The election of Donald Trump as president elect has thas caught the world off guard. The shipping industry is particularly feeling the effects of America’s decision to elect Donald Trump, as the realities of his campaign promises involving anti-trade rhetoric and protectionism begin to materialize.
Few details were provided in Trump’s 100 day plan regarding trade policies, but the situation has the potential to become alarming, as ship operators are dealing with the worst down-cycle in 30 years. His overall protectionist, anti-globalization stance, has the potential to be detrimental to the industry as a whole, however, as always the devil is in the details and it depends on what is actually passed into law.
TPP and Trump
Donald Trump has repeatedly criticized the Trans-Pacific Partnership, a trade agreement to lower or eliminate tariffs between the U.S. and 11 other countries. Overall, TPP’s goals is to: promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in the signatories’ countries; and promote transparency, good governance, and enhanced labor and environmental protections.
The controversy surrounding the benefits and drawbacks of TPP is based on conflicting studies. Critics of the TPP, such as Senator Bernie Sanders, argue that trade agreements like the TPP “have ended up devastating working families and enriching large corporations.”
President Obama has argued “if we don’t pass this agreement—if America doesn’t write those rules—then countries like China will.” According to the Congressional Research Service, “many Asian policymakers—correctly or not—could interpret a failure of TPP in the United States as a symbol of declining U.S. interest in the region and inability to assert leadership… failure to conclude TPP could, in effect, allow China to shape regional rules of commerce and diplomacy through its own trade and investment initiatives, potentially creating regional rules and norms less beneficial for U.S. interests.”
Moving Forward in January
As the day president elect Donald Trump is inaugurated moves closer, industry analysts are concerned on how extreme Trump’s new administration will push their protectionist policies, and if major trading partners, such as a China, will do the same.
The U.S. has the responsibility to uphold global standards, and be a leader in the shipping realm. The world’s largest operators will be counting on the U.S. to pull them out of the looming crisis, as growth prospects in the U.S. are stronger than in Europe and most of Asia.
One of the the greatest risks to the shipping industry would be if Trump disrupts the agreements already in place, and instills new protectionist agreements, prohibiting or limiting trade with countries we have already been trading with. The risk is in the inevitable ripple effect of other countries taking similar actions.
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