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Stormy seas as Trump becomes president-elect

Stormy seas as Trump becomes president-elect

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If there ever was a sound argument for increasing scrapping, the US election gave it to the shipping world with the election of Donald Trump as president.

In very simple terms, shipping depends on trade and trade depends on non-isolationism. The problem is not just President Trump; the problem is the belief of the US voters who elected him. The short-term prospect for shipping is dark, as is the medium-term. But the long-term outlook is good. Good because the world will finally realise that the United States should not be the leader of the so-called free world.

There are two problems with the Trump presidency. First is its isolationist policy. The second is its belief in the totally discredited trickle down theory of economic stimulation by tax reduction.

It is unlikely that nations will acquiesce to renegotiated terms of current trade agreements by a Trump administration. Countries such as Canada, Mexico, Germany, China et cetera see Trump as he really is, a bully. Hence trade wars are likely. The situation may be exacerbated by the fall of governments, such as Germany’s, due to a fall in exports. Isolationist governments may become more prevalent.

One question is to what extent will the United States continue or decrease its military activities around the world. Will various military exercises continue with countries in Asia, for example with Japan and South Korea? This is not clear yet. Trump has said he is against getting involved with various conflicts around the world; however, he has been one who is easily stirred up to retribution when he feels offended or challenged. It is very important to see how much the Trump administration meddles in the South China Sea.

Trump’s policy of tax cuts will not stimulate growth. What is needed are massive infrastructure projects funded by the US government. Will the Federal Reserve be inclined to keep interest rates near zero? That policy has been a failure but it is doubtful that the Fed will resist keeping rates low. The US may even slip into a recession within the next year. If the US falls into a recession, Europe and Japan will not be far behind.

The long-term benefit of a world which begins to stand up to the US is the fact that various nations and international institutions can develop backbones thereby producing a world of diverse economic and governance policies. Nations will not be as likely to join with the US in various wars to spread democracy, especially a democracy which has just proved itself to be in shambles.

The Chinese government is positioned well with its change of course in the last few years from an economy based on exports to one based on domestic consumption. Also China’s actions, such as the establishment of the Asian Infrastructure Investment Bank, will solidify growth of Asian economies. Asian nations that continue to align themselves with the US will be losers; hence, most will see the writing on the wall and begin to distance themselves from Washington.

A great deal depends on how much the people around and advising President Trump can keep him moderated. However, if his campaign is any clue, that will not happen in a crisis.

It is unlikely that the Trump administration will undertake any innovative policies. For example, it could put the brakes on fracking, ostensibly for environmental reasons but also to raise the price of oil. The current depressed price of crude oil has driven too many countries into recession. Nothing like this will happen as Trump himself will always put US interests above the rest of the globe’s. The price of oil will probably decrease, adding to the woes of many countries.

The story for shipping is the same as it has been for several years. Scrapping must increase. There is no hope for an increase in demand, absolutely none. Unfortunately, scrapping appears to have slacked off in the last few months. It must increase to a level even above what it was in the first half of 2016. The future prosperity is in the hands of the shipowners themselves.

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Katherine Harine

Several decades experience in geopolitical analysis related to strategic military systems.

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11 Comments

  1. Ed Enos
    November 10, 2016 at 9:27 am

    Good gawd?!? This s the worst piece of crap you folks have put out yet. You certainly have revealed the the true extent of your liberal whining with this anti-American, liberal Alinsky socialist loving tirade.

    My arse bleeds for you.

    I certainly hope Ms. Harine feels better now that she’s gotten all that tripe off her chest. Clearly at the heart of it all, one “professional journalist” is like a thousand others.

    All the “experts” & elitists thought they figured #BREXIT the right way.

    You/they were all wrong.

    Similarly, the same people figured Clinton had it sown up too, last week. Wrong again.

    You will likely spend the next 4 years vomiting one anti-Trump tirade after another: You’ll be just like 99.9% of all the other MSM pulp rags out there.

    Not much of a professional stretch by any measure. Sadly, you’ve probably not considered why the average American voted the way they did. Not that their opinion matters, eh?

    You lost. Your ideology lost. Your vision of the world failed. Now get over yourself and your own opinions.

    Clearly the #BREXIT vote didn’t teach you anything. Hillary Clinton’s loss went right over your head as well. That tells me as a writer, you’re selectively listening only to people you want to hear.

    The shipping industry is in the piss poor shape it’s in because of the failed economic policies the last 8 years of the Obama administration and also of the socialist idiocy of the EU.
    Combined with some monumentally stupid decisions of a handful of greedy (but oh so ignorant) shipowners that literally drove this industry aground by their own poor leadership.

    Trump had nothing to do with any of it.

    It’s easy to sit here now and pontificate of “what might be” from a Trump presidency. Any fool can do that. And many are.

    But like the majority of others I believe in a better America and a more profitable and successful country. Our allies and friends will similarly enjoy the rewards, too.

    This doom and gloom op-ed about the horrors of what a Trump leadership may be is such a disappointment from all of you. I thought you were different. I thought you worked differently.

    Clearly I was wrong.

