A CEO says US-China tensions are contributing to global trade shifts Ship’s crew

By Ann Koh and Alex Longley (Bloomberg) —

Political tensions between the US and China are contributing to reduced container movements between the world’s two largest economies, according to a major shipping industry boss, on top of an already ongoing world trade reshape.

“We are seeing a de-leveraging of US-China trade,” said Jeremy Nixon, chief executive officer of Ocean Network Express, at the Capital Link Singapore Maritime Forum. “Many companies in the US are trying to reduce the amount of imports from China.”

The proportion of boxes carrying everything from cell phones to tables from China to the U.S. has fallen about 10 percentage points over the past year, said Nixon, whose company is ranked in the top 10 container ships. As a result, the US is forging stronger ties with other trading partners, including Europe, a trend Nixon says will continue.

The world’s two largest economies have become less and less interdependent over the past year. This is primarily due to a broad-based slowdown in the global economy and was particularly acute for containers as the demand boom reversed during the pandemic.

The decoupling is now being exacerbated geopolitically, says Nixon. Tensions have flared over problems from Taiwan over the alleged spy balloon launched over the US. President Joe Biden is striving for it Sign an executive order that will limit investment by American companies in key parts of China’s economy.

The slowdown on the China-US route means America will import more from elsewhere. While container freight rates have slumped across the board this year, the decline in Europe has been less steep as the US imports more from the continent, Nixon said. Ship flows from the Mediterranean, India and even Southeast Asia to the USA have also increased.

© 2023 Bloomberg LP

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