Introduction

Seaborne trade is the lifeblood of the global economy. Ships carry roughly 80 percent of world merchandise trade, moving everything from consumer goods and food to energy and raw materials. Because tariffs directly affect the cost of moving goods across borders, changes in trade policy ripple through the maritime industry. In 2025, the United States and India found themselves at opposite ends of a tariff dispute that illustrates how government policy can reshape trade flows, vessel deployment and port operations. This article compares how tariffs have affected maritime transport in the United States and India and explores how each country’s industry is adapting.

A Wave of Tariffs in 2025

The latest round of tariffs stems from a series of executive orders issued by the U.S. government in mid‑2025. Under a “reciprocal tariff” policy, the United States imposed a 25 percent duty on imports from countries that it deemed to have unfair trade practices. On 7 August 2025, India joined that list. The U.S. then added another 25 percent levy on Indian goods because of India’s continued purchases of Russian oil. Effective 27 August 2025, most Indian goods entering the U.S. market faced combined duties of around 50 percent.

These duties sit atop a web of other U.S. tariffs. A Maersk customer advisory highlighted new 15 percent tariffs on goods from the European Union and Japan, 19 percent duties on Indonesian products, 50 percent tariffs on Brazilian products and copper. An International Trade Insights update noted that Section 232 duties continue to impose 50 percent rates on semi‑finished copper and some steel products. For importers and carriers, the cumulative effect is a multilayered set of charges that can quickly double or even triple a shipment’s cost.

Impact on the U.S. Maritime Industry

Volume and Demand Fluctuations

U.S. importers responded to the tariffs by front‑loading cargoes, shipping goods early to beat implementation dates. Reuters reported that the ocean shipping industry, valued at about US $14 trillion, experienced a surge in container imports leading up to the duties. Some shippers switched to air freight to avoid potential delays and price volatility. Once the duties took effect, analysts predicted a sharp drop in demand as importers adjusted to higher costs and depleted inventories.

Cost and Regulatory Uncertainty

Tariffs injected uncertainty into freight pricing. The London Maritime Academy observed that unpredictable policy shifts encouraged importers to place orders well in advance, causing freight rates to spike and then crash. Carriers also faced additional paperwork and compliance costs because small shipments that used to qualify for de‑minimis treatment now required full customs entries. When multiple duties overlap—reciprocal tariffs, Section 232 measures, and additional sanctions on specific commodities—importers must carefully classify goods and plan for higher landed costs.

Route Reconfiguration and Environmental Considerations

Tariffs have reshaped trade lanes. With Chinese exports to the U.S. attracting higher duties, shippers shifted some supply chains to alternative manufacturing hubs such as Vietnam and Mexico. For vessels, that means different port rotations and possibly longer voyages. The London Maritime Academy warned that longer routes and rerouted cargoes increase fuel consumption and greenhouse‑gas emissions. Port operators on the U.S. West Coast saw fewer Asia‑bound sailings while ports on the Gulf and East Coasts braced for changes in cargo composition.

Industry Sentiment

Uncertainty has dampened investment. Ocean carriers reported being “whipsawed” by policy shifts. Forwarders had to renegotiate contracts frequently, and some terminals added surcharges to offset rising operational costs. Although maritime employment in the U.S. remains strong, the outlook depends on whether tariffs lead to sustained reductions in trade or if companies adjust supply chains and cargo volumes rebalance.

Impact on India’s Maritime Industry

Trade Performance

India’s maritime sector looked surprisingly resilient. According to India’s Ports, Shipping and Waterways Minister, there was “no reduction” in cargo shipments to the United States despite the 50 percent tariff. India’s exports to the U.S. even increased 21.64 percent year‑on‑year from April to July 2025. Nearly 90 percent of India’s foreign trade by volume moves by sea, so port operators are used to navigating policy shocks.

Sector‑Specific Challenges

Nevertheless, the new duties squeeze profit margins. A detailed analysis by India Briefing explained that Executive Order 14329 effectively doubled tariffs on most Indian exports. Manufacturers of hand tools, machinery, textile products and electronics complained of cancelled orders because their goods became less price competitive. KPMG highlighted that micro, small and medium‑sized enterprises (MSMEs) make up more than 45 percent of India’s exports, making them particularly vulnerable. Sectors like garments, pharmaceuticals and marine products face thin margins, so a 50 percent duty can wipe out profits.

Indian exporters also fear that U.S. buyers will shift sourcing to countries unaffected by the duties, such as Vietnam or Bangladesh. Supply‑chain managers may prefer to diversify rather than absorb higher costs. Orders for gems, pharmaceuticals and marine products, areas where India has a large share of the U.S. market, have already slowed.

