Did You Know That…

…More Trump trade deals spell more trouble for transpacific.
· US tariffs now average 20.2%, highest level since 1911, according to Budget Lab at Yale
· Tariffs in Asia, excluding China, appear headed towards 15%-20% range, up from the current 10% baseline
· More certainty on higher tariff levels after August 1 would have a negative effect on container demand as importers adjust to new reality.
Uncertainty is bad for trade, but so is certainty — if you are certain your cost of goods will be too high due to tariffs. Hopes the global baseline tariff would stay at 10% have been dashed as more trade frameworks are signed at higher levels.
 
…EVER SINCE President Donald Trump unveiled his Liberation Day tariffs in April, the world’s biggest trading relationship had been on the rocks. The European Union swung from trying to sweet-talk America into making a deal, to threatening retaliation. On July 27th dealmaking won out. At his golf course in Scotland the president and Ursula von der Leyen, the head of the European Commission, unveiled the outline of a preliminary trade agreement. The bloc has pulled off a tricky balancing act: making enough concessions to keep Mr Trump happy, while limiting the economic damage. Many of the details are still to be hammered out, but the agreement appears to contain three main elements. The first is a 15% tariff on most European exports to America, including, importantly, cars. The second is a list of goods that will face zero tariffs, from aircraft and chipmaking equipment to some chemicals and raw materials. And the third is a promise by the EU to buy more American fuel and AI chips, and to invest $600bn in America.

…EU-US deal averts trade war that could have crippled box volumes.
· US importers will pay 15% tariff on EU goods, up from 2% pre-Trump 2.0; higher costs are negative for future container volumes
· If agreement had not been reached, US importers would have been charged a 30% tariff and EU would have retaliated, a much more negative scenario for box flows
· EU agreement to purchase US energy set at unrealistically high level; higher energy flows to EU vs Asia are negative for bulk commodity shipping tonne-miles.
The new EU-US trade framework is not positive for shipping demand. While a trade war was averted, the resulting deal will hurt US importers of containerised goods and incentivise shorter-haul voyages for oil, LNG and coal.

…Trump announces 25% tarriff on India and unspecified penalties for buying Russian oil and arms. The United States will impose a 25% tariff on goods from India, plus an additional import tax because of India’s purchasing of Russian oil, President Donald Trump said Wednesday. The new tariffs were part of a flurry of trade activity that included a series of executive actions regarding Brazil, copper and shipments of goods worth less than $800, as well as a reduced 15% tax on imports from South Korea, including its autos. It was all a prelude to Friday when Trump’s new tariff regime is scheduled to start, an event the White House has portrayed as a testament to Trump’s negotiating skills even as concerns persist about the taxes hurting growth and increasing inflationary pressures. India “is our friend,” Trump said on his Truth Social platform announcing the taxes, but its tariffs on U.S. products “are far too high.”

…Trump extends Mexico’s 25% tariffs for 90 days as talks continue. President Donald Trump said he would not raise U.S. tariffs on Mexican goods beyond their current levels for 90 days. Trump recently threatened to raise the blanket tariff rate on Mexican imports to 30%. Trump also said that Mexico has “agreed to immediately terminate its Non Tariff Trade Barriers,” without specifying which.

…CMA CGM maintains box volume but US-China trade war weighs on margins.
· World’s third-largest containership operator moved 5.97m teu in the second quarter compared to 5.98m in the corresponding quarter of 2024
· Fall in Chinese exports to US were offset by strong growth in box volumes in other trade lanes
· Outlook for CMA CGM’s container shipping business is ‘extremely uncertain’ says chief financial officer Ramon Fernandez.
CMA CGM Group’s shipping division posted $8.2bn of revenues but ebitda was down 19.9% year on year to $1.6bn.

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…South-East Asia makes an AI power grab. No other region is as appealing to both America and China. When Lawrence Wong visited China on his first trip as Singapore’s prime minister in June, he delivered a warning: economic restrictions are futile in an interconnected world. The more one country imposes restrictions on others, Mr Wong said in Beijing, “the more it incentivises others to find alternative solutions and sources”. Many of those alternative solutions are in South-East Asia, which is becoming a vital arena in the global tech competition between America and China. Firms are motivated not just by the region’s 700m people, even though many of them are young and tech-savvy. South-East Asia’s proximity to China and other large economies (such as Australia, Japan and India) makes it an ideal base to serve global clients. 
 
…Pushed by Trump, pulled by China: Brazil's bold new rail freight gamble. A plan to link both coasts of South America with high-capacity cargo rail lines has gained a shot in the arm, one Brazil freight forwarder told The Loadstar, after recent vitriol over ownership of the Panama Canal.
 

…We are pleased to welcome our new member, Central Shipping in Ireland. Philip Clancy, the ceo, will be attending the next annual conference, from 24-27 March in Istanbul for meeting you in person.

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…Thailand and Cambodia Stepped Back From War, but Their Temple Fight Remains. Intense nationalism and disputed history — and maps — stoke the neighbors’ hostilities. Even a surge of international diplomacy has brought little hope of a lasting peace.

…Coca-Cola registered another decline in North America sales of its trademark drink, as health-conscious Americans seek alternatives to soda.

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.

Have a good weekend and Summer Holidays ahead !