Jensen says Trump trade policies isolating U.S. and reducing port volumes

The United States is facing growing isolation from its international trading partners because of the Trump administration’s tariff policies, resulting in container volume declines at US ports, according to Lars Jensen, CEO of Vespucci Maritime, based in Copenhagen, Denmark.

Impact on US Trade and Port Volumes

Jensen was speaking to the Propeller Club of Northern California (PCNC) on February 3rd, where he said the non-stop tariff threats by the Trump administration are undermining US credibility in the world. “The way this is now being perceived is to be quite blunt — nobody is really taking it seriously. This is now being seen as not quite a daily occurrence, but an occurrence that happens multiple times a week. Unless this comes out in an executive order or as an actual rule, nobody cares anymore. This is taken as noise. That doesn't mean that it doesn't have any impact. It absolutely does have an impact on container markets related to the United States, but solely related to the US.”

When the Trump administration announced a series of tariffs as part of the so-called ‘Liberation Day’ series in April 2025, it set in motion a rapid decline in US trade volumes: “And the effect of the trade war is very visible, very instant. The moment after we saw the so-called “Liberation Day” (tariffs). What we have seen during the trade war is that the rest of the world has been growing basically twice as fast as what could be expected. 

North American trades have been underwater ever since. This is for both imports and exports combined, mitigated somewhat by exports. As a consequence of the trade war, the share of volume attributable to North America is also in a rapid decline. So very simply, all over the world has been doing fantastic when it comes to container volume growth in 2025.”

The impact of these declines will especially impact smaller US ports, reducing their volumes, especially since these ports lack the cargo-handling capacity to load and unload mega container ships, Jensen said.

At the same time, he added, the imposition of US tariffs and the decline of the US dollar will accelerate inflation in the United States.

Greenland Threat Has Soured US-Europe Relations

The decline of the US dollar is increasingly a vote of no-confidence in the United States and its adversarial trade policies towards its trading partners.

The Trump administration’s threats to turn Canada into the 51st U.S. State and the threat to occupy Greenland have made a bad situation worse:

“I have to mention Greenland, especially since I'm sitting here in Denmark. If this were to explode all over the place, the way we saw just a couple of weeks ago, we would be faced with the worst trade war we have ever seen between the EU and the US, and I don't think I can stress this enough, seeing this from a European perspective. I'm not sure it's fully appreciated just how much this has ruined the view on the US, not just from the perspective of governments, but also from the perspective of companies in terms of the US as a reliable trading partner. Even if this is resolved, it is going to linger quite a long time.”

Suez Canal

Jensen said plans had been underway to start re-routing container ships away from the circumnavigation of Africa and through the shorter route to Europe through the Suez Canal. This is because attacks by Houthi extremists on shipping in the Red Sea had stopped. As the shift back to the Suez Canal was likely to create congestion at European ports because of ships still navigating the African coast headed to European ports at the same time: “When that gets shifted up to Suez, there's going to be a little bit of a (ocean carrier freight rate) spike coming into European and US East Coast ports … during this transition because port congestion will reign supreme. Reliability is not going to matter to the carriers.”

That situation may change if hostilities between Iran and the United States escalate and Iran’s allies, the Houthis, Islamic extremists based in Yemen, start shooting at ships accessing the Suez Canal through the Red Sea. They had stopped after hostilities between Israel and the Palestinians subsided: “Because within the last couple of hours, first we had the Iranian Revolutionary Guards sending out vessels, beginning to harass a US-flagged crew tanker in the Strait of Hormuz. After that, US forces shot down an Iranian drone that was moving aggressively towards the US aircraft carrier. If this escalates further, we might actually be into the scenario where the Houthis will start shooting at ships again.

Let me remind you, the best-case scenario is that if this doesn't spiral out of control, we are looking at an imminent opening of the Red Sea. But if the Houthis now start shooting the ships again, any hopes of reopening need to be postponed at least six months further into the future.”

Ocean Carrier Price War?

Jensen says he sees the prospect of an ocean carrier price war happening after the Suez Canal route is safely re-established. He believes an overcapacity situation will last into 2028: “Most of these carriers have order books now in excess of 30% of their own fleet. In some cases, the order book is in excess of 40% of their currently operated fleet. This is not just for fleet replenishment. They are going to try to grow aggressively, at least some of them. That would be one driver of a price war. Mind you, it's not necessarily certain that we get the price war here in the first half of 2026, because if we open the Red Sea, we're going to get the European port congestion that will actually force rates up while we have this transition period. Once the market stabilizes with new services through the Red Sea, we will get into a price war. Every single cyclical downturn for the last 40 years has always led to a price war. It would be unwise to think this time is any different.”

Tariff Policies Not Hurting China

Jensen said, US tariff policies are not hurting China but have forced US companies to source more imports from Southeast Asia: “Let's be clear, this shift from China down towards especially Southeast Asia is mostly a US phenomenon. China's growth in Europe was phenomenal. China's growth in Africa was phenomenal. Their growth in South America was phenomenal. This shift was purely one of the first side effects of the US trade war. Remember when the US put these 100% tariffs plus on China, then obviously people were scrambling to try to source out of wherever they could, and then source goods. 

This seems to be driven by a US government that lives under the illusion that by penalizing other countries, it can force other countries and companies to do what the US would like them to do. As we have seen in the numbers very clearly in the last 10 months, that is not how the world works.”

Trade Volumes for Asia-Africa Rising

Jensen said that as volumes for North American ports decline, trade volumes with Africa are on the rise: “We have been accustomed for decades that the main trades were the Asia to North America and Asia to Europe trades. These were the largest trades. They were the main drivers of container shipping. That is going to change. I call it the Asia - Africa mega region. This is where trade is going to be. What I'm showing you here is something very simple: population growth. Predicting populations, at least if you're only looking 20 years out, is usually pretty accurate. People don't change their behavior that quickly. And that shows us that Asia will reach a peak in population in the 2040s. Africa will continue (to grow) well beyond that. If there is one major key driver of container volumes is the number of people. Even if people do not get wealthier, more people still need more food, more houses to build, more machines to put in, more everything to make this tangible. But just look, since the start of the Pandemic until today, this region has added 350 million people. That's the entire population of the US added just in the last six years. From now until 2030, which is only four years away, they're going to add another 300 million people. That is the equivalent of the US population added just in the next four years, on top of that, add the assumption that the African population, on average, is going to grow somewhat in wealth.”