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The imposition of US tariffs on trading partners has added to existing uncertainty around geopolitical tensions, but cargo shippers and their insurers are adapting to this new normal.
Published on November 27, 2025
By David Pressman and Rajit Sharma
Originally published by Insurance Day, 26 November 2025:
Gauging the fallout of tariffs on the cargo market :: Insurance Day
4-minute read
Since the ‘Liberation Day’ tariffs were announced on 2 April 2025, key trading partners with the United States have sought to negotiate more favourable terms with President Trump’s Administration.
As of mid-October, the average US tariff stood at 18%, the highest rate recorded since 1934.
While this was a major improvement for many countries, the tariffs have created significant turbulence in the global economy and continuing uncertainty for businesses exporting goods to the US.
Overall container cargo imports into the US in September dropped 8.4% year-on-year, with shipments from China falling 22.9%. Meanwhile, economists are predicting short-term price rises for US consumers on household goods, cars and groceries.
The situation has further complicated global shipping supply chains, which have already experienced significant disruption from the Suez Canal blockage, drought in the Panama Canal and conflicts threatening shipping in the Red Sea and Gulf of Aden.
The impact of tariff uncertainty
With the main goal of US tariff policy unclear, businesses are struggling to assess the longer-term impacts and plan accordingly. This has prompted many to pause growth and investment plans, explore alternative trading routes and even stockpile goods to beat the impact of tariffs on their business.
The biggest negative impact was expected to be felt by car carriers and the container sectors, with the latter experiencing a combination of increased activity ahead of the tariffs, greater use of air freight and an uptick in demand for bonded storage.
The uncertainty also persuaded many companies to rethink their supply networks. US companies importing goods from China moved production or procurement to other Asian countries facing lower tariffs than China, such as India and Vietnam.
Non-US companies considered reducing exports to the country, as the tariffs threatened to cut into their profit margins on US business. And some companies importing goods from the US may have cancelled orders and sought alternative, non-US, suppliers as retaliatory tariffs drove up the cost of US-made goods.
West Coast US ports subsequently witnessed large drop-offs in shipping volume from May, as trade with China decreased. Concurrently, countries with close economic ties to China which faced lower tariffs saw trade with the US increase in succeeding months.
However, with the imposition in August of reciprocal tariffs on key Southeast Asian producers, ranging from 15%–20%, export volumes from these countries hang in the balance, with Vietnam having seen exports fall 1.5% in October from a month earlier.
Other clients are looking to reshore their business, moving manufacturing and/or procurement from Asian producers and redomiciling it in the US. However, Apple’s announcements of a total US$600bn in investment for its “American Manufacturing” programme were met with some scepticism regarding how quickly reshoring will happen.
At the same time, stockpiling of goods ahead of tariff deadlines has introduced additional exposures in ports, warehouses and distribution centres, requiring additional excess layers on cargo policies.
While it's too early to assess how tariffs will impact claims trends, if re-routing of cargo overland continues over the longer term, this could lead to the possibility of an uptick in inland marine claims.
Insurance implications of tariffs
Supply chains are remaining resilient in the face of tariff uncertainty, and the cargo insurance market is similarly adapting to the evolving trade and risk environment.
With tariffs driving up the overall costs of exports to the US, the value of goods in transit has also risen. Cargo insurers need to remain vigilant on the impact on insured values across accounts and work with broking partners, ensuring accuracy within submissions or risk under-insuring clients when a loss occurs.
Furthermore, with insureds looking to stockpile goods to beat the short-term impacts of tariffs, the London market is well-placed to meet the demand for increased policy limits.
Maintaining flexibility and agility as a market
Clients will be looking for increased limits at policy renewals to meet the impact of tariffs, and capacity is likely to be an abiding longer-term concern. However, we’re confident the cargo market remains agile and able to meet those capacity demands.
The role of insurance carriers is to continue supporting insureds by smoothing out the uncertainty curve and demonstrating leadership across the cargo market through tailored risk transfer solutions.
With significant improvements over the past decade in the risk data available to the cargo market, we’re better able to leverage in-house technology and third-party solutions to monitor aggregations and support insureds facing increased static exposures.
There’s likely to be increasing demand from insureds for risk management advice from their insurance partners. While the longevity of Markel’s relationships with insureds enables us to help them risk manage portfolios more efficiently, we’re always looking to get closer to clients to understand their needs and provide that clarity of cover.
In a volatile trading environment, already impacted by geopolitical tensions, advice from cargo insurers on vessel selection, cargo war cover for conflict areas and shipping goods via alternative trading routes will prove invaluable in meeting the tariff challenge head-on.
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