News Roundup: Tariffs, Trade, and Turbulence Ahead

Discover the intricate dance of global economics and environmental changes in our latest episode, where President Biden's fresh tariffs on Chinese imports take center stage. Get ready to navigate the potential impacts on everything from your next tech purchase to the broader implications for international trade relations. We're peering into China's response to the tariffs, consumer price hikes, and their quest to meet growth targets, all while Tesla makes a bold move in their charging team strategy. It's a high-stakes game of chess, and we're breaking down each play.

This episode also takes a sobering turn towards the environmental shifts shaking our world, from the buzzing invasion of mosquitoes in Scotland to the solemn silence of Venezuela's melting glaciers. Amid economic strides in service sectors, we gauge the uneven spread of prosperity, pointing to the need for a closer examination of the true beneficiaries. Plus, news of Josh Simon from JAS Worldwide , lending his expertise on global risk and the complexities of credit management in a future special edition coming your way. Strap in for a thought-provoking journey through the forces shaping our planet and pockets.

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Transcript

Tony Hines: 0:05

Hello, Tony Hines here. Your listening to the chain reaction podcast all about supply chain advantage. This is the news roundup. All things impacting global supply chains this week. So stick around, stay tuned, find out more. In the news this week, more tariffs on China from the United States, Tesla's woes, with regard to the EV rollout and the dismantling of the whole Tesla charging team and the pressure that's putting on US policy. Inflation rates, climate change, and many other things coming your way in the next twenty five minutes. While president Joe Biden has introduced tariffs on China's electric vehicles, solar, medical supplies. And this is all part of the continuing saga to put restrictions on China's imports. The new tariffs will be in place as soon as next week. It will entail continuing with the tariffs put in place on many Chinese goods. By the former president Donald Trump. But there are also new tariffs on semiconductors and solar equipment, and there'll be tariffs on medical supplies like syringes. And personal protection equipment. This is section three zero one, tariffs. The Biden administration said they're focused on strategic, competitive, and national security areas. Many want tariffs on Chinese vehicles, and that's to protect the home market. These are continuing protective measures. The tariffs on Chinese EVs are about to go up by four times under the new Biden administration plan according to the Wall Street Journal, and there continued to be risks about China's EVs having tech on board, which could pose a risk to America's population by obtaining personal data. These recommendations were made by the US trade representatives office in the past few weeks. This is all coming as the Sirius election. Agendas begin to be established for the November presidential vote. Trump has said he wants to see sixty percent or higher tariffs on all Chinese goods. There's no doubt gonna be retaliation from China, of course, and it just heightens the tension between these two largest economies in global trade. Between twenty seventeen and twenty twenty one, Trump introduced a number of tariffs which started the trade war with China. So free trade is not on the table at the moment. Both of the candidates for the presidency have said that they intend to protect the home market and reduce China's impact. Chinese metal products were targeted products too within a narrow range. And it's estimated that more than a billion dollars of steel and aluminium products have been impacted. There's also an investigation into Chinese trade practices across ship build living, maritime and logistics sectors, and that could mean even more tariffs. The Biden administration has also been pressuring Mexico to prohibit China from selling its metal products to the United States indirectly from that country. China have said that the tariff measures will be counterproductive, and they'll inflict harm on global trade and the US. No. Is China itself suffering from a bout of inflation? Well, that appears to be the case. It was reported this week that China's consumer prices have risen for a third straight month in April, and the producer prices have experienced continuing declines. So some tricky times ahead for Beijing. There have been a flurry of policy measures over the past few months. Consumer prices have gone up by zero point three percent in April from the year earlier according to the National Bureau of Statistics and that's a rise of about zero point one percent in March And if we strip out food and energy prices, the data suggests a comeback in demand, especially for services. That's according to Zhu Chen, senior economist at the economist intelligence unit. Core inflation excluding food and fuel prices which are more volatile, grew at around zero point seven percent in April, up from zero point six percent in March. And