Trump Tariffs Transform Trade 

Has American President Donald Trump launched a trade war? How will his latest moves affect your organization? And what can you do to remain prepared for the coming impact on the global supply chain and changing trade routes?  

A Quick Recap

Things are changing so quickly, it’s hard to keep up! First, President Trump backed down Columbia with the threat of tariffs, getting the country to accept deportees.

Then on Saturday, “Trump declared an economic emergency in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada. Energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate. Trump’s order includes a mechanism to escalate the rates charged by the U.S. against retaliation by the other countries, raising the specter of an even more severe economic disruption,” according to The AP:  

Beyond policy debates and political maneuvering, the impact will be felt immediately across global shipping, supply chains, and commodity markets. The million dollar question: how can organizations remain ready and agile for the coming disruptions?

Will Tariffs Have a Severe Impact? 

The threat of tariffs represents a significant shift in U.S.-Colombia relations. The two countries previously had a free trade agreement that eliminated duties on most goods. New tariffs could have affected U.S. prices of various Colombian imports including coffee, flowers, and gas.

Approximately 1,300 vessels had ±14,000 port calls in the U.S. after calling Colombian ports in the past year, according to Windward’s Maritime AI™ platform. This is more than many people might suspect. 

Vessels varied: +420 bulk vessels, +240 container vessels, +90 oil/ chemical tankers, +80 crude oil tankers, +80 general cargo vessels, +80 vehicle carriers, etc. All types of trade and goods are bought and sold, so there is a widespread effect. 

The numbers are of course much larger for Canada and Mexico. Windward’s Maritime AI™ platform found more than 1,200 tankers that were involved in the Canada/Mexico –> U.S. energy trade routes, to give just one small example. These tankers called all relevant ports more than 19,500 times in the last year alone.

The Council on Foreign Relations summarizes the monumental reshaping of global trade that could take place due to tariffs: “Nearly half of all U.S. imports—more than $1.3 trillion—come from Canada, China, and Mexico. However, analysis by Bloomberg Economics shows that the new tariffs could reduce overall U.S. imports by 15 percent. While the Washington, DC-based Tax Foundation estimates that the tariffs will generate around $100 billion per year in extra federal tax revenue, they could also impose significant costs on the broader economy: disrupting supply chains, raising costs for businesses, eliminating hundreds of thousands of jobs, and ultimately driving up consumer prices.” 

The U.S. automotive, energy, and food sectors are predicted to be hit particularly hard. Gas prices could surge as much as 50 cents per gallon in the Midwest!

Global Shipping Routes Will Change Soon 

The tariffs are likely to prompt further shifts in manufacturing and sourcing strategies.

The maritime ecosystem will feel this impact almost immediately. Chinese ports such as Shanghai and Ningbo – currently among the busiest in the world – may see reduced U.S.-bound cargo volumes. Instead, alternative manufacturing hubs in Southeast Asia and India could experience growth. For example, Vietnam’s exports to the U.S. surged by 36% during the height of the U.S.-China trade war in 2019. A similar pattern is likely to repeat, further diversifying global shipping routes.

The geopolitical tensions between the U.S. and China have already prompted many Chinese manufacturers to establish plants in Mexico, basically turning Mexico into a huge transshipment hub to maintain China’s market presence in North America – but this latest announcement by President Trump nullifies this strategy. 

Trump’s tariffs are expected to accelerate supply chain diversification efforts, outside of Canada and Mexico. Companies reliant on China for manufacturing may increasingly look to “China+1” strategies, where production is distributed across multiple countries to mitigate risks. This strategy was more widely adapted pre-COVID. Diversification reduces vulnerability to geopolitical tensions, but it also introduces complexity. 

From a cost perspective, the tariffs are likely to raise shipping expenses, as longer routes and increased transshipments become necessary. For example, moving goods from Vietnam or India to the U.S. often requires additional transshipment points compared to direct shipping from China. These added layers increase costs, which may be passed on to consumers, worsening inflationary pressures.

Freightos lead analyst Judah Levine was quoted by Loadstar: “In 2018, then-president Trump’s tariff announcements led to a doubling of freight rates as shippers rushed to move goods ahead of increased costs…tariff announcements have historically altered the timing of shipments.” 

Your Next Move

Columbia’s concession to U.S. power likely convinced many in the U.S. administration as to the effectiveness of threatening and enacting tariffs. 

“(Columbia’s backtracking) is also likely to embolden administration officials who see tariff threats not simply as a traditional device in trade disputes but as a tool to intimidate other nations, including longtime US allies, across a broader set of issues,” according to an article in CNN. 

If this is indeed the start of a new trade war and tariffs will be used to set foreign policy, we can expect shipping routes to change frequently, stressing the global supply chain. 

Windward Can Help!

Freight forwarders, importers, and exporters require immediate visibility into how port congestion will evolve, with accurate ETA predictions and a way to automate detention and demurrage charges. 

Traders and shippers need to ensure that they maintain their compliance and risk mitigation standards and strategies in the midst of all of this turmoil and volatility. 

And bunkering companies will want to know where the new hot spots are, as shipping and trade routes quickly evolve. 

Windward can help! Our platform leverages the power of AI to keep leading organizations ahead. Our new Early Detection solution provides the foresight needed to stay ahead of evolving risks, boost global trade resilience, fortify supply chains, streamline operations, and grow ROI.

In an unpredictable trading ecosystem, real-time intelligence is essential. Windward’s Maritime AI™ platform offers unparalleled visibility into trade flows, port congestion, and evolving risks, helping businesses stay ahead of disruptions.

Freight forwarders, importers, and exporters need accurate ETA predictions and to optimize detention & demurrage management, to minimize costs.

Traders and shippers must ensure they remain compliant, while mitigating risk in an increasingly volatile trade environment.

Bunkering companies must track shifting trade routes to identify emerging refueling hubs and capitalize on new market opportunities.

With Windward’s Early Detection solution, businesses gain the foresight needed to navigate trade uncertainty, enhance supply chain resilience, and optimize operations in real time.

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