Economist (January 11)
“The industries that will suffer most from new regulatory barriers to frictionless trade are those like aerospace, cars, chemicals, food and drink, and pharmaceuticals that rely on uninterrupted supply chains across Europe. They are concentrated in the midlands and north—exactly where Mr Johnson won his new Tory majority. If his weakness in the negotiations causes him to lose favour in those areas, his new domestic strength will be at risk.”
Tags: Aerospace, Brexit, Cars, Chemicals, Drink, Europe, Food, Frictionless trade, Johnson, Pharmaceuticals, Regulatory barriers, Supply chains, Tory, Weakness
Washington Post (October 16)
A no-deal Brexit has “been compared to “downshifting a car at full speed from fifth gear to first.” The U.K. could lose “continuity of trade relations with many of the 71 nations that have forged preferential trade agreements with the EU.” To date, the U.K. has secured continuity agreements with only about a dozen of these countries and it remains to be seen whether sufficient customs infrastructure will be in place. “Large U.K. businesses like engine-maker Rolls Royce Holdings Plc and brewer Heineken NV have outlined plans to hoard supplies in case a tumultuous Brexit chokes just-in-time supply chains and creates backlogs at ports.”
Tags: Brexit, Continuity, EU, Heineken, No-deal, Ports, Rolls Royce, Supply chains, Trade agreements, UK
Wall Street Journal (May 11)
The tariff spat with China “is a political trade risk the economy hasn’t faced since the 1930s, and no one knows where it might end.” Although there “will be many economic losers,” including U.S. farmers who are getting hit hard, “the broader cost is a continuation of policy uncertainty, as CEOs and investors can’t be sure about their supply chains, their cost of goods and raw material, or how long the tariff brawl will last.” Ultimately, “the impact on GDP is hard to calculate but it’s real.”
Tags: CEOs, China, Cost of goods, Economic losers, Economy, Farmers, Investors, Supply chains, Tariff, Trade risk, U.S., Uncertainty
Forbes (May 6)
“The trade war with China has pushed worries about supply chains from the No. 19 spot in 2017 to No. 12 in 2018. Companies in North America rate it at No. 8, mostly because of the new Nafta. The sharp rise in rankings for all things trade related shows that either companies have been preparing for this moment, or are worried that they are not prepared enough.”
Reuters (July 5)
“Investors watching the trade tit-for-tat between the United States and China may well have reason to fear the havoc a full blown conflict between the world’s two biggest economies could wreak on the global economy.” Furthermore, the collateral damage could be worse than that done to the principals. Due to global supply chains, countries like Taiwan, Hungary, the Czech Republic, South Korea, and Singapore could be equally if not more vulnerable” to fall out from the spat between the U.S. and China.
Tags: China, Collateral damage, Conflict, Czech Republic, Global economy, Hungary, Investors, Singapore, South Korea, Supply chains, Taiwan, Tit-for-tat, Trade, U.S., Vulnerable
Wall Street Journal (June 21)
Investors aren’t quite sure “how to trade a trade war.” Some obvious stocks like Boeing and Caterpillar are being hit hard, but for many others there’s a lack of information on the potential impact, “partly because supply chains are so complex.” While there’s much to “suggest that trade war fears haven’t sunk in properly,” the bigger issue is that it is challenging “to price in something you don’t understand, and the implications of a trade battle are obscure, at best.” We don’t know “precisely which products will be targeted in the next round, or how long the tariffs will last.”
Tags: Boeing, Caterpillar, Complex, Fears, Impact, Implications, Investors, Obscure, Products, Supply chains, Targeted, Tariffs, Trade war
Financial Times (August 13)
“Mr Trump’s campaign promises to rip up trade agreements and protect heavy industries like steel are running into the complex realities of international supply chains.” By examining actual U.S. business practices, “you encounter how the president’s economic nationalism is clashing with the complexities of what the label ‘Made in America’ actually means in today’s world.”
Tags: Clashing, Complexities, Economic nationalism, Promises, Realities, Steel, Supply chains, Trade agreements, Trump, U.S.
CFO Magazine (May Issue)
“In the face of extreme weather and natural disasters, companies are reengineering their supply chains for added reliability.” ATMI, Kimberly-Clark, Royal Caribbean and Ford Motor are just a few of the companies “that have elevated climate change in their enterprise risk management methodologies. Indeed, according to a September 2012 survey by the independent Carbon Disclosure Project, 83% of S&P 500 companies are integrating climate change into ERM processes.”
Tags: Carbon Disclosure Project, Climate change, Enterprise risk management, Extreme weather, Natural disasters, Reliability, S&P 500, Supply chains
Reuters (April 25)
Profitability is expected to suffer at firms listed on the Tokyo Stock Exchange’s first section. According to Barclays Capital, average net profit “will fall 12 percent this financial year, with the slide led by export-related industries such as auto and electronics firms.” Markets may already have factored this into share prices. There may even be some upside. “Some investors are encouraged by the speed at which power generation capacity has recovered since the quake, and initial plans to force large users to cut back by a quarter may be eased.” In addition, there are hopes that later in the year supply chains will stabilize and consumption will benefit from rebuilding and relief efforts.Profitability is expected to suffer at firms listed on the Tokyo Stock Exchange’s first section. According to Barclays Capital, average net profit “will fall 12 percent this financial year, with the slide led by export-related industries such as auto and electronics firms.” Markets may already have factored this into share prices. There may even be some upside. “Some investors are encouraged by the speed at which power generation capacity has recovered since the quake, and initial plans to force large users to cut back by a quarter may be eased.” In addition, there are hopes that later in the year supply chains will stabilize and consumption will benefit from rebuilding and relief efforts.
Tags: Electricity, Forecast, Japan, Profit, Share prices, Supply chains, TSE
