The world's biggest shipping company warns Trump's trade war will hurt America more than anyone else
- CEO of Maersk, the world's largest shipping company, warns the impact of President Donald Trump's trade war will be bigger in the US than anywhere else.
- It could knock 4% off US trade annually, Soren Skou said at an event in Denmark.
- The impact would be particularly large if the US attempted to place tariffs on consumer goods coming from China.
The CEO of AP Moller-Maersk, the world's biggest operator of container ships, has warned that President Donald Trump's trade war will ultimately be more harmful to the US 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 outsized 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 will likely fall no more than 0.3%, the negative impact on the USA could be as high as 4%.
"That would definitely not be good," he said.
The impact would be particularly outsized 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. 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," he continued.
So far, tariffs 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 around 20% of the world's seaborne consumer goods, meaning that when it spots a trend, it is highly likely to be impacting the entire industry. So far, Maersk hasn't seen any downturn in trade flows, reporting a 4% increase in demand, Skou said.