Supply Lines: View from Hamburg

No one in Hamburg is sure just what the impact of President Donald Trump's US tariffs will be on Germany's largest seaport. But they all agr

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No one in Hamburg is sure just what the impact of President Donald Trump's US tariffs will be on Germany's largest seaport.  But they all agree that the outlook isn't great, as we report here this week.  "For us, tariffs and anything that prevents global trade from flowing is of course not a good thing," said Rolf Habben Jansen, CEO of Hamburg-based container shipping line Hapag-Lloyd, whose company headquarters offer a view of the port's gantry cranes. The city-state of Hamburg grew up around its port from the 12th century, and the bustle of ships and container vessels on the Elbe River today is testament to its long dependence on international commerce. Yet that maritime industriousness also puts Hamburg on the front line of the trade war that Trump seems intent on instigating. Hamburg handles two-thirds of the goods that flow through Germany, an exporting powerhouse that is the world's No. 3 economy for all its present stutters. Like the country at large, the port city is steeling itself for what may be to come. German federal elections on Feb. 23 add to the uncertainty that's lapping at the port, which lies 100 kilometers from the North Sea. To be sure, there's no outright panic over Trump's announcement of 25% tariffs on steel and aluminum from March 12, nor his 10% blanket levies on China which triggered retaliatory measures from Beijing. The mood from Hamburg is more one of trepidation at the prospect that these are merely the opening salvoes of a wider conflict that hurts the European Union and drags down the global economy. Read More: EU Cars and Machinery Risk Falling Prey to Trump's Trade Tariffs The "optimistic" scenario is that trade flows are diverted, that international commerce adapts and finds a way through, "like water," said Hamburg Chamber of Commerce head Malte Heyne. But it's equally possible that overall trade goes down, spreading the pain, to Hamburg and elsewhere. Related Reading: Tesla Sales Plunge 59% in Germany to Lowest Level in Years Musk Blasted by Union, Scholz's SPD Over German Politicking VW Bracing for Another Tricky Year With No New Electric Cars —Alan Crawford in Berlin Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Charted Territory

Neighborly spat | Quebec Premier Francois Legault said Canada should consider putting export taxes on products such as aluminum to create leverage in negotiation with the Trump administration. The leader of Canada's second most-populous province said the country should retaliate against the US only if Trump actually implements tariffs against its northern trading partner. Meanwhile, Bank of Canada officials acknowledged that the economic uncertainty created by a potential trade battle supported their decision to cut interest rates last month, while the leaders of Canada's provinces and territories took their case against tariffs to Washington on Wednesday.

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When Prime Minister Narendra Modi last met Trump five years ago, the US president stood before a crowd of cheering Indians and declared America's unending loyalty. Modi is likely to find the US president in a decidedly less celebratory mood when the two leaders meet in Washington this week. EU trade chief Maros Sefcovic spoke with three top members of Trump's team on how to find a solution to the brewing transatlantic trade dispute. Separately, Cognac producers are being blocked from distributing the French brandy through duty-free channels in China, in an apparent escalation of the tariff battle between Beijing and the Brussels.  South Korea recorded a contraction in technology exports for the first time in more than a year after demand from China cratered during the lunar new year holiday. Brazil sees trade quotas as a potential alternative to US tariffs on steel and aluminum and is open to discussions with the Trump administration, Vice President Geraldo Alckmin said. Indonesia is seeking to diversify its markets as global protectionism intensifies, while also taking steps to defend its local manufacturers, Deputy Trade Minister Dyah Roro Esti Widya Putri said. Trump called for lower interest rates, seeking to raise pressure on the Federal Reserve as he moves to raise tariffs to bolster government revenue while expanding domestic tax breaks. Meanwhile, US tariff policies will eventually be a drag on the dollar after providing an initial boost, according to Bank of America. Watch Unilever's CEO discusses how tariffs imposed by the US could impact the company. Separately, the head of the leading US seller of home backup generators said tariffs will boost costs to its business that is seeing domestic demand climb due to increased power outages and rising power bills.

On the Bloomberg Terminal

Modi is expected to offer early concessions on trade and immigration in his Feb. 13 meeting with Trump, seeking to stave off tariffs, according to Bloomberg Economics. Goldman Sachs recommending investors go long an equally weighted basket of frontier currencies including the Egyptian pound, Kenyan shilling, Nigerian naira and Turkish lira, citing their smaller exposure to US trade disruptions. Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers. Use the AHOY function to track global commodities trade flows. See DSET CHOKE for a dataset to monitor shipping chokepoints.  For freight dashboards, see BI RAIL, BI TRCK and BI SHIP and BI 3PLS Click HERE for automated stories about supply chains. On the Bloomberg Terminal, type NH FWV for FreightWaves content. See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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