Opinion | When the Dollar Sneezes, Global Shipping Catches a Cold.

Estimated reading time: 8 minutes

By: Peter Bouwhuis

Let me tell you something about trust. Once you’ve broken it, you don’t just apologise and expect everything to snap back to normal. Ask anyone who’s ever had a falling out with a close friend over money. The damage lingers.

That’s exactly what’s happening right now with the US dollar. And it worries me more than most headlines seem to suggest.

Here’s the backstory. The US Supreme Court struck down President Trump’s “Liberation Day” tariffs in February, ruling he had overstepped his authority. So what did Trump do? He reached for another legal tool: Section 122 of the Trade Act of 1974. This provision allows a president to impose temporary import surcharges, but only if the United States is facing a “large and serious” balance-of-payments problem.

And here’s the thing. It isn’t.

Gita Gopinath, former Chief Economist at the IMF, said it plainly: the US has a persistent trade deficit, not a balance-of-payments crisis. Those are two very different things. Even IMF Managing Director Kristalina Georgieva questioned why Section 122 was being invoked at all.

So why does it matter that Trump is claiming an emergency that doesn’t exist?

Because words have consequences. Especially when you’re the country that prints the world’s reserve currency.

The dollar’s dominance was never just about economic size. It rests on something harder to quantify: confidence. Confidence in American institutions, in the independence of the Federal Reserve, in the reliability of contracts, in the rule of law. When you start calling Supreme Court justices “fools” and “lapdogs,” when you float ideas about taxing foreign purchases of US Treasurys, when your trade policy changes direction within hours, that confidence starts to erode.

Investors are still buying T-bonds, yes. But they’re hedging those positions like never before. That’s not a vote of confidence. That’s a vote of “we don’t have a better option yet.”

And that’s the uncomfortable truth hiding in plain sight. The dollar isn’t dominant because it’s earned it lately. It’s dominant because nothing else is ready to take its place.

Meanwhile, China is quietly doing what China does. President Xi Jinping doesn’t improvise. He doesn’t announce a 10% tariff, then 15%, then walk it back two days later. He is methodically expanding the renminbi’s international footprint through swap agreements, a parallel payments system called CIPS, and even a central bank digital currency. It’s not going to replace the dollar tomorrow. But the direction of travel is clear.

Think of it like a neighbourhood where one house has been the anchor for decades. Everyone knows it, trusts it, references it. Then the owner starts making strange decisions, picking fights with the neighbours, repainting it in the dark. The house is still standing. But people are starting to eye up the property two streets over.

The Trump administration has turned tariff policy into a kind of legal whack-a-mole. One authority gets struck down, another one pops up. The so-called “napkin deals” negotiated under the old tariffs have no legal standing. Some countries that rushed to negotiate exceptions may actually end up paying higher rates than those who refused to play ball. That’s not a trade strategy. That’s chaos.

And here’s what gets lost in all the noise. Every time the administration invokes a crisis that doesn’t exist to justify a legal shortcut, it chips away at the very story the dollar tells the world. That story is: we are stable, predictable, and you can trust us with your savings.

Once you start doubting that story, you don’t stop. You just start looking for alternatives with more urgency.

Now let’s talk about shipping. Because this is where it gets very real, very fast.

The international logistics and maritime industry runs on predictability. Full stop. A freight forwarder booking container space three months out, a bulk carrier operator fixing a voyage charter, a port authority planning terminal capacity — they all depend on knowing, roughly, what the world will look like when the cargo arrives. Tariff chaos and dollar uncertainty are not abstractions for these people. They are operational nightmares.

Start with the basics. Almost all international shipping contracts are denominated in US dollars. Freight rates, port dues, bunker fuel, ship finance, insurance premiums — all dollars. When the dollar starts to wobble in credibility, even slightly, the cost of doing business in shipping becomes harder to predict. Hedging currency risk costs money. That cost lands somewhere, and in a low-margin industry like container shipping, it typically lands on the shipper, which means it lands on the price of everything you buy.

