Coal traders may benefit from Trump tariff turmoil

Coal traders could become rare winners among businesses reeling from US President Donald Trump’s drastic new tariff regime that adds at least 1% to the cost of nearly all goods imported into the United States.

- Gavin Maguire

That is because energy providers across Asia — which has been hit with some of the highest new US tariffs — will be under pressure to cut power costs for their consumers, which include many of the world’s largest goods producers.

By helping to lower operating costs for factories, Asia’s utilities may allow manufacturers to sustain some sales to the world’s largest importer, even with the new tariffs in place.

But in order to provide the cheapest power possible, Asian power producers will need to step up the use of coal and likely cut back on the use of pricier fuels in their generation mix.

That would be good news for coal traders and miners in the region, but likely a headache for regional air-quality levels, which will only climb further as more coal gets burned for power.

HARDEST HIT

Most affected by the new US tariff levels are the manufacturers of Asia, where China and Vietnam have been hit with new tariffs of 34% and 46%, respectively.

Between them, China and Vietnam are home to a major share of the global production of electronics, clothing, furniture and sporting goods that are regularly purchased by US consumers.