Trump import tax would change global trade
A Trump tax on Asian imports will fundamentally change global trade, Mark Geilenkirchen, Sohar Port and Freezone CEO told Bloomberg's Yousef Gamal El-Din and Shery Ahn on "Bloomberg Markets: Middle East".
“Many people are concerned about the prospects for global trade in the future, there is a lot of turbulence and uncertainty in the market,” he said. “If President Trump imposes import taxes on certain Asian goods, particularly those from China, South Korea and Vietnam, it will completely change world trade and will also change the positioning of ports and free zones around the world.”
However, he added that despite this, SOHAR Port’s prospects for growth remained strong, because of its focus on diversity of trade. “We are very positive about growth, we’ve had several consecutive years of growth and we’re now adding the SOHAR Food Zone and an Innovation Cluster that will be self-sustainable and will attract new businesses to the freezone.”
Asked whether these initiatives were in response to the anti-trade rhetoric from the Trump Administration, Geilenkirchen said it was part of a long-running strategy by SOHAR to limit its exposure to global shocks.
“This focus on growth and diversity is not a response to the current geopolitical climate but rather a pragmatic approach by SOHAR Port to the future,” he said. “Every country in the GCC has made diversification a priority, you can’t just trade in one commodity or one industry. We need to make sure we have different clusters and that we’re attracting a wide variety of companies in those clusters.”
Geilenkirchen added that SOHAR anticipated growth from China’s One Belt, One Road initiative, which aims to increase connectivity between China and other Asian and European countries, with the Middle East as a primary thoroughfare for trade.
“The one belt one road initiative is a fantastic project that China is spending around US $1 trillion on, and if you look at the maritime maps, they all have an interconnection in the Middle East, and in Oman they always have SOHAR as a major port of call,” he says. “We do see the port playing a significant role in the one belt one road initiative also because of the fact that Oman is a very stable country with friendly relations globally.”