Hope for a cease-fire in America’s multi-front trade war has dimmed after a barrage of hawkish new U.S. statements toward China, France, Brazil and Argentina. For ocean shipping, fallout suffered in 2019 now appears likely to extend well in 2020 — not just in terms of lost demand, but also, lost investor interest.
U.S. President Donald Trump said on Dec. 3, “I think it is better to wait until after the election [to conclude a China trade deal] if you want to know the truth.”
In an interview with CNBC, U.S. Commerce Secretary Wilbur Ross said that waiting until after the November 2020 presidential elections “takes off the table something that they [the Chinese] may think gives them some leverage.”
On Dec. 2, Trump said that the U.S. would raise tariffs on steel and aluminum imports from Brazil and Argentina. The two countries had been on the original tariff list in 2018 (25% steel, 10% aluminum) but those levies were never imposed after both negotiated quotas. Trump claimed his latest decision was in response to currency manipulation by the two South American countries that hurt American farmers.
Also on Dec. 2, the Trump administration threatened to impose a 100% tariff on $2.4 billion of French exports including wine, cheese and handbags in retaliation for a French digital services tax on U.S. technology companies.
Trans-Pacific Shipping Impacts
The effects of U.S.-China trade tensions are already clearly apparent in the trans-Pacific container trade.
France-based consultancy Alphaliner has estimated that this market will experience a 2% year-on-year drop in volume, the first such decline since 2009 when the financial crisis struck.