U.S. president Donald Trump’s second term has been defined by the bold use of tariffs that is now reshaping seaborne trade flows and container freight markets.
On “Liberation Day” (April 2, 2025), the administration imposed steep duties on trading partners, pushing the effective U.S. tariff rate to its highest level since the 1930s.
Since then, the White House has announced a series of targeted tariffs, including a Section 301 port-fee scheme that levies charges on foreign‑built or Chinese‑operated vessels calling at U.S. ports. This white paper examines what the Trump tariffs are, the legal authority underpinning them, how they are applied, their impacts on trade and shipping so far, and the uncertainties facing companies involved in seaborne freight.
Understanding the Legal Foundations Trump’s Tariffs
The U.S. Constitution empowers Congress to regulate foreign commerce and impose tariffs, but for decades Congress has delegated substantial discretion to the President. A Congressional Research Service report notes that the U.S. Court of Appeals for the Federal Circuit has generally upheld statutes granting the President authority to adjust tariffs, unless he clearly misinterprets the scope of the law.
Key statutes used by President Trump since reassuming office include:
- Section 232 of the Trade Expansion Act (1962) – allows tariffs to protect national security, subject to an investigation by the Commerce Department.
- Section 201 of the Trade Act (1974) – permits temporary safeguards for domestic industries injured by imports.
- Section 301 of the Trade Act (1974) – enables tariffs to address unfair trade practices or violations of trade agreements.
- Section 122 of the Trade Act (1974) and Section 338 of the Tariff Act (1930) – allow tariffs to address balance‑of‑payments problems or discrimination against U.S. goods.
- International Emergency Economic Powers Act (IEEPA) (1977) – empowers the President to regulate commerce during national emergencies.
Trump’s reliance on these authorities, particularly IEEPA and Section 301, is being challenged in court.
Appeals courts have ruled many of the tariffs unlawful but allowed them to remain pending Supreme Court review. The Supreme Court will hear the case in November 2025, creating uncertainty over whether some tariffs will survive. Even if overturned, analysts note other statutes could be used to re‑impose duties, though they would require investigations and more time.
An Overview of Trump’s Tariff Measures
Liberation Day tariffs: On April 2, 2025, the administration launched a sweeping regime of “reciprocal” tariffs. According to the Financial Times’ Trump tracker, as of September 4, these duties raised the effective tariff rate to around 16% based on announced policy. This is nearly ten times higher than the pre‑Trump level and pushed actual tariff receipts well above $10 bn per month. The new tariffs particularly targeted imports from China, the EU, India, Brazil, Canada and Mexico. While some partners subsequently negotiated deals (UK, Vietnam, Indonesia and Japan), the U.S. overall tariff rate remains near Depression‑era highs.
Tariffs on steel and other goods: President Trump signed a proclamation on June 3 that increased the section 232 duty on steel to 50% from 25% on all countries including allies. The EU had earlier imposed a 25% duty on steel to counter Trump’s 2019 tariffs, but it had been relaxed. A 50% tariff on a range of semi-finished copper products and copper-intensive derivative goods such as copper pipes, wires, rods, sheets was imposed on August 1. In September President Trump said in a social media post that he would raise tariffs on heavy trucks to 25%, 50% on cabinets, and 30% on furniture under national security provisions. These three sectors are currently subject to investigation as required under Section 232. The U.S. has also said that “derivative” steel products could be subject to tariffs such as wind turbines, windows and doors with some metal.
Tariffs on Brazil and Mexico. None for Russia: Washington applied a 50 % tariff on many Brazilian goods in July 2025, citing alleged anti‑American actions by the Lula government. Mexico, under U.S. pressure, proposed 50 % tariffs on Chinese cars and 1,400 other products to curb Chinese trade and avoid secondary U.S. tariffs. Trump has also urged G7 countries to adopt secondary tariffs on China and India for purchasing Russian oil. Brussels responded by indicating it was planning tariffs on Russian oil sold to Hungary and Slovakia but these provisions have yet to be formally approved and may not be implemented. Russia was excluded from Trump’s reciprocal tariffs.
Tariffs on Indian goods: Trump raised duties on Indian exports to 50% in August citing trade barriers and India’s continued buying of Russian oil. The Financial Times notes that only around 2% of India’s GDP depends on U.S. demand, and many exports (electronics and pharmaceuticals) remain exempt, producing an effective tariff rate of 33%–36%. Economists estimate the new tariffs might shave 0.6–0.8 percentage points from India’s growth
China tariffs: U.S.-China tariffs are complex and increasingly changing with overlapping measures. Reciprocal and product-specific tariffs make it difficult to determine which duties apply. Currently, there is a 20% tariff on fentanyl and a temporary 10% reciprocal tariff. In August, President Trump announced another 90-day pause on Chinese tariffs, extending into early November. Without this extension, U.S. duties on Chinese goods would have risen to 145%.
