Americas News
INSIGHT: Will Trump's America First Affect Maritime?
The return of Donald Trump to the White House is bringing a fresh wave of 'America First' policies, many of which could have significant consequences for global trade and the maritime sector.
As the US looks inward and presses forward with policies that prioritize its interests, the maritime industry could be looking at a few changes.
Larry Messina, Managing Director of our Florida office, outlines a few ways in which shipowners, fuel suppliers and maritime stakeholders could be affected.
Please note that the information in this article is accurate as of the publication date but may change over time.
It's Tariff Time
The new administration's tariff policy is likely to be the biggest change in the near term. The US has imposed 10% tariffs on imports from China and has proposed 25% tariffs on goods from Canada and Mexico, albeit with a 30-day delay while further negotiations are held. Tariffs on imports from European Union countries have also been discussed.
There may be some shifts in global trade, with some companies forced to rethink supply chains to cut their exposure to the new levies.
Firms may move production closer to the US or find alternative sources, altering demand patterns and requiring the shipping industry to adapt.
In the short term, experts predict that import costs could rise, and shipping might slow down a bit as countries build up inventories.
Automakers shipping vehicles and parts from Mexico to the US could also see a decline in demand, which would hit the shipping volumes in that segment. On the flip side, there might be a boost for the tanker sector, particularly for LNG, as the US ramps up oil and gas exports.
While bunker prices might dip a bit, demand is still expected to hold strong. The key factor here is the surge in US LNG and crude oil exports, which should keep the market stable. That export growth will likely create new opportunities and maintain strong demand for bunkers.
Tariffs on Canada and Mexico – if they still go ahead after the current 30-day delay – may have an impact on bunker supply in the US.
Mexican product took up about a third of US fuel oil imports over the past two years, with much of this oil ending up in the US Gulf bunker market. And the 4 million b/d of Canadian crude oil that the US typically imports comes with a high fuel oil yield, meaning domestic fuel oil production may take a hit if US refiners are forced to replace some of this feedstock with lighter oil from elsewhere.
A Decarbonization Detour?
Another area for the shipping and bunker industries to keep an eye on will be environmental policy, with the new administration likely to consider this a lower priority.
Under current US policy, the adoption of biofuel blends might take a bit longer, since there aren't any federal mandates for renewable fuels, and participation is still voluntary. Without federal subsidies to help offset costs, biofuels may remain more expensive, which could make it a slower transition for some shipowners in the US as they consider renewable energy options.
The decision to withdraw from the Paris Agreement and ramp up oil and gas production also makes it unlikely that the US will press particularly hard for progress on the decarbonization agenda at the IMO. The question will be whether this results in the US taking a neutral stance at the IMO, or actively campaigning against carbon taxation for shipping and seeking to persuade other member states to vote likewise.
Conclusion
Changes in tariff strategies, shifts in trade routes and slowed decarbonization are just a few of the issues that maritime stakeholders need to keep an eye on.
It is an ever-changing situation, with news headlines emerging nearly every day. Reach out to the Florida office of Glander International Bunkering to navigate all the changes to come.
Our team is here to help you stay ahead of the curve and adapt to any new policies.
