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Why the Shipping Industry Isn’t Rushing Back to the Red Sea

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The companies that operate large container ships say they plan to keep going around Africa as violence flares in the region.When President Trump ordered military strikes last weekend against the Houthi militia in Yemen, he said the militia’s attacks on commercial shipping in the Red Sea had harmed global trade.“These relentless assaults have cost the U.S. and World Economy many BILLIONS of Dollars while, at the same time, putting innocent lives at risk,” he said on Truth Social.But getting shipping companies to return to the Red Sea and the Suez Canal could take many months and is likely to require more than airstrikes against the Houthis. For over a year, ocean carriers have overwhelmingly avoided the Red Sea, sending ships around Africa’s southern tip to get from Asia to Europe, a voyage that is some 3,500 nautical miles and 10 days longer.The shipping industry has largely adapted to the disruption, and has even profited from the surge in shipping rates after the Houthis began attacking commercial ships in late 2023 in support of Hamas in its war with Israel.Shipping executives say they do not plan to return to the Red Sea until there is a broad Middle East peace accord that includes the Houthis or a decisive defeat of the militia, which is backed by Iran.“It’s either a full degradation of their capabilities or there is some type of deal,” Vincent Clerc, the chief executive of Maersk, a shipping line based in Copenhagen, said in February.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Tariffs Could Help Tesla, by Hurting Its Rivals More

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    The electric car company led by Elon Musk builds all the cars it sells in the United States in California and Texas, shielding it from tariffs that could devastate competitors.As President Trump puts new tariffs on goods from China and threatens a trade war with allies like Mexico and Canada, one global company is likely to suffer less than most of its competitors: Tesla.But the electric car maker led by Elon Musk, which accounts for a third of the billionaire’s wealth, is also vulnerable if relations with China worsen. That country is the company’s second-largest market after the United States and it produces more cars there than anywhere else.Tesla has built largely self-sufficient supply chains in the United States and China, a rarity in a world of interconnected trade. As a result, the tariffs imposed by the Trump administration on Chinese goods, and the continuing threat to put them on Mexican and Canadian products, might help Tesla by hurting its competitors more.Although there is no evidence that Mr. Musk is shaping trade policies, the tariffs are one of several measures adopted by the Trump administration that may benefit Tesla at the expense of its rivals. On Wednesday, Mr. Trump paused 25 percent tariffs on most autos and parts made in Canada and Mexico, but the reprieve expires in a month, leaving automakers in the United States that depend on foreign supply chains in a state of uncertainty.The Tesla factory in Austin, Texas, in 2023. Cars produced here will be shielded from tariffs that will hurt Tesla competitors. Go Nakamura/ReutersThe administration is also trying to eliminate financial support for the construction of fast-charging stations for electric vehicles, a move that could handicap companies seeking to compete with Tesla’s extensive network. And it is attempting to cut or eliminate loans and subsidies that competitors like Ford Motor and Rivian are using to finance electric vehicle and battery factories.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Announces ‘Reciprocal’ Tariffs Across the Globe

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    President Trump on Thursday set in motion a plan for new tariffs on other countries globally, an ambitious move that could shatter the rules of global trading and is likely to set off furious negotiations.The president directed his advisers to come up with new tariff levels that take into account a range of trade barriers and other economic approaches adopted by America’s trading partners. That includes not only the tariffs that other countries charge the United States, but also the taxes they charge on foreign products, the subsidies they give their industries, their exchange rates, and other behaviors the president deems unfair.The president has said the step was necessary to even out America’s “unfair” relationships and stop other countries from taking advantage of the United States on trade. But he made clear that his ultimate goal was to force companies to bring their manufacturing back to the United States.“If you build your product in the United States, there are no tariffs,” he said during remarks in the Oval Office.Howard Lutnick, the president’s nominee for commerce secretary, said the measures could be ready as soon as April 2. He will oversee the plan along with Jamieson Greer, Mr. Trump’s pick for trade representative, if they both are confirmed to those posts, and other advisers.The decision to rework the tariffs that America charges on imported goods would represent a dramatic overhaul of the global trading system. For decades, the United States has set its tariff levels through negotiations at international trade bodies like the World Trade Organization.Import Taxes Around the WorldThe average tariff rate the United States charges for imports is relatively low compared with that of most other countries. In general, wealthier countries tend to levy lower tariffs than poorer ones. More

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    Trump’s Tariffs Would Reverse Decades of Integration Between U.S. and Mexico

