How Tariff Hikes and the Red Sea Crisis Are Disrupting Global Trade: A Deep Dive into Container Shortages
In a recent Commerce Ministry review meeting, Indian exporters voiced their concerns about a sudden shortage of containers. This issue, they say, stems from structural weaknesses that have plagued Indian exports since the COVID-19 pandemic. Now, as the European Union’s 37.6% tariffs on Chinese Electric Vehicles (EVs) take effect and the US prepares to implement similar measures, the container shortage is intensifying, impacting traders globally. Shortages have also resurfaced as voyage time of ships has increased amid the ongoing Red Sea crisis and fresh trade tensions between the US and China. The Trigger: Tariff Hikes on Chinese Goods Indian exporters are finding it increasingly difficult to secure containers for their goods. The primary cause? An increased demand for containers by Chinese exporters. Facing steep US and EU tariffs — up to 100% on EVs and 50% on semiconductors — Chinese exporters are rushing to ship their products before the tariffs hit. This surge in demand from...