Since early 2018, the U.S.  international trade policy has focused on increasing tariffs for many goods that are imported into the country.

This new plan has shaken the foundations of international trade, and many people are wondering what effect tariffs and trade wars will have on international shipping.

Some economists claim that consumers will be more inclined to purchase U.S.-made goods when imposing tariffs on foreign imports, but other experts are skeptical.

Another goal to reach with this strategy is to increase the demand for local jobs and boost the economy, but is this realistic?  In contrast to these measures, other countries have responded by placing their own tariffs on goods that are imported from the US to their countries.

What is a Trade War?

When countries try to attack each other’s trade by imposing taxes and quotas, a trade war usually ensues.

Trade wars usually begin when a country raises tariffs, which is a type of tax that is imposed on goods that are imported from one country to another. When these types of increased tariffs are imposed, the country who feels the brunt of the increased tariffs usually respond with a tit-for-tat escalation. This conflict ultimately leads to hurting economies in other nations as well as increased political tensions between the two or more countries.

Shipping companies operating in China,, as well as Chinese shipping companies like Costco have all been affected by the recent tariff war. Since certain tariffs have already been imposed along with possible plans for further action, the U.S.continues to impose tariffs from Chinese imports.

When it comes to the current trade war existing right now, it is more important than ever to find the right key players who can help you avoid any obstacles related to any imposed tariffs that may affect your business.

Joe Barry, CEO of CAF Worldwide explains, “Tough questions still remain: Will we see a second front-loading push before the next round of tariffs? How will supply chains mitigate tariff-related pitfalls? Will the 25% duties on Chinese goods ever even come to fruition?

These are the mysteries plaguing forwarders and the shipping industry at large. The truth is, we are just as much in the dark about the future of tariffs now as we were in October, and we can expect a lot of the same uncertainty in 2019.

We may not have all the answers, but what we do have is a wealth of strategic knowledge derived from decades of experience tackling every freight forwarding difficulty head-on, and a dedicated network of preferred partners who have our backs as staunchly as we have theirs.”

CAF Worldwide is an industry leader in freight forwarding since 1982.

Looming trade wars means you have to choose the right customs broker, logistics manager, and supply chain manager who can help you navigate through any obstacles caused by the current trade war. For instance,there is an alternative for companies to operate out of free trade zones.  These are regions regarded as being outside of U.S. Customs and Border Control Protection.

Since there is no decision on the matter by U.S. Customs, companies with zone status will be able to avoid any new tariffs that are imposed. Currently, there are about 200 foreign trade zones located in the US and right now those companies have a major competitive advantage as a result of the current trade war.

A New Industry For Shipping?

When people hear the term “trade war,” there are usually negative connotations associated with it, but it can sometimes create a boost in domestic shipping.

When there is an increased reliance on domestic goods, the country will also have to find more improved methods for transporting products across the country.

This effect could create a whole new industry for shipping which will directly affect roles in trade, such as a customs broker, logistics manager, and supply chain manager, among others. Jobs in the shipping and logistics industry should also see an increase in demand.

Trade War And The Impact On Maritime Shipping

Since maritime shipping accounts for 4/5 of all trade, this industry will be impacted the most. In terms of volume, the dry bulk shipping industry takes the biggest hit by Chinese tariffs. By imposing tariffs on goods imported from China that are worth over $200 billion, over 85% of US imports by sea to China will be affected, while over 58% of goods imported from China to the U.S. will be affected.