AFPM ’25: Shippers weigh tariffs, port charges on global supply chains

HOUSTON (ICIS)–Whether it is dealing with on-again, off-again tariffs, new charges at US ports for carriers with China-flagged vessels in their fleets, or booking passage through the Panama Canal, participants at this year’s International Petrochemical Conference (IPC) have plenty to talk about.

Last year, shippers were dealing with tight global capacity after carriers began avoiding the Suez Canal because of attacks on commercial vessels by Houthi rebels, the possibility of labor issues at US Gulf and East Coast ports, and fewer slots for passage through the Panama Canal as that region dealt with a severe drought.

But 2025 has brought a new series of challenges that will keep logistics and supply chain professionals busy.

TARIFFS
The US has imposed tariffs of 25% on most imports from Canada and Mexico, effective 4 March, but US President Donald Trump said last week that tariffs on goods from Mexico and Canada that are compliant with the USMCA free trade agreement will be exempt until 2 April.

It is unclear what shifts in trade flows will be seen once tariffs are fully implemented, but analysts at Dutch banking and financial services corporation ING still expect global trade to see solid growth amid trade tensions, geopolitical risks and economic nationalism.

ING expects trade in goods to grow by 2.5% year on year in 2025, driven by heavy front-loading in the first quarter and increased intra-continental trade throughout the year.

“While it is true that some countries heavily depend on the US market, such as Canada and Mexico, global trade is far more diverse and does not solely revolve around the United States,” ING said.

According to the World Integrated Trade Solution (WITS) data, which contains trade data among 122 countries, the US accounts for 13.6% of total global exports.

Additionally, the reliance on raw materials and critical intermediate products that cannot be substituted, as well as new alliances and potential trade deals speak for continued trade in goods.

STRATEGIES FOR ADAPTATION
Chemical distributor GreenChem Industries offered suggestions that chemical companies could implement to mitigate the effects of tariffs.

These include finding new sources for raw materials in regions with favorable trade agreements, modifying transportation routes and methods to lower costs and enhance efficiency, discovering more affordable chemical alternatives that maintain quality, reevaluating trade agreements to secure more competitive pricing, and investigating the potential for manufacturing within strategic markets to avoid extra costs.

USTR HEARING ON NEW PORT CHARGES
The office of the US Trade Representative (USTR) is accepting public comment on proposed actions against Chinese-owned ships after a Section 301 investigation determined China’s acts, policies and practices to be unreasonable and to burden or restrict US commerce.

The proposal includes proposed service fees of up to $1.5 million per US port call for vessels built in China, and up to $1 million per port call for China-based operators.

USTR is now accepting public comment and will hold a public hearing on the proposed actions on 24 March.

Some market players feel the proposal is aimed at container ships, but a broker in the liquid chemical tanker space said that if the text of the prosed action remains unchanged, the China-built tankers comprising the fleets of shipping majors Stolt and Odjfell could be targeted.

As of now, the proposal would include all commercial vessels calling on US ports.

The West Gulf Maritime Association (WGMA) said that currently, there is not enough US inventory to meet the demand for maritime transport nor has the USTR suggested plans for meeting the projected demands.

There is also not enough shipbuilding capacity within the US to construct the required hulls.

Based on the draft executive order, the USTR will have no more than 180 days to implement the port fee collection program.

The WGMA intends to individually and collectively submit comments against the proposed policy as written with recommendations, and they strongly encourage all shipping companies and vessel operators do the same through any means available to them.

LIQUID CHEMICAL TANKERS
Trade data from 2024 shows that about 25% of US liquid bulk exports and 21% of imports were carried on Chinese-built vessels, which will particularly impact the specialty chemical, vegetable oils and renewable fuels sectors.

The fees would mean increasing the number of exports on US-flagged vessels and, given the limited existing US-flagged chemical tanker fleet, this will make any shortfall difficult to make up.

Typically, it will take 24-36 months for construction of these type of specialized vessels, therefore the industry will face significant challenges in the meantime.

These significant increases would most likely lead to a few different scenarios such as substantial rate increases, fewer port calls and potential supply chain disruptions for US manufacturers relying on specialty chemical imports.

As a result, most owners and charterers are taking a wait and see approach while looking for longer term solutions.

Liquid tanker spot rates hit their highest over the past decade in 2025 but have fallen from the peaks, according to ICIS pricing history.

The following chart shows rates over the past year on the US Gulf-Asia trade route.

CONTAINER RATES
Rates for shipping containers from east Asia and China to the US have fallen considerable this year as capacity adjusted to diversions away from the Suez Canal and as newly built vessels entered the market.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said that the combination of a seasonal slump in demand and the possible end of frontloading ahead of tariffs likely drove the sharp fall in transpacific ocean rates recently.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.

They also transport liquid chemicals in isotanks.

PANAMA CANAL
Because of a severe drought that lowered levels in the freshwater lake that serves the Panama Canal, the Panama Canal Authority (PCA) was forced to limit daily crossings for the first time in its history.

The drought was in part brought about because of the El Nino weather phenomenon, which contributes to less rainfall, especially during what is the typical rainy season.

But weather patterns have shifted to La Nina, which brings increased rains and have helped levels at Gatun Lake approach capacity.

Gabriel Mariscal, agency business manager at port service provider CB Fenton & Co, said the situation at the Panama Canal is completely different from a year ago.

“We are not expecting to have any restrictions this year in regard to transit,” Mariscal told ICIS. “In fact, during a normal summer season, perhaps there could be a draft restriction at the Neopanamax locks, but I think that this year that will not be the case.”

Mariscal said the PCA is updating regulations for customer rankings.

Customer rankings consider the volumes a shipper moved through the canal over the previous 12 months, as well as the number of tolls they have paid.

For example, if there are 10 slots for passage on a given day, and the PCA receives 20 requests for those slots, the higher-ranking customers will get priority.

If a shipper is unable to book a slot in the first period (90 days before passage) or the second booking period (14 days before passage) then they go to the auction, where the highest bidder wins.

Container shipping companies Maersk and MSC are the highest two ranked customers at present. Mariscal said Maersk has at least three vessels that transit the canal each day.

PANAMA TENSIONS WITH US
Mariscal said that the new presidential administration under Trump has caused some stress for the central American country.

Because of this, he expects extreme care to be taken by the PCA when announcing new rules or regulations so as not to increase tensions.

Trump surprised some shortly after his inauguration when he said that the US should reclaim the Panama Canal.

A US congressman has since introduced a bill that would authorize the purchase of the Panama Canal.

Trump threatened to reclaim the canal if Panama did not take immediate steps to curb what Trump called China’s influence and control over the vital waterway.

Panama’s president said in early February the country will not renew its agreement with China’s Belt and Road Initiative (BRI) after a visit from US Secretary of State Marco Rubio.

Then, last week a consortium led by private equity firm BlackRock agreed to pay $22.8 billion for port terminal operations from Hutchison Port Holdings (HPH), which includes terminals in Panama.

It was Hong Kong-listed CK Hutchison’s ownership of the ports at both entrances to the canal that likely concerned Trump.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas.

Visit the US tariffs, policy – impact on chemicals and energy topic page

Visit the Macroeconomics: Impact on chemicals topic page

Visit the Logistics: Impact on chemicals and energy topic page

Focus article by Adam Yanelli

Additional reporting by Kevin Callahan

Thumbnail image shows a container ship passing through the Panama Canal. Courtesy the Panama Canal Authority