Korean War Threat Causes Global Trade Difficulties

If US President Donald Trump unleashes "fire and rage" in North Korea, it will cause a conflict in the flow of world trade.

North Korea is an ant in the raw material world, as years of sanctions more or less isolate the country from international markets. But this is an ant surrounded by the elephants of the world trade. China is the recipient of more than half of the world's soybean supply. Japan is the world's largest importer of liquefied natural gas. South Korea is one of the largest buyers of coal and a seller of steel. Three countries provide imports of about one third of the world's offshore oil.

Shippers are now keeping a close eye on North Korea's missile tests and Trump's rhetoric to see if tensions have escalated in their activities, which could disrupt trade flows to these countries. While this remains a war of words for now, the intensification could lead to higher insurance rates for ships, exclusion zones or port disruptions, which could increase transport costs and reroute, according to shipping analysts, academics and industry consultants.