Now add tariff unpredictability on top of that. The Trump administration’s habit of announcing a tariff level, reversing it within hours, then reimposing something slightly different two days later is not just confusing for economists. It is genuinely disruptive for supply chain planners. A cargo that makes commercial sense at a 10% surcharge may not make sense at 15%. Shipments get delayed, rerouted, or cancelled. Containers sit in yards. Vessels steam slower to burn less fuel while operators wait for clarity that never quite arrives.

We saw a version of this during the Red Sea crisis, when Houthi attacks forced carriers to reroute around the Cape of Good Hope, adding thousands of miles and significant cost to voyages between Asia and Europe. Major carriers like Maersk and MSC had to rethink entire network structures almost overnight. The industry coped, but only by burning through the buffer of predictability that had been carefully built up after the pandemic disruptions. That buffer is thinner now than it was.

Tariff instability operates differently from a physical disruption, but the downstream effect on shipping volumes is comparable. When importers don’t know what their landed cost will be, they delay purchasing decisions. When purchasing decisions get delayed, booking volumes soften. When booking volumes soften, freight rates drop. And when freight rates drop sharply and suddenly, carriers start blanking sailings, which then creates the opposite problem: a capacity crunch when demand eventually returns.

This cycle is not hypothetical. The container shipping industry went through a version of it during the first Trump trade war with China in 2018 and 2019. Shippers front-loaded cargo ahead of tariff deadlines, creating artificial demand spikes, followed by sharp corrections. Forecasting became nearly impossible. That experience left scars.

The dollar question adds a longer-term dimension. Here’s something worth thinking about. If China’s CIPS system gradually gains traction, and if more commodity trades begin settling in renminbi rather than dollars, the pricing dynamics of global shipping start to shift. Bunker fuel contracts, which today are almost universally dollar-denominated, could begin to fracture. Chinese shipowners, who now control a substantial share of global tonnage, have every incentive to push for settlement in their own currency. So do Chinese ports, which handle more container throughput than any other country on earth.

This won’t happen overnight. SWIFT still handles around 90% of global cross-border payment value, and the infrastructure of dollar-denominated shipping finance is deeply embedded. But the direction matters more than the current position. Five years ago, the idea of hedging dollar exposure on a T-bond portfolio felt paranoid to most institutional investors. Today it feels prudent. The same logic will eventually apply to shipping contracts.

There’s also the matter of port investment and ship finance. Large infrastructure projects, whether a new container terminal in West Africa or a fleet renewal programme for a European shipping company, are typically financed in dollars through dollar-denominated bonds or loans. If the cost of dollar borrowing becomes more volatile, or if lenders start pricing in institutional risk around US policy unpredictability, the cost of capital for these projects rises. That slows down the investment cycle, which eventually means older, less efficient tonnage stays in service longer, and new port capacity comes online later than the market needs it.

For the logistics sector specifically, the challenge is one of scenario planning gone haywire. A good logistics operation runs on tiered contingency plans. You plan for disruption, but you plan around known variables. What the current environment is producing is a situation where the variables themselves keep changing, not because of market forces or geopolitical events, but because of deliberate policy choices that reverse themselves unpredictably. That’s a different kind of hard to manage.

What I keep hearing from people inside the industry is a version of the same frustration. They can handle bad news. They’ve handled pandemics, canal blockages, and port strikes. What they struggle to handle is noise without signal. Policy announcements that mean something, then don’t, then mean something slightly different. Legal frameworks that are valid one week and struck down the next.

Playing games with tariff law is one thing. Playing games with the credibility of the dollar is something else entirely. And for an industry that moves 80% of world trade by volume, the stakes are not abstract. They are measured in containers, in freight rates, in the price of goods on shelves, and in the quiet decisions being made right now about which currency to settle in next time.

Unlike a 150-day tariff measure, the damage to trust doesn’t come with an expiry date.