Letter from the Editor

“ Broader escalatory tensions with China , coupled with an emboldened Trump administration , promise an even more volatile second term .”

By Mark Szakonyi

Even before starting his second term , Donald Trump gave the shipping industry a taste of the unpredictability he will inject over the next four years , first by upending longshore labor contract negotiations and then threatening to take over the Panama Canal .

Upon taking office Jan . 20 , Trump surprised again by holding back on his widely anticipated threat to slap higher tariffs on Chinese goods on his first day back in the White House . Still , he pledged tariffs were on the way and a 25 % tariff on goods coming from Canada and Mexico could come as soon as Feb . 1 .

The tariffs Trump implemented against China during his first four years in office brought some unpredictability to the shipping industry . Section 301 tariffs hit US importers , who frontloaded cargo as they could beat deadlines for the tariffs , and ultimately , shifted even more manufacturing out of China .

Closer to home , Trump injected himself into negotiations between the International Longshoremen ’ s Association and United States Maritime Alliance ( USMX ) when he publicly backed the union ’ s opposition to automation . With that reality hanging over the contract talks , the major carriers and terminal operators that comprise the USMX knew they would only risk the new president ’ s ire if they dug in on the automation question and a second longshore strike occurred as a result .

Trump ’ s support of prohibitions on automation at marine terminals surprised the shipping industry , as it defied the conventions of traditional Republican support for corporations over unions , Peter Friedmann , executive director of the Agriculture Transportation Coalition , said at a shipping conference in December .

“ It is simply unprecedented , at least for the last 200 years , for a president so obviously making the policy objectives and decisions on his own , seemingly without input by staff and the federal bureaucracy , and certainly without deference to them ,” said Friedmann , who added that the Trump administration was rushing into policy changes rather than coasting the first three months like other new administrations .

Trump wasted little time in elevating Louis Sola from commissioner to chairman of the Federal Maritime Commission ( FMC ) just hours after taking the oath of office on Monday . Joe Biden only tapped Daniel Maffei for the chairman role after three months in office .

Trump ’ s threat to take back the Panama Canal over “ ridiculous , highly unfair ” fees may not ultimately result in US troops swooping in like the 1989 US invasion to depose Panamanian military leader Manuel Noriega . But it speaks to the president wanting to expand regional control , whether it ’ s in Greenland — or even more improbably , Canada — to limit Chinese and Russian influence in the Western Hemisphere . In November 2024 , China-based Cosco Shipping opened a $ 1.3 billion mega-terminal in Peru . Cosco created the terminal — a major gateway for the Pacific Coast of South America — in a joint venture with Peruvian miner Volcan , which is owned by Argentina-based Integra Capital .

Hutchison Port Holdings , also based in China , operates a port on each side of the Panama Canal . On the day of Trump ’ s inauguration , during which he accused China of “ operating the critical waterway ,” the Panamanian government posted a video on X showing inspectors heading to begin an audit at Hutchison ’ s local offices , seemingly a move to placate Trump . The Panama Canal Authority , a government agency , has operated and managed the canal since the United States returned full oversight to the country in 1999 .

The container shipping industry is second only to the semiconductor industry in the economic and military struggle between China and the United States , said Carl Bentzel , a former FMC commissioner and now president of the National Association of Waterfront Employers . That fuels bipartisan support for shoring up US maritime capacities — ranging from ambitious legislation to expand the US-flag commercial fleet to the Biden administration warning that Chinese-built cranes at US ports pose a cyberthreat , Bentzel told the Journal of Commerce . The US Department of Defense on Jan . 7 published its annual listing of companies that it determines are tied to the Chinese military , revealing the addition of Cosco Shipping . While the designation prevents the US government from contracting with the ocean carrier , it has no impact on Cosco ’ s ability to serve the US commercial market .

The Biden administration announced on Jan . 15 that China was manipulating market policies and practices to support its shipbuilding and shipping equipment production . While an FMC commissioner , Bentzel highlighted China ’ s dominance in the manufacturing of chassis and containers .

“ This is the first time I have seen such an alignment against China ’ s maritime dominance ,” Bentzel , a Hill veteran who was senior counsel to the Senate ’ s transportation and commerce committee , including on maritime policy , said Jan . 15 . “ I ’ ve never seen this in my entire career .”

email : mark . szakonyi @ spglobal . com

4 Journal of Commerce | February 3 , 2025 www . joc . com