As the situation in the Red Sea gets worse, US Defense Secretary Lloyd Austin announced a coalition of 10 countries to focus on security in the area. Since trade through the Red Sea accounts for 10% of total global trade, disruption in the area may cause prices for certain goods, globally, to increase. Craig Fuller, FreightWaves CEO, joins Yahoo Finance to give insight into the situation and what it could mean for the global economy and potentially, global stability.

Fuller breaks down potential fallout: "We're in a whole new world and supply chains are those front lines. Civilian vessels have been largely unaffected in terms of moving global trade for the past 30 years. If this continues to become a bigger issue, it's going to change their reconfiguration of global supply chains. Really... the country that's going to be most impacted by this is frankly China, because they're so dependent on global trade that they need peaceful trade lanes to move their products."

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Video Transcript

DIANE KING HALL: Craig, thanks so much for joining us today. When you think about kind of the big picture here, what does this mean in terms of the flow of commerce? What's at stake here?

CRAIG FULLER: Yeah. We're in a whole new sort of generation of the post-Cold War globalization story. If you think about what we've enjoyed for the last 30 years is really very stable global trade. We've been really spoiled, because the seas have been relatively peaceful. There haven't been attacks on commercial vessels of any-- at any real level of scale. There have been certainly pirates, but not much higher-end state-sponsored actors or other folks that are actually attacking big container ships.

So this is a new generation of potential risks. And I think this really forces the globe to reconfigure, forces supply chain professionals to think differently about where they source their products, how they source their products. And what this will do is further encourage more investment in near-shoring and reshoring back to the Americas.

JOSH LIPTON: And, Craig, let me ask you, as you look at these merchant ships due to these attacks, as they're now kind of rerouting here, Craig, what does that mean for their costs? And do you expect them to pass along those costs to us, to Craig and Josh?

CRAIG FULLER: Yeah. So the reality is that Europe is far more exposed to this element than we are here in the United States. The majority of our trade, at least in container goods, comes out of Asia and into the West Coast of the United States. So for us, at least as long as those seas remain peaceful, we're not going to see a pretty significant tax on US consumer goods.