On posting their first quarter profit close to expectations on Friday, the Danish shipping firm that goes by the name Moller Maersk warned that tensions regarding trade and the slowing of economic growth were responsible for causing ‘certain uncertainties’.
A forecast by analysts in a Reuters poll revealed the company’s earnings before interest, tax, depreciation and amortization (EBITDA) to be a total of $1.25 billion, which was a tad higher than the actual turnout of $1.24 billion. Maersk, otherwise known as the world’s largest shipping company said that it expects 2019 EBITDA amounting to approximately $5 billion.
The CEO of Maersk, Soren Skou, disclosed at a press release that they were facing considerable uncertainties, which were believed to arise out of risks endured during trade tensions. He further went on to add that the volumes on trans-Pacific trade between Asia and North America had shown visible signs of steady decline. A reason behind this was the new tariffs implemented, which resulted in a reduction of expected growth in global container volumes by up to one percentage point.
China had been unexpectedly accused by United States President Donald Trump of reneging on deal sometime earlier in the month, announcing certain tariffs on around a whopping $200 billion worth of Chinese goods. The increase would be a staggering percentage, from 10% to 25%.
In retaliation, Beijing also raised levies on around $60 billion worth of US products and items. The Trump administration further worsened the scenario by blacklisting Huawei, the Chinese telecom giant company, which prevents the company from buying from American companies, without the permission of the US government.
Further, Skou revealed in an interview to CNBC that the United States also had an unresolved discussing left to be held with the European Union. This is a direct implication suggesting that even if tensions were to settle between China and the United States, another discussion would follow immediately between the US and EU. This would entail even more unfortunate tensions.
