Proposed US car tariffs will hit container lines and car carrier owners if implemented in the second quarter.
This is according to shipping consultancy Drewry.
“In our analysis we assume tariffs will be imposed in the second quarter (mid-May) and that US importers will start passing extra costs to consumers and supply chain stakeholders by the fourth quarter,” said Neil Davidson, Drewry’s senior analyst for ports and terminals.
“We also assume some US importers will absorb all or part of the extra cost, while others will delay their decision and that some foreign finished vehicle producers may lower their prices to protect sales.”
The study explored the impact of three different tariff scenarios; a low-intensity scenario with 5% tariffs imposed on all US imports of finished vehicles and auto parts, a medium- intensity scenario at 15% and a high-intensity scenario at 25% tariffs.
Drewry found that volumes are likely to be hit, particularly between 2020 and 2021.
Baltimore, Los Angeles/Long Beach and New York/New Jersey are the US ports most exposed.
Japan has 67% of the eastbound finished vehicle imports trade, while China is most exposed to the auto parts tariffs, holding a 61% market share.
Germany exposed
In westbound lanes, Germany is the sourcing country most exposed to the Trump tariffs as it holds 63% of the westbound finished vehicle imports trade, and 78% of the auto parts market, Drewry said.
It added that an over-tonnaged car carrier sector is "particularly vulnerable and will naturally be negatively affected."
It is also concerned that the US action will trigger a retaliatory move by the European Union.
“Any imposition of US tariffs on European cars and auto parts would represent a significant escalation of transatlantic tensions between the US and the EU and given the importance of these commodities could lead to a serious escalation,” said Drewry’s director of research products Martin Dixon.
“Such a situation would have an even more severe impact on trade flows on transatlantic trade routes with ominous consequences for a global maritime industry already grappling with over-capacity, rising operating costs and new regulatory compliance.”
