Shipping sensitive to trade tariffs

Jason Maloney For Agri-View

With a trade war underway between the United States and the rest of the world, the effect on shipping has been marked. International trade routes are changing. Some ports have become extremely busy while others, especially some secondary ports, have seen the number of ship visits dwindle. Much like the disruptions caused by the recent COVID pandemic, trade-war disruptions are making changes as they ripple through the world of shipping.

The main ammunition of the trade war consists mainly of tariffs and fees. Tariffs are taxes on goods imported into a nation. Those taxes on imported goods are paid by companies importing the goods and are usually passed on to consumers. The only alternative importers have to passing on tariff taxes to consumers is laying off employees or suspending parts of their business to maintain their margin of profit. When our government reports money flowing into the treasury from tariffs, that money is a tax paid by businesses that import goods and by consumers who buy the goods.

Fees are being imposed by the United States on foreign-built ships docking in U.S. ports starting in October. The fees are intended to stimulate domestic production of ships. But modern ships are expensive and often take years to build. The rules regarding fees, much like U.S. tariffs, are in a state of flux. But when imposed, the fees will increase costs for shipping goods into the United States.

Recent trade agreements between the United States and several nations have been announced, but none have been finalized. Some agreements include promises of foreign investment in the United States. Wisconsin residents may recall the foreign company Foxconn, which proposed a project that initially was said would bring thousands of jobs to the state. The terms of the Foxconn agreement were never met and only a small fraction of the jobs appeared.

Other trade agreements promise possible future purchases of energy from the United States, including liquefied natural gas. But there is only one U.S.-flagged ship that can carry liquefied natural gas, and it was made in a foreign country. So shipping of liquefied natural gas on that ship will be subject to docking fees, if the fees are actually imposed. So like tariffs and fees, trade agreements are a work in progress that will cause changes in shipping for the foreseeable future. And like the Foxconn proposal, promises of future investments and purchases may or may not really happen.

This season Wisconsin’s seaports are reporting a decrease in shipping. Through June the Port of Duluth – which includes Superior, Wisconsin – reported fewer U.S.-flagged ships, fewer Canadian-flagged ships and fewer oversees vessels visiting the port. By the end of June, there had been 219 vessels docked in Duluth and Superior compared to 238 at the same time the previous year. Total short tons of cargo passing through the port through the end of June were about 9 million, compared to 9.7 million short tons at the same time in 2024.

CHS Inc. announced in July that it plans to close the largest grain terminal in the port, located at 41 Dock St. in Superior. The closure will result in the loss of 23 jobs.

The Port of Green Bay reported a total of 32 vessels visiting the port by the end of June, a decrease from 30 ships in 2024. The port reported a total of more than 355,000 metric tons of cargo passing through the port by the end of June, a decrease from more than 635,000 metric tons at the same time the previous year.

The Port of Milwaukee has not reported shipping figures for the year, but did report that a decrease in cruise-ship visits and visitors was expected. In 2024 the port had a total of 372 ship visits that included 236 barges and 27 cruise ships. Port Milwaukee reported about 2.2 million metric tons of cargo passing through the port in 2024.

Rail traffic in the United States has fluctuated this year in response to the changes in trade and tariffs. By July, total carloads averaged 224,568 per week. With tariffs on many goods from most nations starting in early August, the effect tariffs will have on rail traffic remains to be seen. If there is less to ship due to a dampening of the overall economy, fewer carloads will be shipped by rail. Economic statistics released by the federal government in recent weeks have indicated that fewer jobs are being created and unemployment is increasing. Inflation has also continued to increase, causing a notable increase in prices for many types of goods.

Barge traffic on the Mississippi River System continued to move through July and early August. Though overall barge traffic may decrease, barge shipments remain very important to the movement of agricultural commodities such as grain and fertilizer. Visit agtransport.usda.gov/stories/s/Barge-Dashboard/965a-yzgy/ for more information.

Shipping, like much of human existence, continues to change in response to weather, climate, international relations and other factors that are unpredictable. The trade war that began this year is becoming a major factor influencing shipping. With large storms, both in terms of weather and international relations, accurate predictions for shipping trends for the rest of 2025 will be difficult to make.

Information for this story was gathered from AP sources.

This is an original article written for Agri-View, a Lee Enterprises agricultural publication based in Madison, Wisconsin. Visit AgriView.com for more information.