The eagerly awaited official framework for the EU-U.S. trade truce has been released, signaling a halt in the escalating tensions that have burdened trans-Atlantic trade, and should help steady container flows, said forwarder Kuehne & Nagel.
While not yet legally enforceable, the agreement maintains the 15% tariff on most European Union exports to the U.S. and the 27.5% duty on automobiles. These tariffs will remain in place until Brussels implements reciprocal tariff reductions on a wide array of American industrial and agricultural products.
For container shipping, the implications are significant but nuanced, said Paolo Montrone, global head of trade, Sea Logistics, for Swiss-based K&N (OTC: KHNGY).
“In the near term, cargo flows on core EU–U.S. lanes should stabilize, particularly for pharmaceuticals, industrial goods, and agricultural commodities spared from further escalation,” Montrone wrote in a note to customers. “This could bring more predictable volumes to carriers serving the North Europe–U.S. East Coast and Gulf routes.”
However, Montrone said a delay in car tariff reductions continues to strain automotive exports, a key driver of high-value westbound cargo.
European car exports to the U.S. dropped 16.8% decline in the first six months of this year from 2024. Germany is the largest European exporter to the U.S., totaling $34.9 billion in vehicles and parts in 2024
It’s also an open question how higher landed costs of EU goods will affect U.S. consumer demand.
“If price sensitivity drives a shift toward more affordable options, where such options exist, domestic or Asian suppliers may gain ground. This could lead to a plateau or even a decline in westbound volumes, particularly in consumer-driven segments such as food, wine, and mid-tier manufactured goods,” he said.
The forwarder’s overall container volumes increased by about 2% in the first half of this year from 2024, but EU to U.S. demand was relatively flat due to currency and tariff effects.
More extensive negotiations aimed at a comprehensive agreement covering standards, digital regulations, and market access could further reshape trade patterns and foster growth, Montrone said. Until then, carriers must contend with a market characterized by policy unpredictability and swift tariff adjustments. This necessitates flexible capacity planning to ensure services remain aligned with fluctuating demand.
Find more articles by Stuart Chirls here.
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