Trump Victory Creates Uncertainty for Global Trade

DONALD Trump’s surprise victory in the US presidential election sent shockwaves across financial markets on Wednesday, and is likely to have implications for the shipping industry.

News ID: 70218

Date: 10 November 2016 - 11:39

According to MANA, stock markets have seen a global sell-off, investors have bailed out of risky assets such as oil, and prices of safe haven investments such as gold have soared. Clearly, much of the immediate market reaction is due to the uncertainty surrounding a Trump administration’s economic policies.

“That uncertainty stems from several factors, including the lack of specificity that has been provided, the lack of experience Mr Trump has as a policy maker, who would serve in President Trump’s administration and the extent to which Congress allows these policies to be enacted,” analysts at Nomura said in a report.

In the longer term, Mr Trump’s strong inclination towards protectionist trade policies, his support for domestic industries such as fossil fuels and the subsequent impact on global shipping and trade will be things to watch out for. Jeffries warned of the risk of protectionism in a note on Wednesday.

He said the US had already disconnected itself from some mainstream international compliance issues at a national and state level, such as ballast water regulations, under existing and previous administrations.

Mr Fisher said Mr Trump’s rhetoric in the election campaign might suggest that a continued strategy of “going it alone” to make the US better will only perpetuate this isolationist approach and make US trading compliance yet more costly and complex for owners.

An analyst said that for tanker companies, "we see stocks in general taking a beating today on the back of sentiment until it becomes clear what the fundamental effects will be".

On the dry bulk side, Mr Trump has promised to revive US coal mines, though many doubt whether such an initiative can be successfully carried out.