BIMCO says U.S. tariffs on steel and aluminum will impact not only ships carrying those products but the general container trade.
Peter Sand, BIMCO’s chief shipping analyst, said with the United States “now firing shots against long-term allies in something which could soon become a full-blown trade war … not only is this affecting the seaborne shipment of steel and aluminium, but the retaliation from EU will also affect the transatlantic container trade.”
He said BIMCO recently reported that the United States imported a total of 32 million tonnes of the specific tariffed aluminium and steel commodities via the sea in 2017. The EU, Canada and Mexico were responsible for exporting 8 million tonnes, equivalent to 160 Handymax loads (ships with carrying capacity of around 50,000 DWTs).
While Germany is the main European steel and aluminium exporter to the United States of the targeted commodities by sea, he said Mexico and Canada also move some steel and aluminum to the U.S. by water. Of the targeted commodities, Mexico moved 1.3 million tonnes by sea and 2 million by land and Canada moved 1.2 million tonnes by water and 7.5 million tonnes by land.
Sand noted that already “the looming trade war between the U.S. and China … has caused a lot of disorder especially for the soya bean trade.
“From a wider perspective, the effect of an escalating trade war may derail the current global upswing, which is at its highest point since 2011 and expected to continue,” he said. “This will have cascading effects on shipping demand as a whole.”
Sand wrote last week that container shipping was “off to bumpy start” this year because “demand is growing strongly into the U.S. while import growth into Europe from the Far East is critically low.”
“Overcapacity is still around, and growth on high-volume trades is essential,” he added.
Meanwhile, a recent note by Panjiva, S&P Global Market Intelligence said the top 10 products most likely to be hit from European retaliation this year are: whiskey, large motorcycles, iron ore, eye makeup, corn, aluminum alloy plates, yachts, motorboats, nuts of iron ore and steel and manicure and pedicure preparations.