The Trump tariffs begun this year -- particularly those on steel -- are beginning to take a toll on shipbuilding and port upgrades, an industry expert says.
"We've seen steel prices jump up 20% to 25% in this country," Matthew Thomas, a maritime lawyer with law firm Blank Rome, said today at Marine Money's annual Ship Finance Forum in New York City.
"That has had a direct impact on US shipbuilding, depending on hedging strategies ... certainly on Gulf region shipbuilders and also impact on infrastructure investment."
He said the tariffs are also hurting the containership sector as the US-China trade war puts higher manufacturing costs on boxed goods, causing a slowdown in volume.
"The container sector really depends upon long-lead supply chains" that cannot quickly move to other sources for commodities, he said.
Thomas underlined his point with Maersk's expected 0.5% to 2% slide in box volumes for 2019 and 2020.
"That's a significant hit for the container sector," he said.
The good news, he said, is that the Trump administration has begun talks to roll back tariffs with Chinese and Argentinian officials, seeing how they are hurting trade markets.
"I think the administration's resolve for a hard line on the Chinese is starting to wane," he said.
"At least in some corridors of the White House there is discussion on how to back out of this confrontational stance with China, if there is a graceful way to back out."
