Commercial imperative outweighs US friendshoring amid escalating tariff realities

The ongoing US-China trade dispute has already caused substantial changes in transhipment patterns, with goods rerouted through third countries such as Vietnam. Despite these headwinds, JP Morgan’s decision is rooted in commercial pragmatism. It is also important to say no blanket US prohibition exists for American companies contracting with Chinese shipyards for globally operating vessels.

Chinese yards remain the dominant force in global shipbuilding, having captured every newbuilding order in the initial weeks of 2025, totalling over US$900M. Their appeal stems from cost competitiveness, proven technical expertise, and crucially, available delivery slots. China is recognised at the forefront of shipbuilding innovation and possesses vast manufacturing capability. The new methanol-fuelled vessels represent JP Morgan’s first investment in this technology, directly supporting client decarbonisation goals with a nearly 100% CO2 reduction (tank-to-wake). Chinese yards are increasingly capable of delivering such new, greener vessels at scale and with advanced technology.

The JP Morgan order reflects the global nature of shipping finance and the necessity to meet client demands, even if it means operating against prevailing nationalistic rhetoric. Interestingly, the order comes at a time when there is (unverified) market speculation that a major international institution may be participating in an ongoing tender for shuttle tankers intended for operation in Brazil. According to these rumours, one of the vessels could be constructed at a shipyard that has been referenced in recently proposed US legislation as a matter of concern.