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The tariff tally

Trump has imposed tariffs on steel and aluminum shipments of export cargo and import cargo in international trade.

The tariff tally

A lot has been happening of late in the news regarding trade and tariffs resulting from the ongoing trade war between the US and its partners. It appears that the focus is more exclusively on China as negotiations with other partners are starting to result in new deals.

Here is a summary of some of the recent events, and the associated impact on ocean freight, that are helping to shape the trade landscape:

As recently reported in the Business Insider by reporter Bob Bryan, $16 billion in proposed tariffs on Chinese goods were placed into effect by the United States. Another $200 billion is being contemplated against Chinese goods for the next round of tariffs. [Editor’s note: The $200 billion has since been imposed.]

To mitigate the effect of the ongoing trade disputes with foreign buyers, the Wall Street Journal’s Jesse Newman and Heather Hadden report that the White House has said it will pay $4.7 billion to US farmers to offset agricultural losses.

In the Nikkei Asia Review, it is being reported that the ongoing trade war is having a heavier toll on global supply chains as countries and companies seek to avoid paying increased tariffs aimed at countries such as China. In instances where “companies make products and components exported to a third country, like the US,” businesses are seeking to minimize their exposure when such products and components come from countries directly targeted by America. Such an example is occurring in Japan, which is starting to find other sources of supply to avoid Beijing-focused tariffs. As such, an industry to pay attention to will be the auto industry, where it was reported that “the US also is considering a blanket duty on cars and auto parts, forcing companies to rethink their supply chains.”

National Public Radio’s John Ydstie reports that Mexico and the US have reached a new deal on NAFTA, but both countries still have to work with Canada to finalize the agreement.

Given all that is continuing to happen, it is no wonder that we are seeing ocean freight rates increase on the spot market. In the past several months, rates from China to the US have increased significantly–rising to their highest level since February 2017.

However, closer inspection shows that the trade war is not the only cause for the increased prices. For example, carriers are pulling containers off of trade routes, consolidating lines, and there are increasing bunker rates as a result of increasing fuel prices. This means that keeping an eye on news events that show dramatic changes in company supply chains; carrier-driven adjustments to accommodate the evolving trade landscape between the US and its trading partners; and successful negotiations between the US and its trading partners to put new trade deals in place will highlight the true nature of rate changes in the international ocean freight industry.

Mario Bruendel, the CEO of XportForwarding, an online ocean freight booking tool, is a leader in international shipping with 20 years of industry experience.

Rates are increasing for ocean shipments of export cargo and import cargo in international trade.

Tariffs & Price Hikes: A Summer of Consequences

Hopefully you have been paying close attention to the whirlwind of activities that are occurring or are about to occur in the coming weeks. July has shaped up to be a month of consequence for the international shipping industry on many fronts. International tariffs, increasing spot rates, and rising bunker fuel prices are examples of some of the activities playing out that will impact importing and exporting activities around the globe.

Tariffs. Companies with global supply chains will be especially hit (particularly those that own their parts manufacturing facilities overseas that import finished goods back into the US). The Wall Street Journal reports that closed loop supply chains will also be hit hard as US companies brace for retaliatory tariffs on US exports.

Spot rates. reports that “Asia-North Europe ocean carriers are looking to hike container shipping rates by up to $500 per teu from 1 July, as space availability begins to tighten.” Interestingly, these general rate increases (GRIs) come as proposed spot rates have fallen due to postponed bunker surcharge increases because companies don’t want to cede business to competitors. The coming weeks will shed more light on the state of the market as bunker rates are set to still increase, tariffs go into effect, and July marks the start of peak season.

We see rates increasing across the board to key ports of call around the globe. Will this stay the case long term? It is hard to say as there is still capacity in the market on some routes and competitive forces are still in play. No matter what, we can be assured that with the start of July, GRIs are expected to go into effect. As the effects of these GRIs are negotiated with carriers, we will find out if prices really do go up or not.

Rising bunker fuel prices has led to increased bunker rates beginning June 1, 2018. On July 1, many of the largest carriers implemented an additional “emergency bunker surcharge” (EBS) that increased carrier rates for all US exports.

This EBS is driven in part by: decreased oil production in Venezuela due to political instability; Iran’s decline in oil sales due to tough new sanctions being applied by the US; and the lack of oil export increases by Saudi Arabia and Russia, setting the stage for increased crude prices worldwide.

At, we will continue to monitor, track and provide insights to these current events that will affect market rates for shipping cargo. Through our “value rate” pricing index, we work to minimize the impact of any price increase that shippers might experience.

Mario Bruendel is CEO of, an ocean freight booking company. With 20 years of international shipping experience, he has strategically consulted with scores of businesses to help them grow internationally.

To see the impact of the EBS on the Xport Value Rate pricing index, go to and perform unlimited free searches to identify new pricing between your favorite ports. Check pricing often as rates will be incrementally updated across the index as Xport negotiates new rates with carriers.