by Lloyd's List
27 March 2025 (Lloyd's List) - CONFIRMATION by the US government that it will significantly increase tariffs on imported cars is expected to have a significant impact on vehicle carrier operators.
President Donald Trump confirmed yesterday, March 26, that tariffs of 25% on all cars imported to the US will come in to effect from April 2. Imported cars are currently only subject to a 2.5% tariff.
At the same time, it was confirmed that 25% tariffs will also apply on imported autoparts, effective from May at the earliest, which is expected to have a particular impact on container markets.
While the plans had been mooted by Trump in January and so were hardly unexpected, car manufacturers are now faced with thousands of cars currently on board vehicle carriers arriving to US shores after the new tariff's implementation.
Fearnley Securities said today, March 27, that the April 2 implementation of the tariffs means there will be no room for front-loading cargoes.
It expects stock exchange-listed vehicle carrier operators’ shares to trade down today due to expectations of reduced vessel load factors.
“Near half of all cars sold in the US last year were imported, and it is quite clear for us that a 25% cost increase for importers will pressure car sales in the country further. All else equal, we expect car volumes going into the US to come down, negatively affecting seaborne volumes and thus also car carrier earnings,” noted Fearnley Securities.
As the world’s largest vehicle carrier operator, and the provider of logistics services between Mexico and Canada to the US, Wallenius Wilhelmsen could be most hard hit by any downturn in imported cars to the US.
According to Lloyd’s List Intelligence data, Wallenius Wilhelmsen vessels (including those operated by its South Korean subsidiary EUKOR and US-flag subsidiary American Roll-On Roll-Off Carrier (ARC)) made a total of 371 port calls in the US in 2024.
Oslo Euronext-listed Wallenius Wilhelmen’s share price dropped from its 0900 hrs CET yesterday price of NOK82.2 to NOK73.5 as of midday March 27.
A spokesperson for Wallenius Wilhemsen told Lloyd’s List today: “The 25% US import tariff on vehicles and key automotive parts announced by the US administration are expected to have implications for manufacturers, consumers and markets.
“Tariffs, the likelihood of reciprocal measures from impacted countries, and further escalations can affect global trade flows and may have long-term implications for supply chains.
“Wallenius Wilhelmsen’s business remains diversified across markets, regions and segments and we continuously adapt to evolving global trade conditions.”
They added: “We monitor the situation closely and are in constant dialogue with our customers and stakeholders.”
In February, Wallenius Wilhelmsen chief executive Lasse Kristoffersen admitted that US tariffs could have a big impact on activity levels at Wallenius Wilhelmsen’s logistics division.
The logistics division provides vehicle finishing and delivery services to Mexican and Canadian car factories, which export cars to the US over their respective land borders.
However, Kristoffersen noted that while US tariffs are likely to impact car volumes shipped to North America, they could provide for additional seaborne exports of US-produced vehicles, and the diversions of cars produced in Mexico and Canada to other markets by ship.
The share price of fifth-largest operator Höegh Autoliners, which is also listed on Oslo Euronext, was trading at NOK77 as at midday today, down from yesterday’s NOK82.4.
Commenting on the planned implementation of significant US import tariffs, Höegh Autoliners chief executive Andreas Enger told Lloyd’s List: “We have seen the news and will spend the next few days assessing what this will mean in collaboration with our customers.”
Car volumes moved by vehicle carriers from the European Union, Japan, South Korea and the UK are likely to be most affected by Trump’s plans to boost US domestic car manufacturing.
Germany-headquartered Volkswagen Group, the world’s second-largest car manufacturer, is the biggest shipper of cars from Europe to the US.
Volkswagen utilises some shipping capacity provided by the major vehicle carrier operators but has its own dedicated fleet of pure car and truck carriers for the US market. They operate from the German North Sea port of Emden to US east coast ports.
Volkswagen has four factories in the US that could be ramped up to cater for a greater share of locally manufactured cars.
Japanese and South Korean car manufacturers already have significant production capacity in North America but also have the highest share of car exports to the US.
South Korea’s Hyundai Motor Corporation has already announced plans to produce steel in the US and expand local car production.
Veson Nautical ro-ro analyst Andrea de Luca told Lloyd’s List that Japan and South Korea will suffer the most from tariffs, given they are the largest car-exporting nations to the US.
“Almost a third of Japan’s light vehicle exports are sold to the US, whereas South Korea’s exposure is even higher, at an eye-watering circa 41%. Almost all are shipped on PCTCs.
“The global vehicle carrier market has just flipped from balanced to firmly negative for the rest of 2025. This is based on vessel supply growth of 10%, while car-mile demand is expected to fall by 5%. This will drag down freight rates and PCTC values,” said de Luca.
The UK’s JLR, which manufactures Land Rover and Range Rover vehicles in the UK and Slovakia for the US market, has no US manufacturing facilities. North America, chiefly the US, is JLR’s biggest export market, with 26% of its annual car production sold on the continent.
JLR utilises the ro-ro services of combined container/ro-ro vessel operator Atlantic Container Line from the port of Liverpool for US exports.
ACL’s chief executive Andy Abbott told Lloyd’s List: “It’s too soon to determine exactly how this will affect our westbound UK car and container liftings, but it can’t be good. It will be interesting to see how the stock markets react to the news.”
Abbott noted that historically, when US car sales go down, “the rest of the economy follows”.
“When you tinker with car sales at a time when the stock market is already jittery, you seriously push the scale towards recession, because you push the lower income people out of the new car market. Car sales go nowhere but down,” said Abbott.
Lloyd’s List Intelligence data shows that of the circa 700-strong deepsea vehicle carrier fleet, 471 of them called at US ports in 2024.
Car carrier liner services are relatively complex, with some operating as pendulum or round the world services inter-linking Asia with the US via Australasia, the Middle East or Europe. Any significant decrease in volumes will force vehicle carrier operators to change service trading patterns as US port calls are reduced.
Yesterday’s announcement on tariffs follows the looming port levy expected to be introduced by the United States Trade Representative to target any operators of China-built ships either in service or on order.
While much of the existing fleet was built by Japanese and South Korean shipyards, most of the 180 vessel PCTC newbuilding orderbook is being constructed in China. The vehicle carrier sector is thus expected to be hit hard by the USTR’s levy.
Whether either tariffs or the USTR levy actually get implemented — at least for the long term — remains to be seen. Both could ultimately just be utilised to provide leverage for improved trading terms, and reduced tariffs on US exports.
After all, most cars imported into the EU, including those from the US, are subject to a 10% tariff presently (in other words, four times higher than those imposed currently by the US on imports of EU-manufactured cars).