the overall consumer price index rose by zero point one percent from previous months that've been price hikes by utility companies, which is also a driver. Municipal debt is said to be about thirteen trillion US dollars. This data suggests that domestic demand is recovering. But it's a slow process. Consumer prices remain low and industrial manufacturing is still under pressure. The producer price index dropped to two point five percent in April from a year earlier. It was two point eight percent in the previous month. Central Bank said it would make monetary policy flexible they wanted it to target particular sectors, and they wanted to be effective in their policy. The strategy to hold inflation down in consumer markets is key to economic recovery. The target for economic growth is about five percent in twenty twenty four, but many think it's gonna be a challenge to achieve it. China's export growth far has exceeded expectations, and it's demonstrating it's more resilient and is recovering from geopolitical uncertainties despite measures being taken. Against China by the United States. Export rose one point five percent from a year earlier to two hundred and ninety-two point five billion U. S. Dollars and there were two thirty four billion dollars in April compared to a seven point five percent decline in March. Imports rose by eight point four percent from a year earlier and the China trade surplus stood at seventy-two point four billion. Compared with fifty-eight point four billion dollars in March. Tesla has announced it's gonna spend five hundred million US dollars to expand its charging network that was announced by Elon Musk on Friday. This, of course, comes on the tail of laying off all the employees that were running that business. So Tesla is gonna spend five hundred million expanding supercharged networks. It will create thousands of new jobs this year. Musk said in a post on social media platform x. And this comes, as we say, on the tail of the layoffs. Tesla's superchargers have tripled in the past five years. But if there's any slowdown in this, of course, it threatens Biden's policy for growth in the EV market. And of course, it will put pressure even more so on policymakers in the US to keep China EVs away from the home market why it sorted itself out. It was a strange decision many think to actually do away with the team that had been quite successful in expanding the EV charging stations around the country for Tesla, and they seemed to have deals with other EV manufacturers but seem to move away from that very quickly and have a turnabout in strategy. There's been a lot of state investment over the past few years by the Biden administration to get the EV charger network up and running. And Tesla's probably been quite a big beneficiary. From that government investment. Elon Musk's decision to get rid of the whole EV team at Tesla will cause headaches for the Biden administration's program of electrification. Last year, they announced that they had ambitious plans to get the infrastructure in place so that they could drive up demand for EV adoption. This was under the National Electric Vehicles Infrastructure Program. And the government is giving out five billion US dollars to states over five years to build five hundred thousand DV chargers. Of course, if that money is invested and it goes to a network that then decides to pull out. That will be money wasted. So it's important to get this infrastructure market right. And Tesla's instability presently is a cause for concern because they have superchargers and they've been the biggest winner so far for those federal funds, which was a crucial part of the plan. But many are concerned now because of the layoffs to the Tesla team, and the partnerships in the programs that are already underway are also threatened. So they think that Tesla is gonna pull out of the federal program, and that could cause a slowdown. And that's not what the government in the US want to happen. It'll put it back to square one, of course. It'll go right back to the start and I'll have to rethink how they're gonna develop. The EV charging network through the country. Tesla had won awards to build sixty nine of the five hundred and one navy funded sites. But they're not gonna move forward on those with the present disruption. Many think that the program's been pretty slow anyway to develop, and of course, it will push back. That market. Tesla has said they still intend to grow the EV charger installations, but it will be at a slower pace. Will have been protests against Tesla's German plant, and they've been quite serious in Drew Anahad near Berlin. Protesters clashed with police, and they attempted to storm the Tesla facility on Friday. About eight hundred people took part in this protest, which was a group called Disrupt Tesla, which claims that the expansion of the Tesla plant would damage the environment. CEO Elon Musk had said that they didn't manage to break through into the plant. So this was an environmental protest. They're also concerned that it will impact countries like Argentina and Bolivia through lithium mining, and so they're very concerned about that. There