The four-year Russia-Ukraine war stalemate persists, while escalating US-EU tensions linked to the US attempt to purchase Greenland have triggered retaliatory tariffs and market disruptions. Europe's imposition of tariffs and restrictions worth EUR93 billion (US$107.95 billion) on US companies is contributing to a sharp decline in global shipping indexes.
The global shipping market, already strained by oversupply heading into 2026, faced new challenges after Denmark's Maersk, the world's second-largest shipping company, announced it would resume Red Sea routes through the Suez Canal following a two-year pause. This decision immediately pressured container shipping rates downward. The tariff conflict between the US and the EU over Greenland further clouds the outlook for maritime trade.
The US position on Greenland hinges on intelligence suggesting risks of Chinese and Russian encroachment. If credible, this might have allowed scope for negotiation. However, absent solid evidence, the US approach mirrors Israel's preemptive tactics, provoking strong European backlash. In response, the EU activated its Anti-Coercion Instrument (ACI) to restrict US firms' activities. Major cloud providers, including Google, Microsoft, and Amazon Web Services, face potential disruption across European markets.
Starting January 8, 2025, freight rates from Shanghai to several global ports, including Genoa, New York, Los Angeles, and Rotterdam, began to decline sharply. Maersk's return to traditional routes via the Suez Canal reduces transit times and increases vessel utilization, expanding supply amid shrinking demand caused by the tariff dispute. Other carriers are expected to follow suit, signaling a further slide in international container shipping rates.
US-EU relations have become increasingly unpredictable against this geopolitical backdrop. Concurrently, China's exports to the US have notably decreased, reflecting shifting supply chain dynamics. In contrast, intra-Southeast Asian trade and exports to the US display growth. Despite these trends, weak consumer confidence continues to constrain China's domestic market, underscoring its reliance on export-driven growth. Observers remain focused on developments in China's shipping export demand as a key economic indicator.
Article edited by Jerry Chen
