The CEO of AP Moller-Maersk, the world's biggest operator of container ships, has predicted that President Donald Trump's trade war will harm the US more than any other country.
Speaking at Maersk's global headquarters in Copenhagen, Denmark, Soren Skou said the US-led conflict, which has seen Washington and Beijing exchange numerous rounds of threats about tariffs, is likely to have the biggest downsides in the US, thanks to its outsize reliance on foreign-produced consumer goods.
Fallout from the tariffs "could easily end up being bigger in the US," Skou told the audience during his presentation, arguing that while global trade would most likely fall by no more than 0.3%, the negative impact on US trade could be as high as 4%.
"That would definitely not be good," he said.
The impact would be particularly outsize, he said, if the US started to place tariffs on consumer-focused goods.
"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 US consumer brands like Nike produce in all of Asia, not just in one country, so there will be a substitution effect," he continued. "You can’t get Nike sneakers or iPhones that are produced in the US. So it will end up being pushed on to the consumer."
So far, the tariffs that have actually been implemented have focused largely on industrial goods, but it is not impossible that Trump could look to hit more consumer-focused products, especially given the tit-for-tat nature of the trade war so far.
AP Moller-Maersk controls the shipping of about 20% of the world's seaborne consumer goods, meaning that when it spots a trend, it is highly likely to affect the entire industry. So far, Maersk hasn't seen any downturn in trade flows, reporting a 4% increase in demand, Skou said.
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