Donald Trump’s surprise victory in the U.S. presidential election is likely to have implications for the shipping industry. Over the course of the long term, Mr. Trump’s strong inclination towards protectionist trade policies, his support for domestic industries, and the subsequent impact on global shipping and trade, will be things investors much watch out for.
There is little detail about Trump’s trade policy, but his overall protectionist, anti-globalization stance will likely hurt shipping—an industry that thrives on low trading barriers for goods. – Basil Karatzas, New York-based Maritime Ad Adviser
President-elect Trump’s rhetoric in the election campaign might suggest that a continued strategy of “going it alone” to make the U.S. better will only perpetuate an isolationist approach and make United States’ trading compliance more costly and complex. It could also encourage some countries to “de-select” the United States as a trading partner of choice. If the new U.S. administration pushes protectionist policies, major trading partners such as China may do the same.
To allay the fears of investors, particularly those who are investing in shipping containers like me, much of the worry over Trump’s approach stems from “a misquote” that suggested the President-elect would “put a 45% tariff on everything coming out of China.” His actual remarks were more nuanced. Trump was referred to a potential tactic in the event that Chinese currency is undervalued by as much as 45%, and the country is unwilling to negotiate its trade imbalance with the United States.
Also heavily discounted are the chances of a trade war with Mexico. But, with that being said, American officials believe something must be done about a trend that that has seen a U.S. trade balance with Mexico go from an annual surplus of $4 billion-$5 billion before the North American Free Trade Agreement (NAFTA) to a deficit of $1 trillion today.
People say he’ll make World War III in trade and bring about a global depression — that’s not at all what he has in mind. – Wilbur Ross
According to analysts at Bimco’s Shanghai shipowner conference, shipping has less to fear from Donald Trump than from rising Western protectionism and China’s economic influence on the growth of world trade. At the moment, China is the U.S.’ biggest trading partner, with total trade between the two economic giants amounting to $416 billion in 2015-2016.
Business is business and I don’t think Trump wants to be a one term president by upsetting world trade. Like all politicians he has a public negotiating posture and a private posture when he sits down with trading partners. – Robert Bugbee, President of Scorpio Tankers Inc.