were several arrests at the protest, and a few Tesla cars were damaged with paint spray and pyrotechnics at a nearby storage site. Tesla closed down the plant on Friday without giving any reason. There was another protest this week at the Barclays Bank AGM held in Glasgow, and that was my extinction rebellion, and that was all about investment in fossil fuel industries. Trying to put pressure on Barclays to remove themselves from those sorts of investments. So it does seem that these protests are a growing problem, and we've known that for some time. And it's likely they're gonna get worse and they cause disruptions. Been a heat wave in Mexico this week, and the temperature in ten cities including Mexico City peaked around thirty four point three degrees Celsius, that's about ninety three point seven degrees Fahrenheit, and it's a tenth higher than the record, which was hit just a month earlier. Mexico's health ministry said that they have seen seven heat related deaths in this heat season. Between the start of March the seventeenth and May the fourth, and the tally could go even higher. And the down to climate change and El Niño, which has been pushing up temperatures across the globe. There was an interesting court case this week of federal appeals calls on Friday dismissed the lawsuit by four Republican led states. And they wanted to block the US Securities and Exchange Commission rule that required investment funds to categorize and disclose proxy votes on issues including environmental, social, and governance matters, ESG. But the three judge panel at the New Orleans based fifth US circuit court. Appeals said that Texas, Louisiana, Utah, and West Virginia lacked standing to challenge the rules. As they hadn't demonstrated how their citizens and the states would be harmed by the laws. So this was a piece of resistance back on having to disclose more information about environmental, social, and governance. Matters. They argued that the additional compliance costs would then be passed to fund the investors, including the states. But the court said it was speculative and there wasn't any clear evidence to support the claim. Of course, those states are claiming they would have been harmed because they've got oil and gas interests in Texas, and so it's a fight back from the fossil fuel lobby. The US auto safety regulator said on Friday it was opening preliminary investigations into complaints about diesel fuel leaks allegedly from two hundred thousand Ford vehicles, the Ford f two fifty, three fifty, four fifty, and five fifty, between twenty fifteen and twenty twenty one. There was a fracture in the secondary fuel filter in the vehicles which could result in fire and the NH TSA had contacted the maker of the filters, Alavard Segue, USA, and learned that secondary fuel filters are tested to operate at reduced levels of pressure during the manufacturing process compared with the possible maximum operating pressure experienced in the vehicle. Ford has said it's working with the NHSA to cooperate with the investigation. It's a first inquiry to establish whether the vehicles pose an unreasonable risk to safety, whether any action is taken will be for a later discussion. But the NHSAs said that it's got significant safety concerns over Ford's Recall of more than forty two thousand SUVs also related to fuel leaks and possible engine fires. Well, in the United Kingdom this week, there was some good news because apparently, The economy grew by zero point six percent between January and March, and that's the fastest growth rate in two years. The UK fell into recession at the end of last year after shrinking for two quarters in a row. I'm always skeptical about this news kind of being promoted in an election year because it seems to be claimed by the party in power that they're responsible for this. When the truth of the matter is, it's a statistic. It's what happened. Did you do anything to achieve that? Not really. It's what happens in the market that presents the position. Interest rates are currently at the highest for sixteen years. That means the borrowing rates higher domestic borrowing for mortgages. People have to pay more. And of course, if you're a business, you have to pay more for the loans that you take on. To invest in new business. And this week, the Bank of England held the interest rate at five and a quarter percent. They said they expect inflation too. Fall further and hoping that in the coming months, they'll be able to reduce the bank interest rate. The growth in the early part of the year is down to services mainly in sectors such as hospitality, arts and entertainment. That's according to the Office of National's Statistics. And there's also been an increase in consumer spending on things like clothing and home furnishings. But not sufficient to drive any inflation in that market, of course. But the good news is the economy is growing Many people might not feel better off, but that's what the stats say. It was about the first quarter of twenty twenty two when the growth rate hit about the same number. It was zero point six percent in the first quarter of twenty twenty four and it was zero