The mounting uncertainty on the back of the UK’s indecisiveness over Brexit is “alarming” global businesses and making financial institutions nervous and the ongoing trade tensions between the US and China is adding to their woes, the chairman of DP World said.
"The trade war, everybody talks about it, everybody is worried about it," Sultan Bin Sulayem, who is also the chief executive of the Dubai-based port operator, told a conference in Dubai on Sunday. “The other issue which is alarming the business world is Brexit and what’s going to happen.”
The UK's exit from the European Union has gone through political twists and turns since the British public voted to leave the economic bloc in June 2016. European leaders last week agreed to extend the UK’s deadline to leave the bloc from March 29 to May 22, on condition that British MPs approve their prime minister’s withdrawal deal.
However, if Theresa May’s deal is not approved by parliament this week, the EU will offer an extension until April 12 and expects the UK to indicate a way forward for consideration by the European Council.
Mrs May’s Brexit deal has overwhelmingly been rejected twice by MPs and it is not clear if she will put it to a vote a third time.
This uncertainty, Mr Bin Sulayem said, is “annoying” for businesses as it is the UK alone that has to decide on some course of action, which it has not done, rather than the rest of Europe.
“Businessmen can run their business very efficiently regardless of what they are facing. If we know there is going to be a Brexit we can deal with it and if we know there is no Brexit we know what to do. If we know there is going to be a bad deal, we are also able to do something about it,” he said. “But the problem is that they [UK leaders] don’t decide.”
In terms of the ongoing trade rift between the US and China, the DP World chairman said the issue is impacting banks whose first priority is to protect their assets and interests in such uncertain situations.
“It psychologically affects the financial institutions, making life a bit difficult as far as forecasting what is going to happen next,” he noted.
US President Donald Trump last week said he plans to keep trade tariffs on China until he is sure Beijing is complying with a trade deal, dimming expectations that the two nations will agree to roll back duties as part of a lasting truce to their trade war.
Both countries have imposed about $360 billion in tariffs on each other and Beijing is pushing the Trump administration to remove tariffs as part of a deal.
Despite many world leaders talking about protectionism, global trade will continue, Mr Bin Sulayem added.
“We have 80 terminals around the world and we see growth in various parts of the world. People will always do business and life will go on,” he said.
