Yemen’s Houthi assaults on commercial vessels in the Red Sea, a critical artery for global trade, have sparked concerns over maritime security and pose a threat to international supply chains. The International Monetary Fund (IMF) recently cautioned that any escalation of conflict in the Middle East would disrupt trade routes and air traffic, resulting in increased shipping expenses between Europe and the Mediterranean.

LIMS explained that the surge in shipping costs between Asia, China specifically, and the Mediterranean would directly impact Lebanon by driving up the prices of imported goods, thereby contributing to domestic inflation. Furthermore, Lebanese exports, particularly those bound for the Gulf region via the Red Sea route, would encounter reduced competitiveness due to heightened freight charges. To mitigate the repercussions on international trade, LIMS recommended that the Lebanese government consider repealing customs duties and tariffs on imports and exports to offset some of the elevated shipping costs. Additionally, easing procedures at ports to facilitate smoother trade flows is deemed crucial.

Moreover, fostering stronger trade ties with Europe by easing trade restrictions could yield benefits for Lebanon, given its strategic position between shipping routes. Implementing proactive measures to reduce trade barriers and enhance connectivity could help mitigate the adverse economic impacts of escalating global shipping costs.

• Global Shipping Crisis… How Can Lebanon Deal With It? February 27, 2024: VDL, TV Interview AR