Trade War: The Impact of Geopolitical Tensions on Maritime

From marine flashpoints caused by the growing ambitions of various nations to the increasing trend of trade war and trade protectionism, a growing number of potential disruptors can negatively affect maritime trade and increase the risks faced by the global shipping industry.

Naturally, there exists a constellation of present-day geopolitical events and breakthroughs that demand our vigilance. These include the mounting menace of cybercrime, the rise of artificial intelligence, and the collective global response to the spectre of climate change. As a result, it is crucial for organisations seeking to maintain resilience amidst maritime politics to stay well-informed about the continuously evolving global political landscape.

Geopolitical Tensions in the South China Sea

China’s actions in the South China Sea are one alarming development that many experts believe could have a substantial impact on the marine sector. China has long asserted its dominance over the region’s territorial waters, disregarding the claims of neighbouring countries such as Vietnam, Malaysia, and the Philippines.

One example of the most high-profile activity recently on these contested waters is the Chinese-Philippine confrontation on August 5, 2023. It involved a collection of Chinese vessels obstructing a Philippine ship headed towards a military station in the Spratly Islands on a resupply mission. The encounter escalated when one of the Chinese Coast Guard vessels fired their water cannon at the Philippine ship, a clash that bears many implications beyond the immediate incident.

This incident between Chinese and Philippine vessels is far from being an isolated event and is an indication of more extensive strains on maritime politics in the South China Sea, acting as an example that showcases the varied essence of regional altercations and offers insights into China’s strategic methodology and the odds of further escalation. Moreover, the confrontation underlines the urgent need for confidence-building initiatives, further diplomatic discussions, and regional collaboration to foster a stable and peaceful maritime milieu and discourage more hostilities.

Political Status of Taiwan

Apart from the South China Sea geopolitics, the Taiwan problem is another factor in South East Asia’s volatile geopolitical landscape. It presents contrasting scenarios reflecting the deeper complexities of its historical legacies, strategic interests, and regional power dynamics. The Taiwan problem is a long-standing issue that stems from the historical and political conflicts between Taiwan and China and now manifests as a delicate balance maintained only through strategic restraint and careful diplomacy.

Such events are what make the South China Sea an incredibly challenging area, and given its importance as a vital conduit that facilitates over one-third of global maritime traffic, any accidental or miscalculated use of force that results from intimidation and hostilities could bring disastrous consequences.

Market Protectionism

Market protectionism, among the numerous global trends gaining momentum in recent times, has raised significant concern due to its potential to disrupt the growth of international trade, with far-reaching implications in maritime politics. Given the less-than-stellar track records of both the US and EU in this regard, the alarm surrounding this trend becomes readily apparent.

A notable example of this is during the recent COVID-19 outbreak, wherein the World Trade Organization (WTO) reports that its observers and members have implemented as many as 56 trade restrictive measures between Q4 2019 until Q2 2020 that were not related to the pandemic. Many of these measures involved import bans, tariff increases, stricter export custom procedures and higher export duties. In the same report, the WTO estimated that around US$423.1 billion in trade value was affected by said restrictive measures, the third-highest total recorded ever since 2012.

However, even global regulations designed with good intentions, like those imposed on shipping to prevent the spread of COVID-19 during the pandemic and combat the causes of climate change, have the potential to negatively affect the world fleet and increase costs for ship owners and operators. Overall, the problems stemming from the current reality of free trade being no longer what it used to be decades ago are unlikely to let up anytime soon and will continue to pose challenges to international transportation.

Environmental Regulations

The International Maritime Organization (IMO) continues to push out new regulatory initiatives that support its goal of lowering carbon-based emissions in global shipping. These initiatives include increasing fuel efficiency in ships as well as reducing the air pollution and underwater noise they cause.

On top of the IMO’s tightened requirements to meet their reducing at least 50% of greenhouse gas emissions by 2050, there is also the Energy Efficiency Existing Ship Index (EEXI) that will mandate ship owners to modernise their existing vessels or replace them with new ones starting January 1, 2023.

A recent report by ABS, an American classification society, delved into the potential impact of these regulations. Their assessment revealed that approximately 85% of the world’s existing tanker fleet could encounter challenges in meeting compliance, with indications pointing toward similar difficulties emerging across other segments of the shipping industry.


The global maritime sector finds itself at a pivotal crossroads, confronting a multitude of pressing issues that necessitate urgent consideration and strategic forethought, notably those linked to the geopolitical dynamics of the South China Sea. As we gaze into the future, it becomes evident that the global maritime industry must maintain a state of vigilance and proactive engagement.

Adapting to evolving geopolitical landscapes, addressing protectionist threats, and meeting stringent environmental regulations are all pivotal steps toward securing a prosperous and sustainable future for maritime trade. Only through foresight, cooperation, and a commitment to innovation can the industry continue to thrive in these uncertain times.

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