point five percent back in the first quarter of twenty twenty two. But since then, it's been fairly flat zero point one percent positive and zero point one percent negative. And of course, in quarter three and quarter four of twenty twenty three, we had a zero point one percent fall and a zero point three percent fall. Those are the Office of National Statistics figures. Of course, the economy will be a central plank of the elections that take place probably in the autumn of twenty twenty four. Another piece of interesting news that caught my attention this week was that for the first time ever, mosquitoes have been identified in Scotland And for those of you listening out there that don't know, Scotland has a historically very cool climate. So to find mosquitoes, In the Scottish countryside is a complete conundrum. So what does it mean? Well, it means of course that one of the most common types of mosquitoes identified in Scotland by the University of Glasgow has reached Scotland. They found apparently sixteen types of mosquitoes Gito in Scotland, including the Cool Ex Pampians, which are prevalent in North and South America, and parts of Europe, as well as in Asia and North Africa, Professor Heather. Ferguson who's been leading the study said they were surprised to find these insects in all corners of the country. The warmer temperatures, of course, could lead to larger numbers of mosquitoes, which could transmit disease. So while we've all been to Scotland and experienced swarms of midges, which thrive in the warm and wet conditions in the scotchy summer, we're now gonna have to fight off those mosquitoes too. Mosquithos, of course, are larger than the midges and have a fibrosis, which they suck blood. Lovely isn't it? This means that mosquitoes are more feared across the world because they carry deadly diseases such as dengue, fever, which I've mentioned previously in the past. Yire and Zika. Two nineteen million people contract malaria from mosquitoes each year globally, and that causes about four hundred thousand deaths. They don't think that these particular types of mosquitoes that they found in Scotland will be carrying malaria bugs anytime soon, so I think you can relax. If you're planning a trip to Scotland, but it's interesting the impact of climate change, isn't it? And also, of course, travel because people bring back from their trips abroad, well alien creatures to the local environment. Probably these mosquitoes have been around for some time, but they've been discovered recently, and there's no hard evidence to support that. So the center for virus research will be keeping a close eye on how the developments shape up. The highest concentration of musketos and scones around Lokkenorde in Angus and Brewster, leans in Cape Ness. That's according to the BBC. But with the warmer temperatures overall and global warming, we're probably likely to see some more Another climate related story that caught my eye this week was about Venezuela being the first country in modern history to lose all of its glaciers, the international cryo sphere climate initiative, ICC, said on X that the South American nations only remaining glacier the humbled will lack corona in the Andes had become too small to be classed as a glacier. Venezuela has lost at least six other glaciers in the last century. So it's More evidence that the temperatures are rising, and as a result, ice caps are melting. There hasn't been much ice on the glaciers in Venezuela. Since the two thousands according to doctor Caroline Klassen, a glaciologist at Durham University. So more evidence about climate change if it were needed. Now I had an interesting conversation this week with Josh Seimana. He's the global risk and receivables director for a company called Jazz Worldwide, and he was telling me that he listens to use items to assess risk as one of his inputs to understand and assess global risk when it comes to establishing credit limits in particular countries and with particular companies. And you can hear that episode in full in the next couple of weeks. It will be coming your way. And then recommend that you stop by the chain reaction website and pick the episode up and have a listen. To what Josh had to say. Josh is an expert in the field of credit risk, and he's been managing credit risk for both jazz in the past three years and, of course, for the past thirty years or more at General Electric. So you'll want to stop buying Have a listen to that one. It's a great episode. Ethiopia exported eight thirty five million dollars worth of coffee this year. It was about a hundred and seventy four thousand five hundred and ninety six tons of coffee in the first nine months of the current. Twenty three twenty four fiscal year, according to the Ethiopian Coffee and Tea Authority. It's one of Africa's largest producers and exporters of Arabica beans. This week, the Pennsylvania floods in southern Brazil, and it caused a hundred and thirteen deaths. And it's yet another extreme event that's damaged infrastructure and is probably down to climate change. With the disappearance of the rain forest in Brazil. At an alarming rate, are we in for more of the