American Political Optics vs. Shipping Logic
Leaked messages from the recent “Signalgate” controversy underscore an uncomfortable truth: senior US policymakers continue to misunderstand—or disregard—the structural realities of global shipping.
The subject of the now infamous Signal app group chat of Cabinet-level US officials was the US bombing of the Houthis in Yemen. Since November 2023, Houthis have terrorized commercial vessels in the Red Sea, and so the bombing was supposedly meant to restore safe navigation.
Vice President JD Vance’s remark that “3 percent of US trade runs through the Suez. 40% of European trade does … I just hate bailing Europe out again,” is politically expedient, but economically incoherent. The global shipping network is not regional. It is a single, fluid system with inextricably linked trade lanes. A disruption in one trade corridor distorts pricing, flow, and capacity across the entire shipping network.
Shipping capacity is global, so knock-on effects ripple outward—tightening availability and lifting rates even on trade lanes far from the point of disruption. When vessels reroute around the Cape of Good Hope, transit times everywhere increase, all schedules are disrupted, and the net supply of tonnage shrinks.
And yet, the Trump administration doesn't appear to grasp shipping’s global structure. National Security Advisor Michael Waltz noted, “Per the president's request we are working with DOD and State to determine how to compile the cost associated and levy them on the Europeans.” The suggestion is that Red Sea security is Europe’s problem—and that any US involvement should be transactional.
In actuality, the correlation of container freight rates across different trade routes is undeniable:
Average Container Rates 12 Months Before 2023 Houthi Attacks
Far East to Europe: $850/TEU (Red Sea impacted route)
Far East to West Coast: $800/TEU (Non-impacted route)
Average Container Rates 12 Months After 2023 Houthi Attacks
Far East to Europe: $3,000/TEU (Red Sea impacted route)
Far East to West Coast: $2,400/TEU (Non-impacted route)