100 % tariffs on branded pharmaceuticals: In September 2025, President Trump announced a 100% tariff on patented and branded drugs, unless the manufacturer was building a plant in the U.S. Generic drugs (accounting for about 90% of U.S. drug volume) were exempt. The policy is intended to pressure foreign pharmaceutical companies to relocate production to the United States.
Section 301 Port Fees: Tariffs on Ships and Shipping
Beyond goods, the Trump administration has targeted the maritime sector using Section 301 of the Trade Act. Starting October 14, 2025, after a 180‑day phase‑in, U.S. Customs will levy fees on foreign‑built or Chinese‑owned/operated vessels calling at U.S. ports. The new scheme is a port call fee rather than a customs duty, with the objective to penalize China’s dominance in shipbuilding and shipping and revive U.S. shipyards.
Under the policy:
- Chinese‑owned or Chinese‑operated vessels must pay an initial fee of $50 per net tonne per port rotation. The fee escalates annually over three years, making it prohibitive and effectively excluding such ships from U.S. trades.
- Chinese‑built vessels owned by non-Chinese entities face a $18 per net tonne fee (or $120 per container) if no exemptions apply. These charges also rise yearly.
- Exemptions exist for voyages under 2,000 nautical miles, vessels under 55,000 dwt, ballast voyages, or U.S.-beneficially owned ships. Many smaller product tankers, chemical carriers and cargo ships will avoid fees, but large crude and container vessels will not.
- Administration and enforcement fall to U.S. Customs and Border Protection. Non‑payment may result in vessels being denied port entry.
Impact on the Global Fleet
Original port fee plans were scaled back from the first proposal announced in February. Clarkson Research Services estimates that, under the current version, about 7% of port calls would be subject to fees based on 2024 calling patterns, raising between $5–13 billion over the next three years. However, vessel redeployment is already reducing the number of ships likely to be affected, pushing the figure below the 7% threshold, CRS noted.
Analyses from shipping consultancies show that roughly 19% of the world tanker fleet above 25,000 dwt is Chinese‑owned or operated, while 22% is Chinese‑built. Newbuilding orders at Chinese yards account for 70% of tanker orders, indicating that a significant share of global tonnage could be subject to the fees in the future. In the container sector, leading carriers such as Maersk, MSC and CMA CGM have large numbers of Chinese‑built ships. Some of the 10,000‑plus-TEU vessels could face fees exceeding $1 million per port call.
Nearly 90% of imported refined products arrive on medium range tankers under 55,000 dwt, which are exempt from the fee. The largest impact will be on crude oil imports carried on very large crude carriers and Suezmax tankers, as these vessels exceed the size threshold and are often Chinese‑built or Chinese‑operated. These tankers will likely reposition to avoid U.S. trades. Chinese‑built or operated tankers could focus on Middle East Gulf-Asia and West Africa-Asia routes.
How Shipping Companies Are Responding to the Trump Tariffs
Fleet bifurcation is already evident. Chinese-connected tonnage arriving with cargo, rather than in ballast, has little choice but to avoid U.S. ports to escape fees. Major liners and tanker owners have begun re-routing vessels, with charter discounts reportedly hitting Chinese tonnage. Maersk and other carriers plan to exclude Chinese-built ships from U.S. services, redeploying them instead to Asia–Europe trades. Alliance partners are reorganizing loops to ensure only non-Chinese tonnage sails to the U.S., while some owners are restructuring ownership to qualify for the exemption tied to U.S. beneficial ownership—though definitions remain unclear.
Despite the measures, carriers continue to order ships from Chinese yards. A Center for Strategic & International Studies report found Chinese yards captured 53% of global orders between January and August 2025, citing cost advantages and limited alternatives. By contrast, U.S. yards build fewer than ten commercial ships annually, leaving little scope to shift orders domestically.
Market Dynamics Change Under Tariffs
Tariff-related agricultural trade flows are already impacting the dry bulk sector. China, the world’s largest buyer of soybeans, has not imported any U.S. soybean cargoes this season as tariff disputes halted exports. Instead, China has increased purchases from Argentina and Uruguay, with its commerce ministry citing the “imposition of unreasonable U.S. tariffs.” U.S. farmers are missing out on billions in sales during the key September–January season as trade talks remain stalled. China currently imposes a 23% tariff on U.S. shipments.