same? A cheery little thought as we near the end of today's episode. Hundred and thirty six people are still missing, and more than a hundred and sixty five thousand have been displaced from flooded homes. And rescued by boats and helicopters. Access to Porto or Leggre is non existent, and looting has been reported at night. Three are branded dough. So we'll need at least nineteen billion rials, two point nine billion pounds to rebuild the damage, which is extended into farm areas around the capital. The fiscal impact of the flood is expected to be BRL seven point seven billion. About one point one nine billion pounds. As Britain raised to embrace service industries in line with many other economies around the globe over the last. Two to three decades, it forgot about some of its traditional large scale manufacturing industries. And of course, Extraction Industries too. There isn't really a cold industry to speak of anymore in Britain, and the steel works. Some of the last steel works that are still open in Britain and not owned by British Steel or any British company anymore. They're owned by Tarta, which is an Indian company. And of course, they've been putting pressure on the government to pass it funds to invest in the steelworks and also they're trying to close down. Some of the blast furnaces in those steel works and switching to electric for clean fuel. Now that's all very well, but it means that very soon Britain's unlikely to have any capacity to make the kind of steel it needs to protect itself, and it will be solely reliant on imports. The closure of the blast furnaces at Port Talbot in Wales unlikely to see the loss of two thousand eight hundred jobs. Foreign Getting, the welsh labor leader traveled to India to Tata headquarters in a last ditch attempt to hold up on the closures. He's requested the tarta wait until the new incoming labor government. Take power to see if a resolution can be agreed. Well, jumping a gun a little bit because we don't know if the Labour government is going to win, although it does seem very likely. This is one of the fondies, of course, of giving away those industries that many regard as the commanding heights of an economy. And if you read Daniel Jørgen's book, call the commanding heights, you'll see why it's necessary for countries to place their own national interests above commercial interest. Now there's been a revolution in the automobile industry in the past few years and there's lots of tech equipment now attached inside. Vehicles. The average car has a large number of sensors inside. It's certainly over a hundred and it's possibly three hundred, and they can generate about twenty five gigabytes of data for every hour that they're on the road. Not one time, if any crimes were committed, investigators would come along, take fingerprints inside the car, dust for those, see what they could gather, and any other evidence that they could physically pick up inside the vehicle. But nowadays, they're much more likely to be interested in the digital data that the car has about its whereabouts, its movements, and where it's been. But there are other concerns about privacy as a growing concern posed by Chinese made vehicles, EVs, which are set to dominate the European markets in a few years. A former head of MI six, Sir Richard Deal of, called for the government to consider banning Chinese EVs from sensitive UK infrastructure sites. And for every gear change and door opening to all journeys, These calls store the history of the locations where they've visited using satnav data and text based messages and any messages sent via hands free. Systems. The forensic vehicle examiner is likely to be able to pick up all this data. The colonel may have wiped their phone and bend their clothes and got rid of all the physical evidence of the crime. But the car remains a data repository. And the other concern, of course, for us, mere mortals, ordinary citizens, is that that data is transferred when you sell a car. If you don't wipe it clean and it might be stored by other parties. So who gets hold of all this data? Well, there's some serious questions and of course It's one of the reasons when we started the episode today, we talked about Biden's increasing tariffs for Chinese cars, and this, of course, is one of the reasons. And just before we close today, a barrel of crude oil is currently selling Brent. Crude for about eighty three point three seven dollars per barrel. We'll don't forget to drop by the Chain Reaction website and pick up any episodes you've missed, and also subscribe. That'd be the first to know of new episodes when they come along. Don't forget about a great episode coming on credit risk with Josh Simon. Well, that's it for this week. Thanks for joining me here on the generation pump test. And hope you've enjoyed the episode. Hope you learn something, hope you hear. But some of the ideas that you'd run maybe into practice, as you build that resilient supply chain and you stay ahead of the game. Stay informed, get some insights, and build that competitive advantage. I'm turning hands our son in off, and I'll see you next time in the chain action podcast. Bye for now.