Trump Trade Stance Threatens Billion Dollar Terminal

 18 May 2017     Carriers, Maersk, Global Economy/Trade, Politics, Port Governance, Port Planning, Ports, Shipping

Latin America’s most technologically advanced shipping terminal Lázaro Cárdenas faces an uncertain future after a strong start to its operations due to threats from President Trump to penalize manufacturers that move operations to Mexico, according to WSJ.

Major importers view Lázaro Cárdenas as a key link between Asia’s factories and Mexico’s growing middle class and hope to use the port as a backdoor to the US to bypass congested West Coast ports.

But APM Terminals’ plan to rival the Port of New York and New Jersey by the end of the next decade may now be an unrealistic target as Republicans in Congress have floated a ‘border-adjusted tax’ that would raise the cost of imports.

Trump also plans to renegotiate the North American Free Trade Agreement.

Shipping companies and analysts have been warning that any of these measures could deal a blow to US-Mexico trade.

Mexico’s imports have grown more than 30% since 2010, according to the World Bank, and container volumes are up 60% in the past three years at Lázaro Cárdenas’ older facilities, according to trade data firm Panjiva.

Maersk Chief Executive Soren Skou has said that the main purpose of the terminal is to be a gateway terminal for the Mexico City market.

In an interview this month, Skou said: “The US administration has made a number of statements that impact our business on the positive side.

“Then there are the discussions about trade deals, and some of the rhetoric seems more protectionist.

“It’s really hard for us to judge how this will affect our business.”

Technical Paper: Unleashing Latin America’s Potential