By Vincent Wen    Photo：CANVA

Currently, global shipping market prices continue to rise, particularly noticeable in North America, Europe, and Africa. For instance, the price for shipping from Asia to the U.S. West Coast in June has increased by about $1,000 compared to mid-May. Industry insiders generally believe that prices will keep rising in the next three months, not only due to the upcoming peak season in the third quarter but also because of a shortage of ships and an undersupply of containers, which will further exacerbate the situation.

EU Discusses Imposing High Tariffs on Chinese Electric Vehicles

According to reports from Brazil, the EU is discussing increasing tariffs on Chinese electric vehicles. Recently, the European Union has launched a series of anti-subsidy investigations into Chinese imports, especially green energy products, to curb the entry of low-priced Chinese electric vehicles into the EU market. The investigation could result in tariffs of 15% to 30%, but this may still be insufficient to regulate the influx of low-cost Chinese electric vehicles into the EU market and effectively reduce Europe’s attractiveness as an export market for China. Despite high import tariffs, Chinese electric vehicles still reap substantial profits. The EU may announce permanent tariffs in November, with potential import tariffs on Chinese electric vehicles being around 50%.

BYD Plans to Start Production in Brazil in the Second Half of This Year

BYD's large production base in Camaçari, Brazil, is set to begin production in the second half of the year. This large complex includes three factories and will require at least 20,000 containers to be shipped to South America in the short term, causing a temporary shortage of market shipping capacity. COSCO will divert some vessels from West African routes to support South American routes, leading to a general increase in West African freight rates, which in turn will impact the overall shipping market.

Impact of Tariff Increases on Freight Rates

In addition to the EU, the Brazilian government will gradually reinstate the previously exempted tariffs on Chinese electric vehicles starting in July. Meanwhile, the U.S., based on the original Section 301, will increase tariffs on Chinese electric vehicles to 100% starting August 1. Car manufacturers exporting to the U.S. are expected to take advantage of this time to export cars massively to Mexico to avoid tariffs, further intensifying short-term export competition and raising freight rates. The significant increase in Latin American cargo volumes will further lead to a shortage of market shipping capacity. At the same time, shipping companies redirecting vessels from West African routes to support South American routes will also cause a chain reaction affecting West African freight rates. Additionally, the large-scale export of BYD vehicles to Europe, leading to container congestion in European ports and a shortage of containers in Asia, are all factors contributing to the continued surge in freight rates this year.

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