Experts: Geopolitical tensions disrupting global supply chains

Mounting geopolitical tensions in the Middle East alongside shifting US trade policies are deepening uncertainty across global supply chains, with shipping executives and analysts warning that volatility in diplomacy and energy markets is reshaping trade flows, costs and long-term investment planning.

At a media briefing at the Port of Los Angeles on Monday, industry leaders pointed to the widening ripple effects of strained US-Iran relations and broader instability in the region, which they said are disrupting key maritime routes and intensifying pressure on already fragile global logistics networks.

"Every day going through that 21-mile Strait of Hormuz is about 100 to 110 vessels. That's all been stopped since February 28, save a few ships that made it through," said Gene Seroka, executive director of the Port of Los Angeles.

Jerrold Green, senior fellow at the UCLA Burkle Center for International Relations, criticized the lack of substantive progress in recent US-Iran negotiations, including a weekend of extended talks led by Vice-President JD Vance that reportedly lasted 21 hours without agreement.

"That is really not a negotiation. That's a reading of terms that were not accepted," Green said, arguing that effective diplomacy requires "back and forth, a willingness to make concessions, horse trading and all of that."

The disruptions have also contributed to shifting global shipping patterns, including declining traffic through traditional chokepoints such as the Suez Canal, long considered a vital artery of global maritime commerce. As fuel costs rise and routing uncertainty increases, cargo flows are increasingly being redirected toward US West Coast gateways, including the Port of Los Angeles, reshaping and disrupting established logistics networks, according to Seroka.

Responding to a China Daily question on the feasibility of the Trans-Pacific Green Shipping Corridors amid geopolitical instability, Seroka stressed that infrastructure transformation operates on a fundamentally different timeline than political cycles.

The corridor was launched in 2023 to help accelerate zero-carbon shipping between Asia and North America.

"Most of this work that we do here at the port … takes years, and in some cases, decades," he said. "It's never a straight line."

However, he acknowledged that shifting trade policies and geopolitical disruptions can significantly alter the trajectory of sustainability efforts.

"All of that gets thrown into the soup, and it makes it taste very different than it did before," Seroka said, while emphasizing that the port continues to advance its transition toward zero-carbon shipping and long-term environmental goals.

Seroka also noted that the transition has become increasingly difficult under current global conditions, saying the "proposition" of decarbonization is now more complex amid rising energy costs and trade uncertainty.

Economic pressures are also being felt on the ground in Southern California. Diesel prices in Los Angeles have surged to between $7 and $8 per gallon ($1.85 to $2.10 per liter), squeezing small trucking firms that form a critical backbone of port logistics. Meanwhile, agricultural exports have come under pressure, with US soybean shipments to China declining amid broader tariff-related tensions and shifting global sourcing patterns.

Green, who has lived and worked in Egypt, Iran and Israel, said his regional experience has shaped his concerns about long-term instability in the Middle East.

"It seems to me that the Middle East and therefore the world has changed permanently, and even if we try and go back to where we were, it simply won't be possible," he said.

He added that the scale of disruption in maritime logistics is significant, noting that prolonged instability has already removed thousands of vessel movements from key shipping lanes.

"There are massive uncertainties," Green said. "And for me, a massive uncertainty is a potential loss. It's not a good thing."

Green also described the Port of Los Angeles as a strategic economic hub for California, calling it "the carotid artery of the entity with the fourth largest economy in the world," while warning that mounting global uncertainties are directly shaping regional economic performance.

He pointed to volatility in energy and transportation trends, including fluctuations in electric vehicle demand driven by oil prices.

"Electric cars are out of fashion … back and forth, caroming back and forth. Now they're back because of the price of petroleum," he said, adding that such shifts affect not only US industries but global consumers. "Consumers in every country in the world are being touched by this."

Seroka further warned that persistent policy and geopolitical uncertainty is constraining business planning across sectors. He said hiring has remained soft for more than a year, and inflation, while not runaway, remains above desired levels, contributing to cautious corporate investment behavior.

"The American consumer seems to be so consistent in their buying patterns," Seroka said. "At some point, I would think that's going to tip, too."

Green echoed similar concerns, warning that the current conflict in the Middle East underscores the fragility of long-term planning.

"This war came out of nowhere. Nobody predicted it, nobody expected it, and it was a body blow," he said.

"There are massive uncertainties … and massive uncertainty is a potential loss," he said.