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Trade war harmful, clearly bad for global shipping: BIMCO

BIMCO has come out with a statement against US-led protectionism and warned about the threat of a damaging trade war as imports tariffs on steel and aluminium announced earlier this month are set to enter into force.

“The Trump administration seems positive towards protectionism,” BIMCO warned, noting that US President Donald Trump’s pro-trade chief economic adviser Gary Cohn had resigned because of the tariffs imposed on steel and aluminium.

While acknowledging that the tariffs on steel and aluminium will have a limited impact on most international bulk trades, BIMCO cautioned that “they could trigger something bigger that would negatively impact global shipping in a much wider way including container shipping trades”.

“Free trade provides prosperity and peace. It’s a fundamental principle to cherish and safeguard. All trade-restrictive measures are in principle bad for shipping,” reiterated BIMCO chief shipping analyst Peter Sand.

Releasing its statement just slightly ahead of Trump’s latest package of $60bn worth of tariffs on Chinese goods, including high-tech products, BIMCO said: “Steel and aluminium tariffs may be ‘dish of the day’ and the impact on shipping is still unknown, but soon major trade action against China is also likely to come from the US. Despite the fact that there is good reason – violation of intellectual property rights – the result is the same. It is damaging for the involved countries.”

BIMCO noted that the US has large trade deficits with the EU and China as well as significant trade deficits in goods with Mexico, Japan and Canada. “But starting a trade war is the wrong way to handle the situation,” it reiterated.

“The international atmosphere is full of threats of retaliation and it appears likely that major trading partners with the US like the EU and China will hit back to draw a line in the sand for the US Administration and President Trump,” BIMCO warned.

“Overall we are seeing more trade-restrictive measures introduced. Some more high profile than others. This is a worrying trend that limits demand for shipping globally. Even worse for shipping could be short-sighted political positions that may have lasting consequences for everyone involved in global industries like shipping if a largescale trade war emerges,” Sand concluded.

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