Trump and Shipping
Some may have been amazed at the US’ choice of its new president but the election of Donald Trump did not come as a surprise to all. More importantly Trump’s stated aims in the election process do not necessarily mean a negative effect on all aspects of our industry. In his opposition to some aspects of globalisation, Trump was picking up on a trend that has been gathering momentum around the world – but particularly in the west – since before the New York businessman even entered the race to become head of state. There are many definitions of globalisation and consequently taking an anti-globalisation stance can mean different things to different people. Few object to the type of globalisation that comes as a result of improved transport links allowing for cultural exchanges and tourism, although some do object to the loss of heritage and tradition that can result. What most object to is the ease with which corporations can move their operations to lower cost regions with a consequent loss of employment and standard of living in the former manufacturing base. While there may be some benefits for the shipping industry as a result, for example the movement of consumer electronics and household appliances manufactured from Europe and the US to Asia has meant that shipping space is needed to transport the products to Europe where once no demand existed. The fact is that there has also been a reduction in demand for shipping space to ship the goods out to the areas where they are now produced from Europe or the US. Everything from famous brand soft drinks to motor cars are now manufactured in all corners of the globe despite their western origins. The ability for corporations to move manufacturing has had a definite negative effect on disposable incomes in the developed world. The corporate globalisation movement really took off in the last quarter of the 20th century and it is no coincidence that recent reports in the UK and elsewhere in the developed world suggest that the ‘Millenials Generation’ (those born from 2000 onward) will be the first generation to have lifetime earnings and standard of living below that of former generations. The situation may be different in the developing world but for trade and therefore shipping to continue growing requires constant growth around the globe not just in one or two regions. Rolling back corporate globalisation may be the only answer in the long term. That can be done to some extent by the imposition of tariffs which some in shipping fear but again the effect of such tariffs can easily be affected in both ways by currency exchange rates which themselves have been heavily manipulated over time by countries anxious to secure trade advantages or for protectionist reasons. Some sectors of shipping could even be in for a bonus from Trump’s election. The man has made no secret of his disbelief that fossil fuels are the problem that many have portrayed them to be. It is highly likely that he will be sympathetic to both the coal and oil sectors in the US and will encourage not only a lowering of US dependence on imported fuel but also a resurgence of exports as well. More offshore activity in the Gulf will encourage ships that have recently shifted to the North Sea to return allowing for better prospects for local operators from Norway and the UK. Trump’s vow to reign in the US EPA could also have some effect on shipping regulation. The dual regulation of ballast water requirements by EPA and the USCG for example sometimes led to confusion within the shipping industry over what guidance to follow. If, as some expect may happen, that EPA is relegated to a purely advisory role some of the confusion may disappear. On the other hand such a move could see some individual states such as California taking an independent stance as has been evident in the past. Trump is decidedly cool on climate change matters and is likely to pull out from or just ignore the Paris Agreement on CO2 emissions. That could mean that countries such as China and India no longer feel obliged to support the agreement and it may well die a slow and lingering death. Instead of pushing for shipping to be included, some of our industries own leaders should perhaps wait and see how events unfold. This year has so far proved to be one of momentous changes on a political level and there is every likelihood that the changes so far are just the beginning. No doubt there will be challenges for the industry but there are also almost certainly to be some interesting opportunities as well.