Tensions between the US and China are causing a decline in container shipments between the world’s two largest economies, exacerbating an ongoing shift in global trade, says a prominent shipping industry leader.
Jeremy Nixon, CEO of Ocean Network Express, remarked at the Capital Link Singapore Maritime Forum that trade between the US and China is decreasing. Many American companies are now seeking to reduce their reliance on imports from China.
Nixon, whose company ranks among the top 10 container shippers, stated that the percentage of containers carrying a wide range of goods from China to the US has dropped by around 10 percentage points in the past year. Consequently, the US is forging stronger connections with other trading partners such as Europe, a trend Nixon expects to continue.
Over the past year, the world’s largest economies have become increasingly independent of one another. This change has been primarily driven by a widespread slowdown in the global economy, which has particularly affected container shipments as the pandemic-induced demand surge has receded.
Geopolitical factors are now intensifying this decoupling, says Nixon. Disagreements over Taiwan and an alleged spy balloon shot down over the US have fueled tensions. President Jo Biden is considering an executive order to restrict American investment in key sectors of China’s economy.
As a result of the slowdown in the China-US trade route, the US is importing more goods from other regions. Although container freight rates have generally fallen this year, the decline has been less steep in Europe as the US imports more from the continent. Shipping flows from the Mediterranean, India, and Southeast Asia to the US have also seen a boost, according to Nixon.
