Red Sea Crisis: Economic and Geopolitical Implications Beyond Gaza

The crisis in the Red Sea shipping nearly rivals the war in Gaza in terms of media coverage, international attention, and concern. 
12% of global maritime trade passes through the Bab al-Mandab Strait, which connects the Indian Ocean to the Mediterranean via the Red Sea via the Suez Canal.

The crisis in Bab al-Mandab is political in nature, but its economic repercussions are compelling countries worldwide to reassess their priorities and evaluate the objectives of their alliances. 

China, whose relationship with the United States is governed by rivalry, is the most prominent target alongside Israel for Houthi attacks. It asked its ally, Iran, which supports the Houthis, to help stop their attacks on ships in the Red Sea, considering that if its interests are harmed in any way, this will affect... Its relationship with Tehran, according to Reuters.

According to Statica, the value of Chinese exports to Europe reached 626 billion euros in 2022, exports that are now affected by Houthi targeting. The decline in maritime trade in Bab al-Mandab is also reflected in the Suez Canal. According to the German DW website, the canal brought in $9.4 billion to Egypt in transit fees for the fiscal year from June 2022 to June 2023, a figure expected to decrease to $5.6 billion, a 40% decrease.

The targeting of the Red Sea has not been limited to Asian and regional countries, as European ships are also in trouble. The latest developments include the announcement by the Danish shipping group Maersk, one of Europe's largest shipping companies, that it will sail around the Cape of Good Hope for its shipping route connecting India and the US East Coast.

According to The Telegraph, circumventing South Africa adds 10 to 14 days to the delivery time of goods, leading to a 170% increase in shipping costs between Europe and Asia.

According to several Western media outlets, including Deutsche Welle, these developments have led many European countries to reconsider their reliance on Chinese exports and compensate by establishing European factories to meet their needs.

Thus, Europe is economically stifled, as shipping goods from China has become more costly, and Egypt is losing billions of dollars. 

As for Israel, it is trying to compensate for the subsequent damage to its imports through a land corridor to transport goods from the Arabian Sea to the Israeli interior, according to the US magazine Foreign Policy.

Thus, the United States appears to be the least affected by what is happening in the Red Sea, and its exports to Europe via the Atlantic Ocean have not been affected. 

In 2022, US trade in goods and services with the European Union was estimated at around $1.3 trillion, according to the US Trade Representative's Office.