Air Cargo Newsdesk

A trade war is the last thing the air cargo industry needs

A trade war is the last thing the air cargo industry needs

AIR CARGO profit margins will shrink incrementally during an outright trade war, where exporters face higher tariffs, regardless of whether they are in developed or developing countries, writes Thelma Etim.

In a trade war, everyone loses, warns the United Nations Conference on Trade and Development (UNCTAD).

The international body has calculated the potential tariff increases assuming that all countries engage in a trade dispute and set tariffs to their “optimal mercantilist levels”.

“This would include also nullifying any bilateral concessions and preferential conditions for specific categories of countries (e.g. least developed countries),” UNCTAD estimates.

Trade war tariffs imposed on Mexico’s exports could rise by 60 per cent

“We calculate that US exports would face an average tariff of about 30 per cent, the European Union about 35 per cent and China would face almost 40 per cent. That is a very significant increase from current relatively negligible tariffs,” the body revealed earlier this year.

Among the worst hit will be tariffs imposed on Mexico’s exports, which could rise by 60 per cent, whilst Canada, Ethiopia and Israel’s tariffs could increase by more than 50 per cent. Turkey’s exports could climb almost 50 per cent.

“Higher tariffs would greatly affect the global economy by disrupting supply chains and increasing the prices of many consumer goods,” notes UNCTAD.

“Moreover, the size of international markets would shrink, to the disadvantage of less efficient producers, often small and medium-sized enterprises in developing countries. Overall, it is very likely that poor countries will lose relatively more from a trade war than richer countries.”

For the full list of potential tariff increases by country click here

Read more stories about global trade here

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