Trump isn’t exactly the most diplomatic, or rational, of world leaders, but a lot of the time his incoherent rhetoric goes unnoticed. Whether this is due to the sheer amount of nonsense that ebbs and flows out of his mouth (building an unrealistic wall with Mexico, repealing Obamacare, withdrawal from the TPP, withdrawal from the Iran nuclear deal, trying to cancel payments on global warming to the UN, attempting sue his accusers of sexual misconduct.)

However, his latest shenanigans, regarding a 25 per cent tax on steel and 10 per cent tax on aluminium for the EU, Mexico and Canada which came into force earlier today, could mean that many exporters from Europe, and further, could be facing economic troubles, not to mention what it could do to the US.

Leaving to one side all the preposterous claims and strong criticism of the import tax on steel and aluminium from the EU, Canada and Mexico by top Republicans, the decision to go ahead with this has provoked outrage stark response from leaders stating they would impose tit-for-tat tariffs on the US and French President Emmanuel Macron going as far to tell Mr Trump by phone that the US move was “illegal”.

How does this affect freight forwarding? Well, if you are an exporter / importer of plated steel, slabs, coil, rolls of aluminium, and tubes, or any other raw materials which are used extensively across US manufacturing, construction and the oil industry then you could be in for a rocky, and rather expensive ride.

The hike in tax could see the trade war sparked over a global scale and who really suffers at the end of it? Freight forwarders and their clients. If the tax rates go up by 25% some smaller freight forwarders, whose clients rely on them for cost efficiency will be pushed out of the market by more multinational companies and it could spell financial ruin for some. Analysts at IHS Markit expected the effects to be distributed across a wide range of markets, limiting the effect on steel prices outside the US. In essence, Trump is hurting the US economy more than any other with these activities.

Whilst trying to explain this to Trump would be the equivalent of explaining quantum physics to a daffodil, the repercussions of the Presidents recent actions, coupled with the untold effect Brexit may have, could mean that freight forwarders are going to have to dig deep into their pockets to keep trading.

Matt Dailly | Editor | FORWARDER Magazine