers – but it could signal the beginning of the next era of confusion in global supply chains,” analysts at ocean and freight rate analytics firm Xeneta said.

Emily Stausboll, Xeneta senior shipping analyst, said that even if the appeal fails, Trump will not throw in the towel, and he has other levers to pull to achieve the same outcome as the sweeping tariffs.

“We only have to look at the US government proposal to introduce port fees on China-affiliated ships and the SHIPS for America Act to understand the range of options at Trump’s disposal in the ongoing trade wars,” Stausboll said.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said the 90-day pause on 145% tariffs on Chinese goods has already driven a sharp rebound in ocean freight demand.

“Shippers have been frontloading to beat the August expiration,” Levine said. “This ruling may add fuel to that trend, especially if tariffs are actually suspended – even temporarily.”’

Levine said that some shippers deterred by the 30% tariffs may now rush to move goods before the appeals process concludes or new tariff mechanisms are activated.

“That could increase container demand even further, adding to the strength of the early start to peak season,” Levine said.

RULING ADDS UNCERTAINTY
Lars Jensen, president of consultant Vespucci Maritime, said the ruling by the court adds a new level of uncertainty for US importers.

“Not only do they have to contend with the risks associated with changing tariffs, now it is also cast into doubt whether or not the announced tariffs will even be implementable – and this also raises the question whether tariffs paid in recent weeks can ultimately be reclaimed,” Jensen said in a post on LinkedIn.

If, after appeals, the tariffs are ultimately found to be unlawfully implemented, shippers should have a good case for getting the paid tariffs back, Jensen said.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.

They also transport liquid chemicals in isotanks.

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