A.P. Moller-Maersk A/S, the owner of the world’s biggest container shipping line, is paying particular attention to noises coming from the US that suggest the new administration is moving closer to a trade war with China.
US President Donald Trump’s rejection of trade agreements with the rest of North America and Europe have done little to unsettle Maersk’s management.
“But when the talks come to a potential trade war with China, we sit up and listen,” Soren Skou, the chief executive officer of the Copenhagen-based company, said in an interview on Wednesday.
“That would have a very negative effect on our business,” he said.
Maersk, which is trying to split off its energy operations in order to focus entirely on a transport division led by its container shipping line, expects the global shipping market to grow about 2 to 4 percent this year, helping it increase its profit from freighting goods by at least US$1 billion.
However, a full-fledged trade war between the US and China could ultimately make a mockery of such forecasts.
Trump’s rhetoric so far suggests he is ready for battle, with accusations of currency manipulation being hurled at China.
Goldman Sachs Group Inc analysts estimate that if Trump were to impose tariffs against China of up to 10 percent, the country’s exports to the US would fall by as much as 25 percent. That could erode China’s economic growth by as much as 1 percentage point.
The problem with such strategies is that they often provoke retaliation.
The Goldman analysts predict a Chinese response could shave as much as a quarter of a percentage point off US GDP, which means the world’s two largest economies would suffer significant trade-related losses that would undoubtedly have a knock-on effect across the globe.
Maersk, whose most important route is container traffic coming from Asia and bound for Europe, has taken advantage of a consolidation wave in the industry to spread its geographic reach, but even that strategy might prove futile if the whole world sinks into a trade war.
“Nationalism has become a globalized phenomenon and that’s a very ugly development for shipping,” said Peter Sand, chief shipping analyst at Bimco, the world’s biggest shipping organization.
Though a global trade war is not the main scenario, “it’s already clear that we’re seeing an increase in protectionism,” he said.
Sand notes that there are already plenty of signs that trade barriers are an issue. Of the about 3,000 trade restrictions put in place since 2008, the 164 members of the Geneva-based WTO have only removed 740, according to a report published by the organization in December last year.
While the fallout of Trump’s trade policies looks alarming to Maersk, the company is more positive on what it’s hearing on tax proposals coming from the White House.
“The new administration in the US wants lower taxes and it’s also planning huge investments in infrastructure,” Skou said. “And that will, without a doubt, mean more imports for the US, which is good for our business.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained