The first shots to a global trade war have been fired, and if our political leadership does not act now, the air cargo industry could suffer damage long term.
That is according to Sebastiaan Scholte, TIACA Chairman and Chief Executive Officer of Jan de Rijk Logistics, who added everyone would end up “losing out” should a full trade war erupt, due to the higher tariffs being imposed by the Trump administration.
“The first shots to a global trade war have been fired, and I hope that we can still back out or at least mitigate the damage, as if we don’t this will escalate and end up getting a lot worse,” he said.
“In the worst-case scenario, we are looking at tariffs hitting more and more products, which will end up driving costs and hitting the consumer.
“Import tariffs will result in higher consumer prices, less purchasing power, and eventually fewer jobs.”
Scholte added that a trade war with the USA would force countries to do more business with each other, leaving the country increasingly isolated.
“The USA is a very important global market, and the biggest consumer market in the world, and so everyone would end up losing out.”
Scholte added that the damage may not be immediately apparent, as it takes time to unwind the vastly complex and interconnected global chains.
Scholte added that globalization was here to stay and that decisions to counter the effects of tariff rises, such as moving a factory from one country to another, took a lot of time and were not done lightly.
“You don’t, from one day to another, shut down the whole factory and set up something somewhere else. You have to be really sure because you don’t do this just temporarily, but for couple of years, at least,” he said.
However, he added that “companies are reluctant to operate in markets where there is so much fluctuation and unpredictability – it is bad for business and bad for trade”.
“It is unfortunate that we as an industry cannot do more to counter these actions – hopefully, threats to apply even further tariffs will not materialise, and we will see a de-escalation of the situation,” he concluded.