Despite trade tensions between the U.S. and several countries – including those in Europe – Danish Shipping does not foresee a decline in global economic growth in the near future.

Despite trade tensions between the U.S. and several countries – including those in Europe – Danish Shipping does not foresee a decline in global economic growth in the near future.
“We are still in the initial phase of a full-fledged trade war, and while that is concerning in itself, we are still some way from seeing a significant impact on global economic growth,” says Jacob K. Clasen, Deputy CEO of Danish Shipping.

One reason for this is that existing contracts continue to uphold trade flows. This is the first phase of a trade war. Phase 2 begins when these contracts expire.

“At that point, we expect to see the emergence of new trade flows and, consequently, new shipping routes. This could negatively impact certain shipping companies as trade routes change—particularly if new markets have specific local conditions, altered infrastructure, or different competitive dynamics. On the other hand, opportunities may also arise if new trade routes involve longer sea distances,” says Jacob K. Clasen.
In the final – and most serious – phase of a trade war, global economic losses will materialize due to inefficiencies. Demand for goods will decline, leading to a reduction in trade volume. This could have significant economic consequences for both the shipping industry and the global economy as a whole.

“It is well-established that trade makes us wealthier, and the opposite is also true. That is why a full-blown trade war is a major concern. Shipping is a mobile industry, and our vessels sail where trade flows exist. For that reason, I believe that Danish shipping companies are well-positioned to face the future—even though today, the outlook is significantly more uncertain than it was just a few months ago,” says Jacob K. Clasen, Deputy CEO of Danish Shipping.

Read the analysis from Danish Shipping here.