ICS Warns of Isolationism's Risk to World Trade
In a speech in Tokyo on Tuesday, International Chamber of Shipping chairmen Esben Poulsson pushed back against the Trump administration's tariff policies and emphasized the benefits of free commerce between nations.
"The view that international trade can be seen as some kind of zero sum game is demonstrably false," Poulsson said. He suggested that the White House's concerns could be best addressed through existing institutions, especially the WTO. "We note that of more than 100 trade complaints which the U.S. has so far brought to the WTO for adjudication – more cases than put forward by any other country – the United States has won over 90 percent," he said.
Shipping is inextricably tied to the flows of international trade, and it has benefited greatly from globalization. Since 2008, the year that the Great Recession began, maritime transport demand has climbed by one third, buoyed upward by growth in emerging economies like China. These nations now account for more than half of international demand for shipping, according to ICS.
"As the servant of world trade, I do think our great industry has a duty to explain the negative implications of policies that may seriously damage long term economic development," Poulsson said. He warned that current American policies challenge the existing trading order and "a system of international rules and norms which has brought peace and prosperity since World War Two."
The administration's trade war with China and its tariffs on aluminum and steel also have implications at home, for seaports, retailers, manufacturers and oil and gas interests. The American Petroleum Institute, which strongly supports the administration's E&P policies, has warned that tariff-driven trade policies "run counter to enhancing [U.S.] energy dominance throughout the world."
China was until recently the largest overseas buyer of American oil export shipments. In August, its imports fell from about 350,000 bpd to zero, according to BIMCO, as Beijing imposed retaliatory tariffs on American goods. China wasn't the only buyer to cut back: exports fell by a combined 1.3 million bpd in July and August, the largest two-month decline on record. "The trade war appears to be limiting the United States’ access to crude export markets, or at least temporarily shifting global buying patterns," said API chief economist Dean Foreman in a recent update.