Tariffs: The tiff has started

Investment Analysis Clubs Macro Economic Trends and Risks
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Some thoughts from the shipping side
a. Shipping broker Gibson
As noted, tariffs on China, Mexico & Canada were announced at the beginning of Feb 2025, but then Mexico and Canada had their tariffs delayed a month. OTOH, China’s tariffs remained in place and that country quickly retaliated with their own set of tariffs on US products.

Additional details on Canada crude and refined product volumes to US, and Mexico crude volumes to US. US crude exports to China not significant

b. LPG shipping company Dorian LPG (LPG) management
While US crude exports to China is not major, it is different for other energy types. The top management at Dorian LPG did have a concern about LPG. China imports over 40% of its LPG from the US. Looking for alternate sources will represent a challenge. LNG is another China import. But, to my knowledge the % is not as high as LPG. Still, it seems as though China is selective in the US items that will have tariffs applied.

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Separate item related to the Gibson report. Their weekly report provides rate data on a set of major routes. Last reported week, tanker owners are making money on the major routes. But, crude oil (dirty) tanker owners are generally making more money/have better margins than their refinery product (clean) tanker owners.

For 2025, LNG tanker spot rates are not very attractive. Too many vessels means even the most fuel efficient vessels are not making decent returns in the current spot market. The US LNG company I mentioned a couple of weeks back, Venture Global (VG), might have additional supply coming online. But, I don’t think it will move the needle much in 2025.

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Maybe being first in line with a $1M “donation” will pay off for Ford?

Leaders praise each other at White House but president warns Japan could face tariffs if it doesn’t cut US trade deficit to zero

After forty years of the US following the lead of Milton Friedman and offshoring as much as possible to other countries, zeroing out the US’ trade deficit, quickly, would be almost impossible.

Steve

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Doesn’t look that way. Farley wants Japanese and Korean cars tariffed out of the US market.

breaking news*

The plan announced by TI and the Japanese PM, tonight, is for trade to be balanced by Japanese purchases of US oil and LNG.

US trade deficit with Japan has been running about $68B/year. Japan has been importing about $86B in crude oil, primarily from the middle east, and about $1B/year of LNG.

US trade deficit with South Korea has been running about $43B. South Korea imports about $86B/year, primarily crude oil.

So, yup, if the US has enough oil production capacity, trade with Japan and SK, could be balanced by persuading those countries to buy oil and LNG from the US.

The bit about Japan buying LNG starts around the 5:10 mark.