New tariffs and threats cast shadow on trans-Pacific

If Trump goes through with his newest threat, Alphaliner warns eastbound trans-Pacific volume will fall at least 8 percent in 2019 after rising 8.3 percent in 2018. Photo credit: Shutterstock.com.

If Trump goes through with his newest threat, Alphaliner warns eastbound trans-Pacific volume will fall at least 8 percent in 2019 after rising 8.3 percent in 2018. Photo credit: Shutterstock.com.

The sharp and sudden escalation of trade tensions between the United States and China, after a deal seemed imminent, casts a shadow on trans-Pacific containerized supply chains, elevating risk for carriers after exhibiting newfound strength in recently concluded service contracting.

Before May 5, when President Donald Trump announced that tariffs on $200 billion of Chinese imports would rise from 10 to 25 percent, carriers were relatively sanguine about 2019 and for good reasons. The contract season was well-timed for carriers, coming in the aftermath of the front-loading of volumes and resulting market tightness ahead of threatened Dec. 31 tariffs on China.