Car Carriers' Outlook Dims With New U.S. Auto Tariffs

U.S. auto tariffs are taking a toll on the outlook for many foreign automakers, but are also having an effect on the companies that carry their goods to market - the pure car and truck carrier (PCTC) ro/ro operators.

Share prices for the publicly-traded car carrier owners have taken a dive since the White House announced new 25 percent tariffs on Wednesday. Hoegh has fallen 10 percent since the start of the week; K Line is down by four percent; Wallenius Wilhelmsen is down nine percent; and Hyundai Glovis is down by nearly 10 percent. These firms have had solid financial success over the past few years thanks to booming exports out of China, but a contraction in the U.S. import market could weigh heavily on their prospects.

Trade data shows that automakers appear to have anticipated new tariffs and frontloaded their shipments in the first quarter of 2025. According to ship tracking firm Esgian, five extra ro-ro shipments departed Europe for the U.S. in February, and eight extra out of East Asia in January (compared to the same periods last year).

The tariff threat would primarily affect seaborne trade lanes out of South Korea, Japan and Europe, the primary overseas sources of U.S. autos. China sells relatively few complete cars into the U.S. market, capturing a market share of less than two percent, and will be less affected by U.S. auto tariffs.

But foreign PCTC owners still have a tough road ahead in the Chinese market. The world's leading car exporter is building its own national car-carrier fleet to compete with longtime industry incumbents. According to Li Gang, Communist Party committee chair for China Citic Financial Leasing, the "national vehicles and national transport" strategy will reduce shipping costs and ensure capacity for Chinese automakers.