Speaking at Maersk’s global headquarters in Copenhagen, Denmark, Soren Skou said the US-led conflict, which has seen Washington and Beijing exchange numerous rounds of threats about tariffs, is likely to have the biggest downsides in the US, thanks to its outsized reliance on foreign-produced consumer goods.
Fallout from the tariffs “could easily end up being bigger in the US,” Skou said during his talk, arguing that while global trade would most likely fall by no more than 0.3%, the negative impact on US trade could be as high as 4%.
The effect would be particularly outsized, he said, if the US started to place tariffs on consumer-focused goods. “The first thing the American importers would do if tariffs are put on Chinese consumer goods would be to buy in Vietnam, in Indonesia, or elsewhere in Asia,” Skou said.
“Big US consumer brands like Nike produce in all of Asia, not just in one country, so there will be a substitution effect,” he continued. “You can’t get Nike sneakers or iPhones that are produced in the US. So it will end up being pushed on to the consumer.”
Businessinsider.nl reports that so far, the tariffs that have actually been implemented have focused largely on industrial goods, but it is not impossible that Trump could look to hit more consumer-focused products, especially given the tit-for-tat nature of the trade war so far.
