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【SMM Analysis】US Reciprocal Tariffs, Shipping Suffers Heavy Blows, Green Methanol Application Temporarily Suspended, Global Decarbonization Further Delayed
Apr 09, 2025, at 5:37 pm
On April 2, 2025, US President Trump signed an executive order announcing the implementation of a "reciprocal tariff" policy, marking a significant shift in US trade policy. This move caused widespread distress in global financial and trade markets. Alongside the collapse of global financial markets, there was also a substantial impact on the real economy.
The hydrogen energy industry chain, due to its relatively small scale and the fact that domestic products are mostly imported from the US, appeared to be less affected in the short term. However, in the long run, the large shipping industry, which is the largest purchaser of green methanol, faced significant disruptions to its operations. Green methanol procurement projects were put on hold, and global economic instability further delayed decarbonization schedules. "When survival is at stake, decarbonization becomes less important," said a shipping company.
On April 2, 2025, US President Trump signed an executive order announcing the implementation of the "reciprocal tariff" policy, marking a significant shift in US trade policy. This move sent shockwaves through global financial and trade markets, accompanied by the collapse of global financial markets and a substantial impact on the real economy. The hydrogen energy industry chain, due to its relatively small scale and the fact that domestic products are mostly imported from the US, is expected to experience minimal short-term effects. However, in the long term, the large shipping industry, as the largest purchaser of green methanol, will see its operations significantly affected, leading to the suspension of green methanol procurement projects. Additionally, global economic instability will further delay decarbonization schedules. "When survival is at stake, decarbonization becomes less important," said a shipping company. This article analyzes the impact of these tariffs on the shipping industry and the global decarbonization agenda.
I. Details of the Trump Administration's Hefty Tariff Policy in April 2025
On April 2, 2025, US President Trump signed an executive order announcing the implementation of the "reciprocal tariff" policy, marking a significant shift in US trade policy. The core elements of this policy include:
1. Benchmark Tariff
Starting April 5, 2025, the US will impose a 10% benchmark tariff on all imported goods from all countries. This tariff applies globally, but certain goods such as semiconductors, pharmaceuticals, and timber (538 categories) are exempt.
2. Differentiated Surtax
Starting April 9, 2025, the US will implement a differentiated surtax on 60 countries and regions with significant trade deficits with the US. Specific rates are as follows:
China: 34% surtax, total tariff reaching 44%.
EU: 20% surtax, total tariff reaching 30%.
Japan: 24% surtax, total tariff reaching 34%.
Vietnam: 46% surtax, total tariff reaching 56%.
India: 26% surtax, total tariff reaching 36%.
3. Exemption Clauses
Despite the broad implementation of the tariff policy, certain goods are exempt, including semiconductors, pharmaceuticals, and timber (538 categories). Additionally, some goods under the USMCA framework for Canada and Mexico maintain zero tariffs.
4. Strategic Intent
The Trump administration claims that this tariff policy aims to reduce the US trade deficit, protect domestic industries and employment, and increase fiscal revenue. However, this policy has triggered strong global reactions and trade tensions.
II. Tariffs' Significant Impact on the Shipping Industry
1. Decline in Shipping Market Rates
In April 2025, global shipping market rates generally declined. Due to increased trade uncertainty caused by the tariff policy, cargo transportation demand was suppressed, leading to a significant drop in shipping market rates. For example, daily rates in the dry bulk shipping market fell from $20,000 at the beginning of the year to $15,000, a 25% decrease.
2. Fuel Price Volatility
The tariff policy has heightened global economic uncertainty, leading to increased fuel price volatility. Shipping companies face uncertainty in fuel costs, further increasing operational risks. For instance, in April 2025, international oil prices fluctuated by over 10% within a week, imposing significant cost pressure on shipping companies.
3. Supply Chain Disruption Risks
The tariff policy has caused global supply chain chaos, with many companies adjusting their supply chain layouts and reducing reliance on the US market. This has left shipping companies facing dual pressures of reduced cargo volumes and route adjustments. For example, some cargo originally destined for the US has been diverted to other markets, forcing shipping companies to replan transportation routes.
III. Shipping Companies Overwhelmed, Green Methanol Applications Delayed
1. Maersk's Dilemma
As one of the world's largest shipping companies, Maersk noted in its April 2025 market outlook that Trump's tariff policy has significantly impacted the stable development of the shipping industry. Maersk originally planned to increase investment in and application of green methanol fuel in 2025, but due to market uncertainty caused by the tariff policy, the company had to focus on addressing short-term operational challenges.
2. Challenges in Green Methanol Application
Green methanol, as a low-carbon fuel, is considered a key pathway for the shipping industry to achieve decarbonization goals. However, the April 2025 tariff policy has left shipping companies facing significant cost pressures and market uncertainty, leading to the suspension of green methanol application plans. For example, Maersk originally planned to invest $1 billion in 2025 for green methanol fuel R&D and infrastructure construction, but this plan has been postponed due to the tariff policy.
3. Industry Confidence Dented
The trade tensions triggered by the tariff policy have severely dented confidence in the shipping industry. Many shipping companies are cautious about future market prospects, reducing investments in new technologies and new energy. For instance, in April 2025, the global shipping industry's investment confidence index fell by 20%, reflecting industry concerns about future development.
IV. US Hefty Tariffs Disrupt Global Trade, Hinder Economic Growth, and Temporarily Halt Global Decarbonization
1. Reshaping the Global Trade Landscape
The US's indiscriminate tariff policy has triggered significant adjustments in the global trade landscape. Many countries and regions have adopted retaliatory tariff measures, further exacerbating trade tensions. For example, China imposed a 34% tariff on US imports starting April 10, 2025, and the EU also imposed hefty tariffs on certain US goods. This escalation of trade protectionism has plunged the global trade system into chaos, severely challenging the multilateral trade system.
2. Slowing Global Economic Growth
The tariff policy has significantly increased global trade costs, with companies facing higher operational costs and market demand uncertainty. The IMF predicts that global economic growth in 2025 will decline by 1.3 percentage points due to trade friction. Additionally, the US economy itself is expected to be impacted, with GDP growth declining by 1.3% and PCE inflation rising by 1.9%, leading to a "stagflation" dilemma.
3. Global Decarbonization Process Hindered
The shipping industry is a crucial part of global decarbonization efforts, and the application of low-carbon fuels like green methanol is a key pathway for the industry's decarbonization. However, the April 2025 tariff policy has left shipping companies facing significant cost pressures and market uncertainty, leading to the suspension of green methanol application plans. This not only affects the shipping industry's decarbonization process but also negatively impacts the achievement of global decarbonization goals.
4. Future Outlook
The US tariff policy has triggered profound changes in the global trade system, with far-reaching impacts on the shipping industry and global decarbonization efforts. In the short term, shipping companies need to address challenges posed by rising costs and market uncertainty, and the application plans for low-carbon fuels like green methanol may be further delayed. In the long term, the global trade system needs to be readjusted and restructured to adapt to the new trade landscape. Meanwhile, countries need to strengthen cooperation to jointly address climate change and decarbonization challenges.
Written by: SMM Hydrogen Energy Analyst—Xin Shi—13515219405 (WeChat same)