  2. Paul
    November 10, 2016 at 9:39 am

    Unfortunately Ed you seem to have risen to the bait. For some time, and I don’t think you can disagree with this, American politics has been entirely polarised with each party taking the entirely opposite stance of the other regardless of subject matter. Both you and the article’s author appear to be similarly entrenched, firmly on opposite sides. Hopefully the reality for all of us that aren’t Americans will be somewhere in the middle.

  3. Sam Chambers
    Sam Chambers
    November 10, 2016 at 9:49 am

    Ed, I’d also urge you to look at the back catalogue of Katherine’s contributions — http://splash247.com/author/katherineh/ — at which point it becomes clear she’s no fan of the departing Obama regime either

  4. George
    November 10, 2016 at 11:13 am

    ” tax cuts will not stimulate growth. What is needed are massive infrastructure projects funded by the US government”

    I am deeply intrigued by this argument. It simply does not pass any logical test. Next thing we’ll know, Krugman will be posting through splash as well.

    nothing particular against keynsianist policies, except they don’t work.

    I believe that businesses would be happier with less taxes and less red tape and we all know that over-legislating has been a characteristic element of the Obama administration

    1. Andrew
      November 10, 2016 at 4:18 pm

      I don’t see this “tax cuts will not stimulate growth” as that controversial, especially ref corporate tax rates.
      The Laffer curve has been shown to be absolute lunacy while a race to the bottom in terms of tax rates helps no-one.
      With the plethora of different secrecy jurisdictions available for multinationals, government and non-governmental elites to bleed the domestic economies, widespread transfer pricing practices, the idea that lowering tax rates will have any major impact on investment and growth is outdated and not based on evidence.

  5. Mike
    November 10, 2016 at 1:26 pm

    One of the worst pieces on US election result I’ve ever read. Socialistic bla-bla. Tell about war-hungry US to Ukrainian people. Or to Baltic republics. And China solidifying Asia – it’s joke, right? It’s a special sense of humor of author, I believe. Asia is scared to death with China’s ambitions, open aggression and growing military might. Author lives in another world or Galaxy, probably.

  6. Kyle
    November 10, 2016 at 1:37 pm

    “It is unlikely that the Trump administration will undertake any innovative policies. For example, it could put the brakes on fracking, ostensibly for environmental reasons but also to raise the price of oil.”

    There are too many false statements in this opinion piece to write a complete rebuttal, so I decided to just pick this one. The first sentence is entirely presumptive. Let’s see what kind of team Mr. Trump puts together in his administration before making any wild assumptions. And then let’s see what he can get through Congress. Mr. Trump’s campaign speeches are a long way from becoming law.

    The second sentence is the opposite of an innovative policy. American innovation made fracking possible that unleashed enormous resources without environmental harm. These resources have taken away power from OPEC and bullies like Putin who want to use oil and gas as a weapon. This industry is cyclical and always will be. The world will always be better served by a market that doesn’t have to contend with market manipulation from government actions.

    Katherine may not be an Obama fan, but this flawed opinion piece should probably be on her personal blog and not on a reputable website such as Splash247.

  7. Julie
    November 10, 2016 at 3:02 pm

    “The problem is not just President Trump; the problem is the belief of the US voters who elected him.” To you, I am part of the problem. Could it be that a liar, a lawless thief and one who believes she is above the law has anything to do with why Donald Trump is now President-elect. The Democrats handed the Presidency to Mr Trump by putting their confidence in an establishment who doesn’t hear or care what the PEOPLE of America think. We are still a land that is governed by the people, and FOR the people, not for a select few who have agendas to help themselves on the backs of hard working, law abiding citizens. Obama fundamentally changed America. He accomplished what he set out to do. I am thrilled that Hillary was rejected. It leaves me with a hope for this country.

  8. Steve
    November 10, 2016 at 3:05 pm

    What garbage. Splash should be embarrassed. Massive infrastructure projects ?? Did that with little result other than increasing the national debt. The success of the United States has come from individuals, small businesses growing to large businesses and a limited government. As government has grown in size and scope it has taken away the freedoms and responsibilities of individuals while taxing and regulating businesses into stagnation.
    It is time to unleash the economic engine the US can be by putting the responsibility back with the people and the businesses they create and work for.
    De-regulate, reduce taxes and downsize the size and scope of government.

  9. Mike
    November 10, 2016 at 6:33 pm

    Dear Splash24/7,
    I have never sent a reply to one of your articles and perhaps I am “taking the bait” as well, however I read your articles to stay in touch with the industry I work in not to have my intelligence insulted by some self proclaimed “Geopolitical” expert. This article was the worst piece of journalism I have ever read. If it was intended to be only Ms. Harine’s personal opinion, I vote she keep it to herself in the future. If meant to truly be a forecast of the industry’s future, you are not helping the situation with this article.
    She insulted my country, my President, and my industry. I think she owes the industry and the Americans an apology.

  10. John
    November 11, 2016 at 5:49 pm

    One of Obama’s first acts was to have “shovel ready jobs” to bring our infrastructure back into shape. It didn’t work at all so why do you think it would work now? We are just deeper in debt than ever.