Overview Of The Trade War And The Effect On Shipping

Overview Of The Trade War And The Effect On Shipping
04/07/2018

The trade war is a speeding train, accelerating with every trade-restrictive retaliatory measure imposed and becoming ever more difficult to stop. The long-term effect provides uncertainty and could possibly derail current global growth if the measures are kept or further escalated. Even though the world’s three largest economies are involved, the effect on shipping, in terms of volumes, is somewhat limited.

BIMCO’s chief shipping analyst Peter Sand comments “The trade war adds painful uncertainty for the shipping industry, as it distorts the free flow of goods, changes trade lanes and makes it difficult for ship operators and owners to position ships efficiently in the market.

The dry bulk shipping industry has already been affected by the steel and aluminium tariffs and will be hit again when further tariffs come into force in July. However, the impact on the dry bulk shipping industry in terms of volumes remains limited.

The same can be said for container shipping, which although containerised goods have been and will be targeted again in July, the number of containers impacted is in the big picture relatively small”.

The dry bulk shipping industry will by far be the most affected in terms of volumes, both in scheduled and already implemented tariffs. However, the dry bulk products targeted so far only represent a minimal amount of the total seaborne dry bulk trade. Similarly, the containerised goods affected also represent a small amount of the total containerised trade.
The US: effect on shipping remains limited

On 8 March 2018, the US imposed 25% tariffs on steel and 10% tariffs on aluminium citing national security reasons. At first, temporary exemptions were granted to seven trading partners. However, these were revoked for the EU, Mexico and Canada as of 1 June 2018. Australia, Brazil, Argentina and South Korea remain exempted.

Following failed talks between the US and China which sought to avoid further tariffs, the US announced in late May, that it would proceed with 25% tariffs on USD 50 billion worth of Chinese goods. The first list of these goods, containing mostly machinery and electronics, worth USD 34 billion, will enter into force on 6 July 2018. The second list, considering Chinese imports valued at USD 16 billion, contains commodities such as plastics and oil products and is currently under review with no date given for its possible entry into force.

continue...https://www.hellenicshippingnews.com/overview-of-the-trade-war-and-the-e...