MW Tariffs, Trump and China: What 2025 holds for shipping stocks
By James Rogers
The shipping industry enters 2025 with tariffs on the horizon as President-elect Donald Trump prepares to take office
The shipping industry is entering 2025 with tariffs on the horizon. China, in particular, is expected to be targeted by President-elect Donald Trump when he takes office. The industry is prepared.
"President Trump's Administration promises to usher in a new trade and tariff regime," Stifel analyst J. Bruce Chan wrote in a recent note, adding that there is still uncertainty about what policies and proposals will stick. "As such, it's difficult to assess the ultimate impact to the freight transportation industry.
"Prima facie, we believe tariffs are a drag on freight demand, effectively resulting in higher costs for shippers that are generally passed on to end consumers over time," Chan added.
The President-elect has been particularly vocal about China tariffs. During his election campaign, Donald Trump proposed a 60% tariff on Chinese imports. In a post on his Truth Social network on Nov. 25, he also said that he would also impose a 10% tariff on goods from China because he said there was an illegal flow of drugs, particularly fentanyl, into the U.S. "Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America," he wrote.
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New tariffs on China would inevitably be felt in the shipment of goods across the Pacific.
"Because almost all trans-Pacific trade moves over the ocean, we believe ocean container shipping will see the largest direct impact," Chan wrote. "But for shippers and retailers, there is no cheaper way to move goods than over the ocean, so there are few modal alternatives if production remains in Asia.
"We see the most risk for maritime shipping, with containers and dry bulk being more acute, with more insulation for oil and gas tankers," the analyst added.
Danish container shipping giant A.P. Moeller-Maersk (DK:MAERSK.A) (DK:MAERSK.B) has acknowledged the looming prospect of new tariffs, noting that many economies are preparing for protectionism while companies are prepared to operate within new tariff regimes. "Companies are already trying to understand how these new tariffs and upcoming regulations will affect them, in revenue, cost and profit margin," William Petty, Global Product Development Manager for Custom Consulting Services at Maersk, said in a recent post on the Maersk website. He added that "the overall universe of tariffs will be more complicated, with enforcement agencies likely to be more active in checking whether certain goods have really come from the country that is stated by the importer." Petty also pointed to potential opportunities, with companies having to seek support from logistics providers.
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U.S.-traded container shipping stock ZIM Integrated Shipping Services Ltd. $(ZIM)$ is down 14.2% in 2025. Shares of Costamare Inc. (CMRE) and Global Ship Lease Inc. $(GSL)$, which lease ships to container shipping companies, are down 0.6%, and up 2.4%, respectively. Costamare also provides dry bulk vessels for charter.
Shares of Golden Ocean Group Ltd. $(GOGL)$, which owns and operates dry bulk vessels, are up 3% this year, while Star Bulk Carriers Corp. (SBLK) shares are up 1.3%. Pangaea Logistics Solutions Ltd. (PANL), which operates a fleet of bulk carriers, is up 3.9%, and New York City-based dry bulk ship owner Genco Shipping and Trading Ltd. $(GNK)$ is up 4.5%.
Sanctions are also a feature of 2025, reflecting geopolitical tensions. Last week, tanker owners received a late Christmas gift from the U.S. Treasury and the Biden administration, according to Stifel analyst Benjamin Nolan, who pointed to the latest round of sanctions against Russia's energy sector. The sanctions identify 183 vessels as "blocked property."
"While there were already some sanctions in place, the new sanctions on the specific vessels are expected to have a much more profound impact and likely result in significantly less Russia crude exports," Stifel's Nolan wrote in a recent note. "The ships were responsible for more than 1.4 million barrels per day of Russian exports and more than 40% of the seaborne trade," he added, noting that virtually all of this volume was transported to China and India.
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"The absence of the 183 sanctioned tankers from competition, would drive up utilization particularly for VLCC [Very Large Crude Carrier] from the Middle East in our view," Nolan wrote.
Stifel has hold ratings for crude oil tanker stocks DHT Holdings Inc. $(DHT)$, and International Seaways Inc. (INSW). DHT Holdings' stock is up 18.1% in 2025, and International Seaways' stock is up 13.2%. Stifel has a price target of $11 for DHT Holdings and a target of $49 for International Seaways. The analyst firm has a price target of $66 for Scorpio Tankers.
The analyst firm also has a hold rating and $66 price target for Scorpio Tankers Inc. (STNG), which transports refined-petroleum products such as gasoline, diesel, jet fuel and naphtha, and has a stake in DHT Holdings. Scorpio Tankers' stock is up 10.8% in 2025.
B. Riley Securities analyst Liam Burke says that liquefied-natural-gas $(LNG)$ carriers could see near-term pressure in 2025 as projects in the LNG industry get pushed back. "Some of the [LNG] projects that were supposed to come online in 25 and 26 have moved out to 27," he told MarketWatch, adding that the LNG-carrier industry is also busy "recycling," or breaking down, ships that have come to the end of their operational life. Some eight vessels were recycled in 2024, he said, and the pace of ship recycling is expected to increase. This process paves the way for more efficient, larger vessels in companies' fleets.
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With delayed LNG projects, the affected carriers have been re-assigning vessels to the spot market, the analyst said. The spot market refers to LNG delivered within three months of the transaction date.
LNG carriers Cool Co. Ltd. $(CLCO)$ and Flex Ltd. $(FLEX)$ are more affected by this than Capital Clean Energy Carriers Corp. (CCEC), according to Burke, who notes that all of the latter's vessels are under longer-term contract.
Cool Co. shares are up 8% in 2025, while Flex is up 4.1% and Capital Clean Energy Carriers is up 0.5%.
However, the delayed LNG projects are "not going to be a surprise to anybody," said Burke, who notes that affected carriers "understand and are prepared for the situation." Additionally, he expects to see carriers' fleets benefit from the current "recycling" effort. "We will see the fleet beginning to approach equilibrium as we approach 2027," he said.
-James Rogers
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January 14, 2025 10:17 ET (15:17 GMT)
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