If a trade war breaks out, the item would certainly have major consequences for global GDP growth, although Olam’s business design has placed the company in a stable position, the CEO of the global agri-business told CNBC.
“I think there will be serious implications because the item reduces the contestability of global trade, in addition to global trade will be a leading indicator to global GDP growth,” Sunny Verghese, the CEO of Olam International told “Squawk Box,” on Tuesday.
Reducing contestability — the openness of a marketplace to fresh entrants — of global trade through tariffs or tit-for-tat measures would certainly hit trade in addition to GDP growth, according to the CEO. Still, he added, tariffs might not be enacted within the end because there are no winners in which scenario.
Global trade can expect serious headwinds within the case of the tariffs pushing through, in addition to while the agricultural industry will be impacted, Olam’s diversification has placed the item in strong standing to deal with the potential fallout, the CEO said.
“which will be the reason we are in 72 countries, in addition to we are also participating very intensely in domestic trade in all of these countries,” Verghese said. As a result of not relying wholly on the export trade flow, he added, the company will be quite “well hedged,” to deal with the aftermath of any tariffs or trade war.