AP Moller-Maersk, the world’s biggest operator of container ships, is once again sounding the alarm on President Donald Trump’s trade war, saying it’s already having a material impact on global trade and that it could get worse in the coming years.
The Danish firm reported a third-quarter profit of $1.14 billion — beating analysts expectations — but warned that global trade is already feeling the effect of tit-for-tat tariffs between the US and China. Those concerns weighed on Maersk’s share price on Wednesday, with the stock falling about 0.7%.
Global container trade continued to lose momentum in the third quarter. And so far this year, it has suffered “a much slower pace of growth,” rising by 4.2% compared with the 5.8% recorded over the same period in 2017, Maersk said.
Trade tariffs may end up stifling global container shipping by as much as 2% in the next two years. The company estimates that those tariffs make up about 2.6% of the global value of traded goods.
Trade restrictions introduced this year could reduce global container trade by 0.5% to 2% next year and in 2020, the company said.
The US has already introduced tariffs ranging from 10% to 25% on $250 billion worth of Chinese goods entering the US, prompting Chinese policymakers to retaliate, albeit on a smaller scale.
Trump has also repeatedly threatened to place tariffs on all US imports from China, an amount totaling more than $500 billion annually — a move that would most likely slow global trade significantly.
Maersk’s warning is not the first time the shipping giant has weighed in on the trade war. CEO Soren Skou said in August, before Trump hit swathes of consumer goods with levies, that the fallout from the tariffs “could easily end up being bigger in the US.”
During a presentation at Maersk’s global headquarters in Copenhagen, Denmark, Skou said that the negative effect on US trade could be as high as 4% — and particularly acute if tariffs end up being more consumer-focused.
“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, adding, “It will end up being pushed on to the consumer.”