The interior of a Boeing 767 FedEx Corp. jet freighter is pictured at Memphis International Airport in Memphis, Tennessee.
Luke Sharrett | Bloomberg | Getty Images
Trade around the world is starting to feel the squeeze of increased tariffs from President Donald Trump’s administration, a factor that shipping giant FedEx noted in its latest quarterly earnings call.
FedEx now expects that “global trade volumes will contract this year on an annual basis for the first time since 2009,” the company’s head of marketing and communications Brie Carere said on Tuesday.
“As we have stressed before, a zero tariff, zero subsidy global trade environment is the most powerful economic growth engine there is. We will continue to push for policies that stimulate rather than depress global trade,” Carere added.
FedEx’s expectation for slowing global trade comes after a second quarter slowdown in global trade volumes, which the company said declined from the same period last year. FedEx also cited the recent drop in J.P. Morgan’s global manufacturing orders index, which fell to a reading of 47.5 in August from 49 in May.
Chairman and CEO of FedEx Frederick Smith said that the company has seen data since the third quarter of 2018 “that global trade disputes were adversely affecting manufacturing in Europe and Asia,thereby slowing international shipping demand.”
FedEx shares dropped 11% in premarket trading from its previous close of $173.30 a share. The company reported quarterly earnings results after the close on Tuesday that missed quarterly earnings estimates, while the company also lowered its 2020 earnings forecast to a range of $10 a share to $12 a share.