Tariffs pose risks to shipping industry

The spring of 2025 is an uneasy time for businesses, especially those operating in the shipping industry. In April, US President Trump announced global tariffs that impact some 100 countries with increases ranging from 10% to as much as 50% on top of previously existing tariffs 

The 14 trillion USD ocean shipping industry (REUTERS) was side swiped by changes directly impacting their business environment. With little time and minimal guidance to incorporate changes to comply with the new tariffs, some companies are immediately feeling the impact. For example, just days after the announcement, some businesses are pausing the loading of cargo in fear of the levies that may be imposed on goods upon their arrival in U.S. ports. At the same time, according to Reuters, the U.S. Customs and Border Protection Agency was “scrambling to reprogram and test systems needed to calculate and collect new tariffs.” 

Over the following months since the tariffs were announced, there have been many changes and updates, which continues to cause uncertainty in global markets. 

Considering the constantly shifting and unpredictable environment, it makes sense to capture the potential harm and outcomes these new tariffs can, and have caused, within the global shipping industry. 

Insurer insights

According to Tuomas Kiihamäki, Head of Cargo Underwriting and Risk Management, “We have learned that tariffs have unintended economic consequences. In the U.S. - China trade war, tariffs disrupted established supply chains, led to higher costs for businesses and consumers and forced many to bear additional expenses or reconsider their sourcing approach, and business needs to ensure that this it handled and taken care of in their insurance solutions.  

Tuomas Kiihamäki highlights that insurers also find themselves in a unique environment compared to just a few years ago. “To stay ahead, we need to become even more adaptive. Tariffs are increasing unpredictability with trade routes, cargo values and the broader risk landscape. There is a need for tailored underwriting and closer collaboration with between business and their insurers to navigate challenges together.” 

“In If, we are prepared and ready to go into dialogue with businesses to support them in the changing environment securing that they have proper insurance coverage,” Tuomas notes. 

Tuomas Kiihamäki, Head of Cargo Underwriting
Tuomas Kiihamäki, Head of Cargo Underwriting and Risk Management

The glass is still half full

“Our view is that we are likely to see peaks in port congestion over the upcoming months. Businesses will try to maximize revenues in fluctuating tariff conditions. But it is as important to understand that reality can change quickly. We might have a very different truth already next week,” Tuomas comments. 

“As said, we all need to acknowledge that we are living in a very different world than just a few years ago. Global shipping is entering a new era, where digitization and sustainability have now been joined by new companions of volatility and geopolitical power games.” 

He summarizes, “We will most likely continue to see logistics automation and pressure of lowering emissions but also regionalized trade and a growing need to adapt sourcing strategies quickly. Geopolitical tensions like the US-China rivalry and volatility in the Red Sea will continue to test supply chains, clients and insurers.”  

Tuomas concludes that, “For us the glass is still half full, we have the knowledge and tools to support our clients in this increasingly uncertain world and take the lead in further enabling secure trade.” 

Sources:
Trump's reciprocal tariff plan amplifies risk of ocean shipping chaos, executives say | Reuters
How do tariffs work, and who will they impact? UChicago experts explain | University of Chicago News