The chief executive officer of the world’s biggest shipping company says curbs on immigration backed by the administration of President Donald Trump risk hurting the US economy.
“The US economy is running at full steam and therefore wages have started to rise,” which “in itself is positive,” Soren Skou, the CEO of A. P. Moller-Maersk A/S, said in a phone
interview. “But if the US succeeds in cutting off immigration, it will be very challenging to keep the economy going at the same pace.”
Running a company that transports goods around the world puts Skou in a unique position to observe how a wave of protectionism is reshaping the global trade map. And as the Trump administration blames globalisation for pummeling the middle classes, the Maersk CEO says it’s clear other regions are emerging as economic powerhouses.
“My personal belief is that Europe has more potential,” Skou said. “There are parts of Europe with a lot of potential if they make reforms that strengthen their labor markets and seize the opportunities that arise from digitisation,” he said.
“If the political situation can be kept under control, I think Europe has some good years ahead.”
Maersk transported 10.7 million 40-foot containers last year, an increase of 3 percent from 2016. The company’s fleet of almost 800 vessels controls about a fifth of the world’s seaborne trade, according to industry consultant Alphaliner.
When it comes to the longer term, Skou said Maersk is “positive” on Africa and Latin America.
“And that’s why we’ve invested a lot in those two regions.”
“Global trade is not at risk of stopping, but we also have to acknowledge that we probably won’t get to see new, large free-trade agreements,” Skou said. “So we won’t get a boost or an acceleration from that, and that’s a shame because we think that free trade makes the world richer.”
US top rank from Moody’s faces downward pressure
America’s top credit rating is likely to face downward pressure in the years to come because of a swelling national debt load and widening budget deficits, Moody’s Investors Service said.
The US, which is rated Aaa with a stable outlook, faces “downward pressure in the long-term, due to meaningful fiscal deterioration,” Moody’s analysts Sarah Carlson and Yves Lemay wrote in a report. “Rising entitlement costs and rising interest rates will cause the US’s fiscal position to further erode over the next decade, absent measures to reduce those costs or to raise additional revenues.”
The report comes as President Donald Trump signed a two-year budget agreement that will boost federal spending by almost $300 billion.