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    Ties between the United States and Mexico have deepened over 30 years of free trade, creating both benefits and irritants.When Dennis Nixon started working at a regional bank in Laredo, Texas, in 1975, there was just a trickle of trade across the border with Mexico. Now, nearly a billion dollars of commerce and more than 15,000 trucks roll over the line every day just a quarter mile from his office, binding the economies of the United States and Mexico together.Laredo is America’s busiest port, and a conduit for car parts, gasoline, avocados and computers. “You cannot pick it apart anymore,” Mr. Nixon said of the U.S. and Mexican economies. Thirty years of economic integration under a free trade deal has created “interdependencies and relationships that you don’t always understand and measure, until something goes wrong,” he said.Now that something is looming: 25 percent tariffs on Mexican products, which President Trump plans to impose on Saturday as he looks to pressure the Mexican government to do more to curb illegal immigration. Mr. Trump is also expected to hit Canada with 25 percent levies and impose a 10 percent tax on Chinese imports.A longtime proponent of tariffs and a critic of free trade deals, Mr. Trump seems unafraid to upend America’s closest economic relationships. He is focusing on strengthening the border against illegal immigration and the flow of fentanyl, two areas that he spoke about often during his 2024 campaign.But the president has other beefs with Mexico, including the economic competition it poses for U.S. workers. The president and his supporters believe that imports of cars and steel from Mexico are weakening U.S. manufacturers. And they say the United States-Mexico-Canada Agreement, the trade deal Mr. Trump signed in 2020 to replace the North American Free Trade Agreement, needs to be updated — or perhaps, in some minds, scrapped.Many businesses say ties between the countries run deeper than most Americans realize, and policies like tariffs that seek to sever them would be painful. Of all the world’s major economic partners, the United States and Mexico are among the most integrated — linked by business, trade, tourism, familial ties, remittances and culture. It’s a closeness that at times generates discontent and efforts to distance the relationship, but also brings many benefits.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Ahead of Possible Tariffs, No Rush to Get Goods In From Canada and Mexico

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    Companies in the United States do not appear to be making a concerted effort to rush in shipments from Mexico and Canada ahead of the high tariffs that President Trump has threatened to impose on Saturday.Mr. Trump said after taking office that the United States would apply tariffs of 25 percent on imports from Canada and Mexico, contending that they were allowing “mass numbers of people to come in and fentanyl to come in.”The tariffs would raise the cost of imports significantly, especially since tariffs are not applied to most goods under the U.S.-Mexico-Canada Agreement, the trade deal that Mr. Trump signed in 2020. Canada and Mexico together account for 30 percent of U.S. trade. Many industries could be saddled with extra costs, including the vast auto operations that straddle the U.S. borders with Mexico and Canada.Mr. Trump could withdraw his threat or reduce the tariff if he decides Canada and Mexico are doing more to address his complaints, Howard Lutnick, the president’s nominee to lead the Commerce Department, suggested on Wednesday.With the tariff deadline near, some data shows higher freight volumes on road and rail, but the increases are not especially large, and transportation experts say rail and trucking companies have the capacity to cope. The situation, they said, is quite different from 2021 and 2022, when a deluge of imports overwhelmed supply chains, causing shipping costs to skyrocket and helping fuel a rapid acceleration of inflation.“The industry’s probably never been in a better spot to deal with significant changes in the marketplace,” said Scott Shannon, vice president of North America cross-border at C.H. Robinson, a freight forwarder.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trumps Threatens Tariffs Feb. 1 on Canada, Mexico and China

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    When President Trump did not follow through with his promise to immediately impose new tariffs on his first day in office, business executives and others who support international trade breathed a sigh of relief.That relief was short-lived. On Monday night, just hours after his inauguration speech, Mr. Trump said he planned to put a 25 percent tariff on products from Canada and Mexico beginning on Feb. 1, claiming that the countries were allowing “mass numbers of people and fentanyl” to come to the United States.On Tuesday evening, Mr. Trump said he would also put an additional 10 percent tariff on Chinese products by the same date, accusing China of sending fentanyl to Mexico and Canada, which was then crossing into the United States.Mr. Trump’s threats leave just 10 days before significant levies could go into effect on the United States’ three largest trading partners, a move that could throw American diplomatic relationships and global supply chains into disarray.Mexico, China and Canada account for more than a third of the goods and services that are imported to or bought from the United States, supporting tens of millions of American jobs. Together, the countries purchased more than $1 trillion of U.S. exports and provided nearly $1.5 trillion of goods and services to the United States in 2023, the last year government data is available.While tariffs have long been used by the United States as punishment for unfair trading practices, Mr. Trump’s first use of them is aimed at an entirely different outcome: tightening American borders against immigrants and illegal drugs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Port Workers Could Strike Again if No Deal Is Reached on Automation

