The U.S. economy will be hit many times harder than the rest of the world by an escalating global trade war, according to the chief executive officer of A.P. Moller-Maersk A/S.
Soren Skou, who runs the world’s biggest shipping company from Copenhagen, said the fallout of the current protectionist wave “could easily end up being bigger in the U.S.” Tariffs could slow global annual trade growth by 0.1 to 0.3 percent, though for the U.S. the effect could be “perhaps 3 or 4 percent,” he said at Maersk’s headquarters on Friday. “And that would definitely not be good.”
The company transports about 20 percent of the world’s seaborne consumer goods, putting it in a unique position to gauge the fallout of tariffs on trade flows. Maersk has in the past broken with its culture of steering clear of any political debate to criticize the trade policies of U.S. President Donald Trump.Previously:
Maersk focuses on trade flows between Europe and Asia and so far its industry hasn’t been directly hurt by tariffs. In fact, demand grew 4 percent in the second quarter. But Skou says that may change if the U.S. starts targeting consumer goods.
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“The first thing the American importers would do if tariffs are put on Chinese consumer goods would be to buy in Vietnam, in Indonesia or elsewhere in Asia,” Skou said. “Big U.S. consumer brands like Nike produce in all of Asia, not just in one country, so there will be a substitution effect.”...MORE
July 23
Shipping: "Amid Trade War, Rare Hedge Fund Bet Targets the World’s Biggest..." (MAERSKB:DC; AMKAF)
In the month since that post the shorts have seen the stock
trade up from 8,346 DKK to 8,794 at Friday's close
"World’s Biggest Shipping Company Already Feeling Pain from Trade War"
Ditto, but from 7,596
May 18 Signposts: "Maersk warns on trade risks as disappointing first quarter earnings hit share price"
By 1241 GMT the shares were down 8.8 percent at 9,262 Danish crowns.
