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The Daily View: Buckle up

 

Your latest edition of Lloyd’s List’s Daily View — the essential briefing on the stories shaping shipping

AND SO it begins. Donald Trump’s first day in office may have offered up fewer surprises than anticipated, but as the opening salvo of executive orders flew, a period of extreme uncertainty for global trade was ushered in.

What that looks like depends on where you sit, geographically as much as politically.

US allies in Europe and South Korea remain the most pessimistic about the incoming president, according to a survey by the European Council on Foreign Relations.

As if to illustrate the findings, European Commission president Ursula von der Leyen issued a stark warning on Tuesday that the world economy had “started fracturing along new lines”.

Her distaste at the prospect of Trump’s sweeping tariffs on the bloc came as little surprise to the World Economic Forum crowd listening to her speech in Davos. But European anxiety about the disintegrating liberal international order is far from universal.

Asked whether they thought the election of Donald Trump was a good or a bad thing for their country, 84% of Indians, 61% of Saudi Arabians, 49% of Russians and 46% of Chinese said yes, it was a good outcome for them.

That Trump yesterday reiterated his campaign pledge to slap tariffs of 100% on members of the BRICS group of countries, which includes Brazil, Russia, China and India, may yet reverse such positive polling once the rhetoric gives way to action.

But for the moment, the concept of trading partners and allies is very much in flux.

While von der Leyen was warning the few business leaders not invited to the inauguration that it was in “no one’s interest to break the bonds in the global economy”, Vladimir Putin and Xi Jinping were busy pledging to boost co-operation between Moscow and Beijing.

And as the US hastily retreats from global institutions (such as WHO, which was a surprise, not just Paris Agreement, which wasn’t), and starts displaying aggression towards those who were previously assumed to be allies (Mexico, Canada, Panama, Mexico and Denmark) in addition to perceived enemies (China), the question is what happens next?

A case of a superpower intentionally accelerating a decoupling from the global agenda?

Buckle up, the rollercoaster is on its way. As the Economist put it earlier today — this promises to be a stomach-churning ride for the global economy.

Richard Meade
Editor-in-chief, Lloyd’s List

Click here to view the latest Lloyd’s List Daily Briefing

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