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Donald Trump’s protectionism on trade would be ‘awful’ for the ecomony, BHP warns
Donald Trump’s threat to retreat to protectionism in the US could be “pretty bloody awful” for the global economy, the boss of one of the world’s biggest miners has warned.
Andrew Mackenzie, chief executive of BHP Billiton, said the US needed to show “good leadership” on global free trade because of the benefits it brought ordinary people.
“Free trade is the lifeblood of the economy, it makes products cheaper, consumers buy more and as a result of that we see broader economic growth,” he told Bloomberg News.
The global economy is growing at a rate of 3pc a year, Mr Mackenzie said. “If we’re going to continue on the journey to lift people out of poverty, we have to get back to 4pc [growth].
“That won’t happen under a protectionist regime and protectionist leadership in the US.”
Some of Mr Trump’s policies - such as lowering the tax burden on business - could be good, Mr Mackenzie said. “So some good [policies], some pretty bloody awful,” he added.
Mr Trump was vociferous on the campaign trail about imposing tariffs on imports in order to protect jobs in the US. He has floated a potential tariff of 45pc on Chinese goods, though his administration has yet to flesh out details.
BHP is the biggest foreign investor in shale gas in the US, and Mr Mackenzie and his chairman Jac Nasser visited Mr Trump at Trump Tower in New York in January. It also co-owns a giant copper project in Arizona, although the US is not a huge market for BHP’s products.
The mining giant is bullish on the outlook for oil, and has recently committed to two large offshore projects in the Gulf of Mexico, one of which is being led by BP.
BHP reckons the world will need approximately 30 million extra barrels of oil a day by 2025, even once projects already in development are included. Investment in oil has been “extraordinarily weak by historical standards”, the company said in its latest forecast this week. “Therefore, even in the absence of growing demand, significant ongoing investment is required just to stand still.”