Whipsaw policies weigh on project pipeline
Global markets were thrown into disarray on April 2 after the USA announced sweeping new import tariffs – a move the president hailed as “Liberation Day”. Financial shockwaves quickly rippled across supply chains, amplified by mixed messages from Washington over whether the tariffs would be permanent fixtures or bargaining tools. Container bookings between China and the USA reportedly plummeted by as much as 60 percent within days.
On April 9, just hours after implementing reciprocal tariffs on all trading partners, president Trump backtracked, suspending them for 90 days. China, however, faced no such reprieve: duties on Chinese imports surged to an eye-watering 145 percent. The initial 10 percent blanket tariffs announced on April 2 remain in place, along with the separate 25 percent levies targeting steel and autos. China swiftly countered with tariffs of its own.
This future course of trade policy now hinges on a fraught 12-week negotiation window – a critical juncture that will likely define the global economic landscape well into 2025. As a key exporter of heavy cargoes and a leading shipbuilding nation, China’s role in the project logistics supply chain is pivotal. Some relief emerged on April 17 when the USTR rolled back the most punitive tariffs on China-built ships, notably sparing many multipurpose vessels. Various carve-outs protecting some critical sectors have been agreed and signs of further softening came on April 23, when Mr Trump hinted that additional tariff reductions on Chinese goods could be on the table – though he made it clear they would not be eliminated entirely.
The heavy lift and multipurpose shipping sector appears to be more shielded from the immediate effects of rapid-fire policy shifts when compared to other modes, given the long lead times on projects and the difficulty/impossibility of switching to alternative suppliers. Most projects in the execution stages will press on but longer term, the picture becomes hazy. Nevertheless, the majority of those spoken to for this issue of HLPFI have been sanguine on the prospects.
This issue includes analysis from a number of the key markets affected by the USA’s whipsaw policy shifts. Our China report (pp102-106) delves into the country’s ultra-long-term industrial strategy, how it could stimulate its economy this year to negate the worst of the economic shocks, and how it’s leveraging its role as the world’s largest bilateral development partner.
In Mexico and Central America (pp74-84), we report on a constantly evolving project logistics business, with nearshoring continuing at pace and energy diversification driving new infrastructure projects against a backdrop of US tariff rises.
Our annual report on the Canadian market (pp32-38) is also included in this issue. With the country at the polls as this issue went to press, relations with its southern neighbour have been at a historic low. However, the project logistics sector is resilient, with massive LNG projects under way, the mining industry buoyant, and federal laws passed that will see it enter the offshore wind energy arena just as the USA turns its back on that sector.
We also bring insights from the Balkan Peninsula (Europe’s best-kept secret), Spain, Portugal and Germany, as well as deep dives on the latest happenings in the civil engineering and heavy-duty trailer markets, plus a great deal more – including our annual Ships and Shipping Lines supplement.
David Kershaw,
Editor
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