The Daily View: Buckle up; it’s going to be a bumpy ride
Your latest edition of Lloyd’s List’s Daily View — the essential briefing on the stories shaping shipping
THIS time it’s different’ is a phrase that rarely bodes well for shipping.
In the case of Donald Trump’s second term in office there is every reason to believe that the sequel will be significantly more consequential.
Uncertainty seems to be the default assumption as the world braces itself for what happens next, but it seems clear that Trump intends to use his control of Congress and his popular mandate to maximum effect this time round.
The spectre of tariffs looms large, but separating campaign rhetoric from reality leaves everyone guessing where the numbers will fall. Claims have ranged between 20% to 2000% depending on which rally you were listening to.
Whatever the initial spikes in rates that are likely to follow, the overall assessment for shipping is negative. We don’t know the extent of retaliatory trade skirmishes that will ensue, but to the extent that international seaborne trade will suffer, this is not going to play out well for shipping in the long run.
And don’t forget that on a domestic level at least, tariffs will likely lead to higher consumer prices and act as drags on investment and growth.
Yes, shipping has benefited from such disruptions in the past, but disruption is only profitable for so long. A little bit of chaos is profitable. Long-term unpredictability at this level is in nobody’s best interest.
This is not just about America — Trump’s victory has changed the game on everything from trade to climate negotiations.
While an immediate derailment of shipping’s net zero ambitions is unlikely to be a casualty of a US retreat from global climate diplomacy, it will ripple through the system in unpredictable ways.
Will China take up the mantle of climate leader as US retreats? Will the EU be inspired to commit finally to its own Inflation Reduction Act investment programme? Or will the US retrenchment simply provide political cover for laggard countries to stall new climate action?
Right now, we don’t have much more than uncertainty to rely on. Buckle up; it’s going to be a bumpy ride.
Richard Meade
Editor-in-chief, Lloyd’s List