Economists and financial analysts are still trying to piece together the possible long-term effects of a Donald Trump presidency on global trade, and despite clear shipping market jumps, the prognosis for the supply chain in general isn’t good, according to reports.
The clear protectionist and isolationist policies in regard to world trade could be so damaging to global trade it could cause an economic recession similar to the 2008 financial crisis.
His clear disdain for foreign trade, especially NAFTA and TPP, coupled with his apparent “trade war” with both the Chinese and the Mexicans, will see consumer good prices skyrocket and services costs also rise, this will create difficulty in the domestic job market as well as for the rest of the world.
Speaking of damaging economic policies, The Wall Street Journal stated: ‘Consider one of the most extreme moves—that of the 30-year Treasury. An investor who held on to her long bonds lost 6.6% in three days, the worst performance in data stretching back to 1989.’
Macroeconomic policies have been carefully upheld for over 50 years, and Trump's attitude will destroy these policies which have ‘increased worldwide prosperity and positive developments for the US’ according to Business Insider.
The concentration of his policies on free trade is concerning for economists, and with his recent attacks on Mexico, China and Japan (including suggesting up to 45% of tariffs on imported Chinese goods according to the Wall Street Journal) could also undo important diplomatic relationships in the process of destroying trade.
The Chinese economy, especially its world trade, is struggling, a credit bubble has grown within its economy which, if burst, could be much more damaging than the US housing market crash of 2008, Trump's ignorance to the domino effect of his ‘trade war’ could be extremely damaging.
The shipping industry is already suffering a massive slump in the current market, with the collapse of Hanjin Shipping, the largest carrier in the world Maersk reporting record losses and alliances being made all over the industry to prevent more bankruptcy, another deep recession and a massive disruption of global trade could be the nail in the coffin for many shipping companies.