Stockpiling by U.S. retailers ahead of tariffs triggered a surge in containerized exports immediately after the November 2024 election, distorting normal seasonal freight patterns. This front-loading has fueled volatility in container freight rates throughout 2025. By September, U.S.-bound trade lanes were already experiencing significant declines as tariffs took full effect, according to shipowner group BIMCO, which forecast that North American import volumes would contract in 2025.
The decline in U.S. container imports could rank among the most significant in the container industry’s 60-year history, according to John McCown of the Center for Maritime Strategy. U.S. import volumes grew 15.2% in 2024, but McCown expects a year-on-year decline in 2025. He noted that the imposition of paused reciprocal tariffs on China in mid-November could trigger broader declines.
The ports of Los Angeles and Long Beach, through which Chinese imports flow, posted record container volumes during the Northern Hemisphere summer as retailers front-loaded shipments to avoid tariff hikes. July was the busiest month in the port’s history.
Mexico vs. China
Mexico announced steep tariffs on Chinese cars and other goods to appease Washington. In response, Beijing launched a sweeping investigation into Mexico’s tariffs, accusing the country of harming Chinese companies. Mexico’s heavy dependence on the U.S. — about 81% of its exports go there — makes it particularly vulnerable to U.S. demands. China has limited direct leverage over Mexico, importing just $5.7 billion from the country compared with $115 billion in exports, but it could retaliate through targeted restrictions or by limiting rare-earth exports.
Challenges and Uncertainties
The legal status of Trump’s tariffs remains unsettled. Appeals courts have ruled that several actions by the administration exceed statutory authority, and the Supreme Court is set to decide the issue in November. The IEEPA — the primary legal basis for port fees and some “Liberation Day” tariffs — was intended for emergencies such as sanctions, not broad trade policy. If the Court limits presidential authority, some tariffs may be rescinded; however, other statutes, including Sections 232, 201, 301, and 122, could be used to reimpose targeted duties after investigations.
Companies also face significant administrative burdens. Questions regarding leased vessels, time charters, and joint ventures remain unresolved. Carriers must track voyage distances, vessel deadweight, and beneficial ownership to determine exemptions, with noncompliance risking detention and penalties.
Mitigating Risk Under the Trump Tariffs
For shipping companies, freight forwarders, and policymakers navigating the Trump tariff regime, the challenge lies as much in compliance and planning as in economics.
Tracking vessel ownership, beneficial ownership structures, shipyard origins, and voyage patterns is now essential to avoid unexpected Section 301 port fees or secondary tariffs.
Windward’s Maritime AI™ Platform provides this clarity in real time. By fusing ownership structures, flag histories, and behavioral risk indicators into a single, model-driven view, the platform enables organizations to identify vessels with exposure, quantify the cost implications of rerouting, and anticipate shifts in trade flows before they materialize. To stay compliant with the new Trump tariffs, organizations must verify vessel registries, establish whether ships are foreign-built or Chinese-operated, validate bills of lading and certificates of origin, and track beneficial ownership across complex structures. Windward’s integrated models bring these checks together in one streamlined view, helping organizations maintain compliance while building the resilience to act quickly in a volatile trading environment.
Conclusion
Tariffs inevitably alter trade flows, while economists warn they can slow economic growth and job creation. The Trump tariffs represent one of the most sweeping overhauls of U.S. trade policy in decades, reviving tools not used for more than 90 years.
For seaborne freight and global trade actors, Section 301 port fees pose a unique challenge. These fees penalize Chinese-built or Chinese-operated vessels through escalating port charges, potentially reshaping fleet deployment and container shipping networks. While smaller tankers and feeder vessels may escape the fees, large tankers and mega-container ships face prohibitive costs. At the same time, carriers continue to order vessels from Chinese yards due to cost advantages and limited domestic alternatives, highlighting the difficulty of “decoupling” shipbuilding from China
The broader tariff regime has generated significant revenue, but the benefits are offset by higher costs for consumers and businesses, uncertainty for investors, and potential retaliation from trading partners. Courts may soon curtail the President’s authority to impose tariffs without congressional approval, injecting further uncertainty.
Even if the Supreme Court upholds the tariffs, shifting trade flows, administrative complexity, and political volatility will continue to challenge companies in seaborne freight.
