Life below water | United Nations University. Credit: Pichit Phromkade/ILO
By Alfredo Giron
GENEVA, Apr 8 2025 – The ever-evolving tariff agenda has become a leading topic of public discourse and left stock exchanges spinning. Economists almost unanimously agree that the taxes levied on imported goods raise prices for consumers and threaten economic growth. But what seems to rattle forecasters most is the fog of uncertainty they have cast over markets.
Like most markets today, ocean-based economies typically operate in a system designed to maximize profit. However, history demonstrates that the approach often comes with significant social and environmental costs (like pollution and resource depletion) that are not included in prices. In response, governments and communities have begun to develop economies that look at the ocean as an opportunity for growth that balances long-term sustainability.
Ocean-based economies are particularly susceptible to trade disputes. Grocery shoppers, for instance, may be inclined to buy beef or chicken if the price of seafood climbs. In 2018, for example, retaliatory tariffs that China put on US seafood led to double digit price increases.
It is not difficult to imagine how a resulting drop in demand for fish products could then rapidly trickle through a supply chain, which may include wholesalers, truck drivers, processors, and harvesters, when adversaries swap tariffs. Also, fishing gear relies heavily on steel and aluminum, products also facing steep tariffs, which could compound costs passed on to consumers further.
Another sector that is particularly susceptible to tariffs is the decarbonization of shipping and port services. Low-carbon infrastructure is highly dependent on complicated global supply chains for materials and technologies that could face higher levies in a trade war.
Increased costs and any economic slowdown that follows might cause firms to pull back from such projects at a critical moment in the international effort to reduce emissions. The global shipping giant Maersk recently warned that tariffs will “clearly” be inflationary in the short term.
Whether that leads firms to pull back from efforts to decarbonize shipping with technologies like alternative fuels and AI-driven “smart ports” that streamline logistics is harder to say.
Fear over a possible recession could also spook travelers with their eyes on tropical destinations. Many nations have invested heavily in eco-tourism to help protect and restore coral reefs and coastal environments.
A precipitous drop in visitors following the COVID-19 pandemic, for example, left many island nations with large portions of their GDP relying on tourism in a difficult position, with some conservation goals in doubt.
Renewable ocean energy such as offshore wind could also be impacted by tariffs. An analysis by the financial firm Wood MacKenzie found that proposed US tariffs could increase wind turbine costs by 7 percent and overall project costs by 5 percent. It found that rising prices could trigger a 3-9 percent cut in new wind capacity installed annually through 2028 and slow deployment by 20 to 30 percent if the tariffs remain. Offshore wind in US waters has effectively been sidelined for the foreseeable future.
As with any large-scale economic transition, market disruptions can introduce risks with considerable financial implications for the blue economy, and it is important to plan effectively to remain resilient. For example, building sustainable fisheries may require regulatory changes, technological innovations, and shifting consumer preferences; tariffs could complicate each of these areas as businesses and governments weigh costs and benefits.
More specifically, higher costs could incentivize behavior that already plagues global fisheries like unfair labor practices and attempts to skirt environmental rules.
Furthermore, in light of the economic uncertainty tariffs have created, businesses and governments may be less inclined to make investments in expensive gear and scientific research that sustainability programs require. If volatility is bad for conventional capital expenditures, in other words, it is probably especially damaging to new ideas.
However, every challenge offers the possibility of finding a new way forward. As with the pandemic and the global financial crisis before it, the tariff disruptions present an opportunity to invest in new approaches that may not have had the attention of key stakeholders before.
Offshore wind in particular has enormous opportunities to cut emissions and spur economic growth on land. Whether in government or business, leaders today must assess financial risks in light of increasingly destructive extreme weather events, sea level rise, and a level of resource depletion that can no longer be ignored.
New tariffs or not, these climate impacts aren’t going away. An adequate response will require long-term planning with a vision towards building resilient systems and coupled with a serious commitment to balancing economic growth with ocean regeneration.
Alfredo Giron is Head, Ocean Action Agenda and Friends of Ocean Action, World Economic Forum.
IPS UN Bureau
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