Interview with Lars Jensen: Is the US becoming more isolated from global trade?

The Trump Administration's tariff policies are convincing more and more US trading partners that the United States is involved in a global trade war and that the best response is to find other countries to buy and sell from, according to Lars Jensen, Principal, Vespucci Maritime, based in Copenhagen, Denmark.

Jensen spoke to AJOT at the Intermodal Association of North America (IANA) Expo taking place in Long Beach, California where he said that after traveling and speaking with experts from around the world in 2025, he has come to a conclusion of where international trade with the US is going, “Initially when Trump was elected and we saw the beginnings of the trade war [and] mostly I came across the view, ‘What are they up to in the US? Followed by, ‘Okay, fine, how can we fix this? How can we plan for this? How can we work with this?’ But as the trade policies became more erratic, that view changed. What I see basically across the world is a realization that it is unlikely this is going to change in the US any time soon, and this [isolationist stand] could last beyond three and a half years. Because…Trump was elected once. He was elected twice. There’s a strong movement behind him. So, there’s not much faith… That means what I’ve seen in the last few months is that the focus from a vast majority of countries is that their big companies have shifted. The focus is on you as a company seeking growth in the future in trade; you’re just going to spend your efforts on how [I] can increase my trade with 192 countries that are not the United States. Not that I want to get rid of trade with the US. I absolutely don’t. I don’t see anyone who wants to reduce their trade with the US. But all their efforts and future growth are focused on increasing growth with everybody else, both at the company level and at the government level in terms of what trade deals you are pursuing.”

China, the US, and the World

The biggest beneficiary of US mistakes is China, which now has a free hand to expand its reach and is doing so aggressively in Africa. Africa has the potential for growth and China sees the continent’s potential: “I think a good example of that, which very much flew under the radar, happened in July when China announced they were reducing tariffs to 0% for every one of the 53 African countries. Now granted, a lot of cargo that goes from Africa to China is raw materials that China controls anyhow…but not all of it. And if you look at container volumes, one of the largest growing trade lanes is import into Africa…keep in mind the absolute volume is not that great, but the potential is in terms of growth.”

Thus, China will be the main beneficiary of trade with Africa while the United States pursues “trade war” tactics that isolate it from future trade growth in a way that is “to some degree irreversible.”

Jensen says the Trump Administration's decision to impose tariffs on India helped turn India, an enemy of China, into a friend of China, and this is going to lose the US trade with India. “There are multiple effects. One thing is, of course, the effect on India itself.

It is not the only reason, but it's probably one of the reasons why you certainly saw the Indian President Modi together with President Xi of China. Let’s not forget these two countries are basically enemies and have been so for decades. Suddenly, we see them smiling on stage together. That is the harbinger of where the world is moving to. Clearly, India needs to focus on how it trades with other countries when the US becomes so difficult.”

The seemingly irrational acts of the Trump Administration are hard to understand. “And the unpredictability here is key because in sharp succession, first you have a visit between Modi. Then right after that, you get the 25% [tariff] reciprocals on India, then followed by the 25% penalty for buying Russian oil, which logically speaking doesn’t make a lot of sense because China is buying more Russian oil than India is.”

Red Sea Threats and Trade

Jensen said that trade from Asia to the United States is likely to continue to favor utilizing US West Coast ports as long as Houthi attacks on ships sailing in the Red Sea effectively block the Suez Canal route and force ocean carriers to sail around Africa. “Because you see more sourcing from Southeast Asia and over time, the Indian subcontinent, it is a shorter sailing distance going to the US East Coast. But that is provided you can use the Suez Canal. As long as you still have to go around Africa, we aren’t going to see much of that swing [to the US East Coast ports]. So, it’s intertwined here with the Red Sea crisis. There is no hope this will change at the moment, none whatsoever. If anything, this just gets more complicated. The Red Sea crisis is, of course, triggered by the Israel-Gaza conflict, and there is no sign whatsoever that it is about to abate. The Houthis' rationale for doing this is that they are seeing this as a war, they need to push back against. There was half a year here, the first half of 2025, no ships were attacked. And that led to a lot of comments that maybe that shipping lines should start to go back to the Suez Canal, but when you got to July, two ships were attacked and sunk.”

USTR and China Ship Fees

The US Trade Representative is expected to announce it will be imposing fees on Chinese-built and owned ships in October that will most directly impact US port calls by COSCO (China Ocean Shipping Company) and its subsidiary OOCL (Orient Overseas Container Line).

Jensen says, “The fees will directly impact COSCO and OOCL while CMA CGM and Evergreen will indirectly be impacted. First of all, there are exceptions for small ships and short journeys. So, trade between Central America, the Caribbean, and up to the US is basically kept out of the equation. Then, for the Chinese-built ships — you are already now beginning to see the carriers adjust their vessel rotation. So, they‘re phasing out some of the Chinese-built ships, putting other ships in, which was entirely to be expected. We are going to see more of that. COSCO and OOCL cannot avoid this fees because they are in a different category. In the proposal, there are fees on Chinese-built ships, but there are separate fees on Chinese fees on Chinese operated carriers, and those fees are four times higher than on the Chinese-built ships. So, COSCO and OOCL can’t hide from the fees. There was an estimate by the HSBC [Hong Kong and Shanghai Banking Corporation], this fee will cost them $1.5 billion in total because basically they are the same carrier. OOCL is majority owned by COSCO.

For this reason, Jensen believes the two carriers will likely avoid the fees by cutting down calls to US ports, “So, the question becomes what will then be the outcome? COSCO and OOCL will not eat a cost of $1.5 billion. That would render them a lot less competitive with other carriers. I’m pretty sure they would not be satisfied with that. What they can do is try to limit the number of port calls at US ports. For example, OOCL announced a new service just a few weeks ago from China to Mexico without calling in California. That would likely be one of the ways to do it. I could envision some China to the Pacific Northwest services just calling Canada, for example.”

Although Jensen doesn’t see even with the potential drop in Chinese-built and/or operated carrier ship calls to US ports, triggering freight rate increases, US importers and exporters will feel the pinch of fewer options, while some US ports will inevitably see a decline in ship calls.