[[{“value”:”
Andrew Craig-Bennett muses on what the imminent swearing in of the 47th president of the United States means for international merchant shipping.
The Old Man said, “I mean to hang on
Till her canvas busts or her sticks are all gone…”
Which the darned fool did, till at last
Overboard went her mizzen mast.
John Masefield: The Ballad of the Loch Achray
Hanging on to things can be a mistake. How long should people hang on in a market that has been remarkably good for longer than most people expected?
Few thought that 2024 was going to be a strong year for liner shipping, but, thanks to the closure, in practical terms, of the Suez Canal soaking up what would otherwise have been a small over supply of tonnage, it has been particularly good. Hanging on was right in 2024.
Not everyone is hanging on now; the Wall Street Journal has an article on the mountain of cash that Berkshire Hathaway has been building. Warren Buffett normally hangs on; his investments are long term, and yet he is going for cash. More cash, in fact, than ever before, and he is still building cash.
Everyone knows that the freight markets are cyclical; many of us also think that volatility outside the liner trades has been increasing.
At some point, the mizzen mast is going to go overboard; we know that this will happen suddenly.
Is this going to be like his border wall: politics as performance art?
President Trump is sitting on majorities in the House and in the Senate and seems set on making the US protectionist and isolationist. That’s very clear. What is not clear is whether he means it.
The business of deepsea merchant shipping is the opposite. We make our money by moving stuff from place to place ever more cheaply, and in doing so we build comparative advantage. Comparative advantage is not good for everyone; there are losers, but if we take everything together the rate of economic growth is faster because everything is done more efficiently.
Merchant shipping works this way; few protections are available, we have become wonderfully efficient, and this makes it hard for us to understand people who want protection and isolation.
From this standpoint, Trump’s programs make no sense if carried out on a large scale.
Does he mean it? Or is this going to be like his border wall: politics as performance art? A few thousand deportations, a scattering of tariffs, and then Republicans in the House and the Senate, leaned on by their own voters who see themselves getting poorer, intervene to stop any more damage?
If he means it and carries it through, then the quarter of world trade that concerns the US is in serious trouble, and that puts us all in trouble.
Ladies and gentlemen, faites vos jeux.
The post Is Trump dead set on protectionism? appeared first on Energy News Beat.
“}]]