by John D. Padgett, Partner, McGuireWoods LLP
Tariff policies may seem like distant political maneuvers, but for Hampton Roads, they hit close to home. As a region deeply tied to global trade, the potential shifts in international commerce driven by tariffs have profound implications for local jobs, infrastructure and prosperity. The Port of Virginia, a major economic engine, and the robust transportation network it supports must navigate the uncertainties tied to the United States’ tariff policies. With the federal government leveraging tariffs as a foreign policy tool, Hampton Roads faces both challenges and opportunities in the evolving global trade landscape.
The Port of Virginia
The Port of Virginia is central to Hampton Roads’ economy, enabling the region to thrive as a hub for international commerce. In its “State of the Port 2024” presentation, port leaders projected moderate growth in container volumes but cautioned that renewed tariffs could dampen shipping activity. Over the past decade, the port has invested heavily in modernizing terminals, deepening channels, and improving cargo-handling capabilities to accommodate increasing trade. Yet, new tariffs or retaliatory measures from trading partners could reduce trade volumes, potentially undercutting these investments.
Diversifying trade partnerships and collaborating with other East Coast ports are essential strategies to manage such disruptions and sustain the port’s competitive edge.
Rail Transport
Norfolk Southern, one of the nation’s largest rail carriers and a key regional employer, is also grappling with uncertainties tied to tariffs. The rail operator connects maritime cargo from Hampton Roads to inland markets, and its intermodal operations are particularly susceptible to changes in trade policy. Recent earnings reports highlight muted volume expectations driven by geopolitical tensions and soft economic conditions. A downturn in international trade could significantly affect the rail sector, which relies on consistent container volumes for profitability.
Trucking
Hampton Roads is equally dependent on trucking and logistics to move goods inland. Local trucking companies, responsible for transporting goods from port terminals to distribution centers across the Mid-Atlantic, face significant risks from tariff-induced disruptions. Tariffs on imports such as steel, aluminum, and electronics could slow container flows, leading to reduced shipment numbers, unused capacity and fewer driving hours. Logistic leaders have already voiced concerns about how sudden changes in trade policy can create ripple effects, causing port congestion or forcing costly adjustments in freight movement.
What’s at Stake?
The broader economic footprint of the port, rail, and trucking sectors underscores the stakes for Hampton Roads. According to the Dragas Center for Economic Analysis and Policy at Old Dominion University, the Port of Virginia supports 565,000 jobs and generates $41 billion in compensation. These numbers illustrate how trade fluctuations directly impact the region’s economy, from large-scale manufacturers relying on imported parts to small businesses near the port that depend on steady supply chains. A recent study from the College of William & Mary confirms that the port’s influence extends well beyond Hampton Roads, connecting the region to North American and global markets.
Critics of tariffs argue that they serve as hidden taxes, raising costs for businesses and consumers while inviting retaliatory measures from trading partners. Proponents contend that tariffs can shield domestic industries from unfair competition and act as leverage in trade negotiations. For Hampton Roads, which sits at the crossroads of global shipping lanes, the stakes are particularly high. Every container rerouted or shipment delayed represents lost revenue for port services, reduced rail carloads, and fewer trucking runs. The interconnectedness of these sectors means that disruptions in one area can ripple through the entire regional economy.
Challenges and Resilience
Despite these challenges, Hampton Roads has a history of resilience. The Hampton Roads Planning District Commission’s 2024 Economic Forecast highlights how infrastructure improvements and collaboration among industry leaders have helped the region weather prior trade policy shifts. Local officials have been proactive in lobbying federal policymakers to recognize Hampton Roads’ vital role in national commerce. Port leaders, too, are committed to attracting new shipping lines and upgrading technology to ensure smooth cargo flow, even amid potential trade disruptions. These efforts demonstrate a commitment to adaptability and long-term growth, essential traits for navigating an uncertain global trade environment.
As Washington continues to use tariffs as a strategic foreign policy tool, Hampton Roads stands at a critical juncture. The region must balance immediate risks with opportunities to strengthen its position as a global trade hub. For a community that thrives on international commerce, maintaining a steady focus on infrastructure investment, policy advocacy and collaboration will be key. The livelihoods of countless Virginians—and the overall vitality of Hampton Roads—depend on the region’s ability to rise to the challenges posed by the shifting tides of global trade.
