China trumps US in tariff war – Maersk CEO
16 Nov 2018 - by
Maersk’s CEO Soren Skou has used shipping data to prove that US President Donald Trump has failed in his mission to wean America off Chinese goods through the imposition of punishing tariffs.
According to Skou, Chinese exports to the US actually grew 5-10% last year, whereas the reverse has been true of the States which has recorded a 25-30% drop in exports to China.
Speaking to journalists in Copenhagen, the leader of the world’s largest shipping company said that whilst China’s retaliation tariffs appeared to have had the desired effect of limiting US exports to that country, American imports of Chinese goods had actually risen.
Skou proposed two explanations for this “ironic development”.
Firstly, the US economy is doing so well that consumers can actually afford to pay more for duty-subjected goods brought in from China.
Secondly, US companies have been hoarding Chinese goods prior to tariffs taking effect.
Taking a deeper look at America’s seemingly short-sighted tariff tactics, Skou said Trump was fighting an “’asymmetric battle, because China has a lot more clout than the US when it comes to telling corporations how to act.
“Donald Trump can’t tell Nike, Walmart and The Home Depot that they can’t import from China. So they will continue to import and will work on solutions and they may be hit a bit on their margins.”
In comparison to the same situation facing companies in China, Skou said “state-controlled companies don’t need many signals from Beijing to lower their imports from the US.”
In addition to the emerging picture of Trump not seeing all the angles, Skou reiterated a widely held, well-supported notion – that China appears to be finding it much easier than the States to seek substitutes for goods exposed to tariffs.