Infrastructure and Workforce Resilience

Despite those headwinds, industry leaders remain optimistic. The CEO of Synergy Marine Group told the Economic Times that India’s expanding port capacity and skilled workforce will help the sector weather the tariff storm. He noted that demand for seafarers with multidisciplinary skills continues to rise, reflecting India’s long‑term strategy to become a global maritime hub. Ports such as Mumbai, Mundra and Visakhapatnam have invested heavily in container handling and logistics, which may help maintain throughput even as certain cargoes decline.

Policy Responses and Negotiations

Indian officials labeled the extra 25 percent duty unfair and hinted that they may seek product‑specific exemptions. KPMG suggested that India could negotiate for certain tariff lines to be removed and provide financial support to export clusters. Because some goods are exempt if they fall under Annex II of Executive Order 14257, Indian exporters are working with customs brokers to re‑classify products where possible.

Comparing the U.S. and Indian Experiences

Tariff Scope and Rationale – The United States uses tariffs as both economic leverage and a geopolitical tool. Reciprocal duties target countries perceived as having unfair trade practices, while secondary sanctions address issues like oil purchases from Russia. In contrast, India is largely on the receiving end; its exporters must deal with a single, large 50 percent tariff on goods bound for the U.S. .The breadth of U.S. duties, covering many partners and products, adds complexity for American importers, whereas India’s challenge is narrower but deeper.

Industry Reaction – U.S. carriers and importers reacted with front‑loading, contract renegotiations and route changes. Many shipments were rushed to beat tariff deadlines, causing congestion and then lulls. Indian exporters, on the other hand, have tried to maintain steady volumes while exploring alternative markets and re‑classifying goods to qualify for exemptions. India’s ports have not recorded significant cargo declines, partly thanks to domestic demand and diversification.

Economic Consequences – In the United States, higher tariffs raise consumer prices and add to inflationary pressures. For Indian producers, tariffs threaten profit margins and could lead to layoffs in labour‑intensive industries. KPMG warned that export reduction could hurt employment and investment in sectors ranging from textiles to pharmaceuticals. The United States may absorb higher prices more easily due to its larger economy, while India’s MSMEs are less equipped to handle sustained cost increases.

Environmental and Logistical Impacts – Tariff‑induced rerouting lengthens voyages and increases fuel consumption. For U.S. operators, shifting away from Chinese ports to Southeast Asia or Latin America may mean different sailing distances and ship sizes. Indian carriers may face empty backhaul challenges if exports drop and imports remain steady. Environmental costs may not be the first concern when tariffs are enacted, but they remain an important long‑term consideration.

Strategic Outlook and Adaptation

For both countries, the tariff wave underscores the need for flexible, resilient supply chains. In the U.S., importers may accelerate “nearshoring” strategies, shifting production to Mexico and Canada to reduce tariff exposure. They may also invest in digital customs platforms to streamline compliance and use free‑trade zones to defer duties.

Indian exporters can pursue several strategies:

·         Market Diversification – Seeking new buyers in Europe, the Middle East and Africa can lessen dependence on the U.S. market. The government’s “Make in India” and production‑linked incentive programs encourage manufacturing for domestic consumption and other export destinations.

·         Product Re‑classification and Exemptions – Understanding tariff codes and qualifying for Annex II exemptions could reduce duty exposure.

·         Value Chain Upgrading – Moving up the value chain (from simple assembly to design and branding) can justify higher price points and absorb tariff costs. Collaborative research and development in pharmaceuticals and electronics could help Indian firms maintain competitiveness.

·         Government Support – Targeted financial assistance to MSME clusters may soften the blow and preserve jobs.

Conclusion

Tariffs have reintroduced volatility into the maritime industry. For the United States, they are a powerful but double‑edged instrument: while intended to rebalance trade and punish geopolitical adversaries, they also raise costs for domestic businesses and consumers and disrupt shipping patterns. For India, the experience underscores both vulnerability and resilience. Despite a steep 50 percent duty on its exports, the country’s maritime trade has remained steady, thanks to robust port infrastructure and a willingness to adapt. Yet micro, small and medium‑sized enterprises face significant pressure, and sectors like textiles and pharmaceuticals risk losing orders.

In the longer term, both nations will need to re‑evaluate their roles in global supply chains. The maritime industry’s future will hinge on its ability to respond to shifting policies, invest in efficient and sustainable operations, and advocate for more predictable trade rules. Whether tariffs prove to be a temporary headwind or a permanent feature of global commerce, the currents of change will continue to shape the ships and ports that move the world.