Chinese shipping forum voices concerns as Trump extends tariffs

Xu Lirong, chairman of state conglomerate China Cosco Shipping Group, warned at the 2018 China Maritime Forum on Wednesday that the friction between the world’s two largest economies was casting shadows over the prospects for his industry.

The trade dispute “has created a lot more uncertainties to the recovery of shipping”, he said.
Washington and Beijing have decided to impose 25% tariffs on $50bn-worth of goods imported from each other, with $34bn of those levied on July 6 and the remainder expected to take effect next week.

Capt Xu cited Clarskons estimates, saying that the tariffs already in place would affect about 1% of global seaborne trade volumes.

 “Not only carriers, but also ports, logistics firms, shipbuilders and other shipping-related companies will be affected. So we are against any form of unilateralism and trade protectionism.”

Drewry senior analyst Neil Davidson forecast a healthy 5.7% average annual growth in global container traffic in the next five years — assuming there is no extreme trade war.

When factoring in the negative impact, the worst-case scenario — based on an escalation of 25% US tariffs to $450bn-worth of Chinese exports — would be a decline in China-US eastbound container traffic by approximately 15%-20% from the current level, according to Mr Davidson.

The remarks came following an announcement by the US Trade Representative Robert Lighthizer on Tuesday.

The administration said that President Donald Trump had ordered preparations to begin for 10% levies on an additional $200bn of imports from China, as a result of Beijing’s “retaliation and failure to change its practices”.

A long list of products that might be targeted was published at the same time.

Such a move was “completely unacceptable”, said the Minister of Commerce in Beijing in a statement, adding that China would be forced to take retaliatory measures while bringing the case to the World Trade Organisation in the interests of its people.

A senior executive from a major Chinese port said on the sidelines of Wednesday’s conference that the tariffs in force would begin to take a toll on throughput towards the end of this year, because there is usually a lag of a few months before any impact is felt.

He added that the gateway ports in China would bear the brunt, while transhipment ports, such as Singapore, would be less affected in volume terms as the US is expected to shift part of its trade to other countries. 

 “We can only hope that the trade war won’t get uglier,” the executive said.

Speaking as a special guest at the forum, China’s Minister of Transport Li Xiapeng reiterated that his country advocated open economies and free trade.

Source: Lloyd’s List