WASHINGTON: U.S. President Donald Trump’s unpredictability and nationalist policies have become the biggest risk to global trade, Philippine billionaire and port operator Enrique Razon said. “There are dark clouds gathering,” Razon, chairman and president of International Container Terminal Services Inc., said in an interview on Monday with Bloomberg Television’s Haslinda Amin in Los Angeles.
“The U.S. has created the largest part of the uncertainty in an already uncertain future,” he said, referring to the U.S. leader’s protectionist moves including a proposed border-adjustment tax and his earlier threats to pull out of the World Trade Organization and North American Free Trade Agreement. House Speaker Paul Ryan has been pushing to replace corporate income tax with a tax on businesses’ domestic sales and imports, exempting exports. The border-adjustment tax proposal raised alarm bells among importers in the U.S., as well as government officials in Mexico as they feared it would reduce shipments north of the border.
Trump in April signed an executive order that threatens to review and “renegotiate or terminate” America’s trade agreements — including its participation in the WTO — if they are found to harm U.S. interests. Last week, he also threatened to withdraw from Nafta, but later said, after speaking with the leaders of Canada and Mexico, he would seek to renegotiate. While Trump has backtracked on some positions “he keeps changing what he is saying,” Razon, 57, said. “I don’t even know if his people know exactly what he’s really gonna do.” Still, Razon said his company is willing to invest $500 million to $1 billion to build a terminal in every country in western and eastern Africa, a continent he considers the most immune to any globalization shifts. “Barriers to entry are very high there but once you are in, it has the best margins in our industry,” he said. Rising anti-globalization hasn’t affected International Container’s port operations in the first quarter, with trade growing in almost every region where it has a presence, Razon said. The company operates in Asia, Africa, Latin America, Europe, the Middle East and Australia.
Razon, who also chairs Bloomberry Resorts Corp., said Philippine President Rodrigo Duterte’s Beijing trip, which yielded $24 billion in investment pledges in October, has paid off with Chinese tourists more than doubling and feeding growth in the Philippine casino industry. “The market has been growing tremendously in the last two, three years so the bet is paying off,” Razon said. “We are making more money. We are seeing huge growth from visitations in China,” he said, adding he expects to sustain growth of as much as 40 percent in VIP volume at its Solaire Resort and Casino on Manila Bay. One of the risks to his gambling business is if the Chinese government succeeds in curtailing the movement of VIP funds, which could slow the sector, something that Macau’s casino industry had to endure during an anti-corruption crackdown, Razon said.
