By Martina Kao    Photo：CANVA

I. Trump’s tariff storm and huge changes in the economic and trade market

President Trump’s recent adjustment of tariffs on Canadian steel and aluminum imports is having a profound impact on the global economic and political situation. These policy changes have triggered sharp market volatility, undermined investor confidence, and may pose a threat to a soft landing for the U.S. economy.

Changes in tariff policies and their market impact

President Trump announced that he would increase tariffs on Canadian steel and aluminum imports to 25%, a decision that caused a sharp drop in the stock market. The S&P 500 index was close to correction territory, while the Dow Jones and Nasdaq also saw notable declines. This market turmoil reflects investors' concerns about trade policy uncertainty and could have a negative impact on global economic stability.

Decline in investor confidence

President Trump's erratic trade policies, particularly increased tariffs on Canadian steel and aluminum imports, have shaken investor confidence. Global stock markets fell, the VIX index rose, the US dollar weakened, and gold prices rose, indicating that investors turned to safe-haven assets. Economists warn that these policies could pose risks to global economic stability, leading to lower demand and higher inflation.

The threat of a soft landing for the US economy

Wall Street is increasingly concerned that Trump's policies could undermine efforts to achieve a soft landing for the U.S. economy. Trade uncertainty and the risk of a possible recession have focused on implementing tariffs to boost U.S. economic growth. However, the moves have sparked market turmoil, with major stock indexes falling sharply. Analysts worry that these trade policies could lead to a recession and stand in stark contrast to the president's claims of economic growth.

Geopolitical risks: Taiwan, the South China Sea, logistics challenges in emerging markets

• Situation in the Taiwan Strait: If U.S.-China relations remain tense, Taiwan, as the core of the global semiconductor supply chain, Not sure if there will be tougher export controls.

• Red Sea and South China Sea shipping safety issues: Recent piracy and political instability in the Red Sea region have affected shipping safety and may lead to changes in shipping routes and increase transportation costs in the future.

• The Russian-Ukrainian war affects global logistics: Russia’s energy exports are restricted, leading to higher shipping costs and affecting trade momentum between the European and Asian markets.

II. Shipping Market Trends and Forecasts in 2025

1. Trade barriers increase and global freight demand slows

The United States' increase in tariffs on imports from major trading partners such as China, Canada and Mexico will directly affect international freight volumes. Companies may choose to reduce exports to the US market and instead explore other markets, resulting in reduced demand for trans-Pacific freight routes and affecting container shipping volumes on the Asia-US route.

• Impacted routes: As demand for Asia-America routes declines, transatlantic and Latin American routes may become new options for companies looking for alternative markets.

• Alternative markets: Regional trade activities such as Europe, Southeast Asia and the Middle East may increase, and ASEAN countries in particular may benefit from supply chain shifts.

2. Freight rates fluctuate dramatically, and the market enters a period of adjustment

The uncertainty of tariff policies has made companies more cautious in their import and export decisions, which may lead to greater volatility in freight rates in the shipping market. Based on recent market trends, here are the possible impacts:

• Short term (first half of 2025): As importers and exporters try to get their goods out before the new tariffs take effect, there may be a temporary increase in container demand, pushing up freight rates.

• Medium term (second half of 2025): As the market adjusts to the new tariff environment, if the US economy slows and consumption declines, freight demand may decline, leading to lower freight rates.

• Long term (after 2026): Companies adjust their supply chain strategies and regional shipping demand increases, which may lead to higher intra-regional freight rates, while intercontinental trade routes face greater pressure.

3. Supply chain restructuring, regional shipping benefits

American companies are considering shortening their supply chains to reduce their dependence on Chinese manufacturing, which will lead to the rise of Southeast Asia and India: Vietnam, Thailand, Indonesia and other countries may become new manufacturing centers, promote the growth of intra-Southeast Asian trade, and benefit shipping within the Asian region.

According to market trends, the following directions are worth paying attention to:

• Electronics industry: Technology giants such as Apple and Samsung are accelerating the establishment of factories in India and Southeast Asia to reduce their dependence on the Chinese supply chain.

• Manufacturing: Vietnam and Indonesia have become new manufacturing hotspots, with some Chinese companies moving their factories abroad to avoid tariff barriers.

• Shipping logistics: Southeast Asian ports are developing rapidly, such as Singapore and Malaysia, becoming new trade transit points.

4. Adjustment of ship deployment and change of shipping company strategy

As market demand changes, major shipping companies may redeploy vessel resources and adjust route layout:

• Large shipping companies: May reduce capacity on the Asia-US route and instead increase capacity on the Asia-Europe, Asia-Middle East or intra-regional routes.

• Small and medium-sized shipping companies: may focus on regional shipping markets, such as intra-Southeast Asian routes and coastal trade in the Americas, to fill market gaps.

• Alliance cooperation: Closer cooperation between shipping companies may emerge, such as large shipping companies may adjust their capacity to adapt to market changes.

Conclusion: The shipping market is undergoing changes, and flexible response is the key

Overall, the shipping market in 2025 will be profoundly affected by Trump’s tariff policy, and the global trade pattern and supply chain model will change. Companies should pay close attention to market changes, consider regionalized supply chains, reduce dependence on a single market, and flexibly adjust strategies in order to seize opportunities in a changing situation

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