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    Cargo could stop flowing at East and Gulf Coast ports, which handle most imports, if a union and an employers’ group can’t agree on the use of machines that can operate without humans.Ports on the East and Gulf Coasts could close next week if dockworkers and employers cannot overcome their big differences over the use of automated machines to move cargo.The International Longshoremen’s Association, the union that represents dockworkers, and the United States Maritime Alliance, the employers’ negotiating group, on Tuesday resumed in-person talks aimed at forging a new labor contract.After a short strike in October, the union and the alliance agreed on a 62 percent raise over six years for the longshoremen — and said they would try to work out other parts of the contract, including provisions governing automated technology, before Jan. 15.If they don’t have a deal by that date, ports that account for three-fifths of U.S. container shipments could shut, harming businesses that rely on imports and exports and providing an early test for the new Trump administration.“If there’s a strike, it will have a significant impact on the U.S. economy and the supply chain,” said Dennis Monts, chief commercial officer of PayCargo, a logistics payments platform.The union is resisting automation because it fears the loss of jobs at the ports. President-elect Donald J. Trump lent his support to the union’s position last month. “I’ve studied automation, and know just about everything there is to know about it,” he said on his website Truth Social. “The amount of money saved is nowhere near the distress, hurt, and harm it causes for American Workers, in this case, our Longshoremen.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Chinese Companies Have Sidestepped Trump’s Tariffs. They Could Do It Again.

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    The companies have found plenty of new channels to the U.S. market — demonstrating the potential limits of the tariffs Donald Trump has promised to impose.After President Donald J. Trump slapped tariffs on Chinese bicycles in 2018, Arnold Kamler, then the chief executive of the bike maker Kent International, saw a curious trend play out in the bicycle industry.Chinese bicycle factories moved their final manufacturing and assembly operations out of China, setting up new facilities in Taiwan, Vietnam, Malaysia, Cambodia and India. Using parts mostly from China, those companies made bicycles that they could export directly to the United States — without paying the 25 percent tariff had the bike been shipped straight from China.“The net effect of what’s going on with these tariffs is that Chinese factories in China are setting up Chinese factories in other countries,” said Mr. Kamler, whose company imports some bicycles from China and makes others at a South Carolina factory.Pushing those factories into other countries resulted in additional costs for companies and consumers, without increasing the amount of manufacturing in the United States, Mr. Kamler said. He said he had been forced to raise his prices several times as a result of the tariffs.“There’s no real gain here,” said Mr. Kamler, whose bikes are sold at Walmart and other retailers. “It’s very inflationary.”Arnold Kamler said he had to raise prices at Kent International several times as a result of President Donald J. Trump’s 2018 tariffs.Kate Thornton for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    With Trump Tariffs Looming, Businesses Try to ‘Run From a Moving Target’

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    Rick Muskat woke up the morning after the election with an urgent task. He got his agent in China on the phone at 4:30 a.m. Beijing time and pressed him to ask their factory how many more pairs of men’s dress shoes they could make before Chinese New Year, at the end of January.“I told them if they could make an additional 30,000 pairs, we would take that,” Mr. Muskat, the co-owner of a shoe company called Deer Stags, said on Thursday.The impetus was not a sudden jump in demand for shoes but the looming threat of steep tariffs on Chinese products. By stockpiling now, Mr. Muskat reckoned, his company could avoid at least some of the levies that President-elect Donald J. Trump has promised to impose when he takes office in January.“We’re going to take whatever they can make,” Mr. Muskat said.The election of Mr. Trump is already cascading through global supply chains, where companies are grappling with his promises to remake international trade by raising the tariffs the United States puts on foreign products. Mr. Trump has floated a variety of plans — including a 10 to 20 percent tax on most foreign products, and a 60 percent tariff on goods from China — that would raise the surcharge American importers pay to a level not seen in generations.Much remains unclear about his proposals, including which countries other than China would face tariffs, what products might be excluded and when they would take effect. But given Mr. Trump’s history of imposing taxes and the challenges those pose to global businesses that depend on moving products across borders, many executives are not waiting to see what he does.Some, like Mr. Muskat, are preparing to stock up their U.S. warehouses before tariffs might go into effect. Others have been accelerating plans to move out of China, reaching out to lobbyists and lawyers in Washington and calling board meetings to discuss what the tariff threats could mean for their businesses.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More