The Daily View: It’s the geopolitics, stupid
SOMEWHERE between a global pandemic, land war in Europe, the worst energy shock since the 1970s, stubborn inflation, myriad banking scares, a Chinese property bust and a trade war, the term “polycrisis” was coined.
No wonder, then, that geopolitics has outstripped the supply-demand fundamentals that drive decision-making — or the lack of it — inside modern shipping boardrooms.
Shipping executives are devoting unprecedented time to assessing geopolitical risk as trade wars, regulatory shifts and regional conflicts reshape global shipping patterns, panellists lamented in Singapore yesterday.
But the comments could have been made at any conference, in any maritime hub globally, during the past year.
Shipping is struggling to get an accurate read on the new geopolitics shaping businesses, but what is plain to everyone is that things are getting more complicated, more expensive and more fragmented.
Since the first wave of US-China tariffs emerged in 2018, measures once seen as emergencies have become the new norm.
Average US tariffs on Chinese imports rose nearly 10-fold during that first phase and later rounds — including those we’re seeing today — have merely embedded, then supercharged that baseline.
Add investment screening, outbound controls and derisking mandates, and you have what amounts to a structural rewiring of commerce taking shape.
To the globalist view inherent inside shipping, that is — to say the least — unsettling. But the architects of this fragmentation hold the balance of power and shipping will ultimately have to adapt.
Modi, Trump, Putin and Xi are not globalists and understanding that is key to understanding the changes with which shipping is struggling. They use policy as a precision tool for national ambitions.
Modi’s industrial and digital strategies — from electronics and green manufacturing, to India’s public digital infrastructure — are about translating scale into strategic autonomy.
Trump’s trade and immigration stances are explicitly transactional, serving a domestic base at the expense of long-standing alliances.
Putin seeks leverage through energy, force and disinformation.
And Xi’s Made in China, and Belt and Road initiatives are less about joining the global system than they are about rewiring it, setting standards, securing inputs and binding partners into dependency.
But even as trade lanes and investment adjust to these new geopolitical norms, where nations seek independence, the reality is the global economy will remain stubbornly entangled and interdependent.
So, for the modern shipowner who has already had to become a banker, a tech innovator, a chemist and a cyber guardian, we now add the challenge of mastering geopolitical uncertainty.
Because these questions are no longer the preserve of the policy makers and politicians; they touch each and every business that depends on global supply.
The deals have become more politically conditioned and the decisions more politically contingent, so it naturally follows that shipping’s executive class has to become more politically savvy to navigate the future.
Richard Meade
Editor-in-chief, Lloyd’s List
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