THE U.S. economy will be hit many times harder than the rest of the world by an escalating global trade war, according to the chief executive officer of AP Moller-Maersk A/S.

Soren Skou, who runs the world’s biggest shipping company from Copenhagen, said the fallout of the current protectionist wave “could easily end up being bigger in the United States. Tariffs could slow global annual trade growth by 0.1 to 0.3 percent, though for the United States, the effect could be “perhaps 3 or 4 percent,” he said at Maersk’s headquarters. “And that would definitely not be good.”

The company transports about 20 percent of the world’s seaborne consumer goods, putting it in a unique position to gauge the fallout of tariffs on trade flows. Maersk has in the past broken with its culture of steering clear of any political debate to criticize the trade policies of U.S. President Donald Trump.

Maersk focuses on trade flows between Europe and Asia and so far its industry hasn’t been directly hurt by tariffs. In fact, demand grew 4 percent in the second quarter. But Skou said that may change if the United States starts targeting consumer goods.

“The first thing the U.S. 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 U.S. consumer brands like Nike produce in all of Asia, not just in one country, so there will be a substitution effect.”

The United States put duties on US$34 billion in Chinese goods last month. The Trump administration has said it will impose tariffs on a further US$16 billion Aug. 23.

“The other factor is that there’s a lot of stuff that’s now imported into the United States that just isn’t produced anywhere within the United States,” Skou said. “You can’t get Nike sneakers or iPhones that are produced in the United States. So it will end up being pushed on to the consumer.” (SD-Agencies)