Supply Chain last week, news by Hebei Longsheng
| Following an extended period of focus on medical supply protectionism, the challenges presented by food supplies during the COVID-19 pandemic are becoming more visible. Our research this week considered three issues of protectionism, physical disruptions and regulations that have to be considered. The latter include an emerging spat between China and Australia that's acting to the detriment of the latter's exports of barley and beef. The automotive sector meanwhile has suffered another month of collapsing sales just as manufacturers start to reopen plants, while the different timing of reopenings in the U.S. and Mexico will be a challenge. The electric vehicle sector though is still proceeding as planned despite a reduction in parts shipments. There are also ongoing trade policy complications in terms of a new trade investigation into steel wire used in tires. The apparel retail sector has been hit particularly hard, with Under Armourseeing revenues in Q2 slump 50-60% - the topic of this week's featured research. H&M has faced similar issues, but unlike its peers has not yet slashed its imports to the U.S. The Trump administration's tariff burden sharing scheme may not have succeeded in delivering many benefits for U.S. importers, but the overall level of tariffs nonetheless fell to its lowest level since June 2018 in April as a result of the phase 1 trade deal. The logistics sector is still facing a challenging time with reduced dividends, capital increases and state loan guarantees, though Cosco Shipping and Evergreen have still managed to increase their U.S.-seaborne imports. The U.S. port sector, and particularly Norfolk, has also continued to see a downturn in activity, though not by as fast a rate as many had feared. That didn't stop a sharp drop in U.S. logistics employment in April. There was, however, a surge in less-than-container load shipments to the U.S. as Chinese manufacturers started to reopen. Trade policy challenges continue to abound. The latest U.K. trade data has shown a slump in medical supply imports from Europe just as EU-U.K. negotiations have continued to flail. The geopolitical risks caused by worsening U.S.-China relations, flagged in last week's Supply Chain Edge, have had added impetus from slow U.S. exports of both liquefied natural gas and soybeans. The latter continues to face competition from Brazilian exporters. U.S.-China worries may also be driving companies to bring forward plans for investment in the U.S. as shown by potential semiconductor investments by Intel and TSMC. Most reshoring plans, such as Apple's for its AirPod line, don't involve the U.S. however. U.S. trade policy has also expressed itself via national security reviews, with the mobile crane sector being just the latest to face an investigation. Not everyone is losing out of course, with suppliers of consumer electronics for work-from-home and gaming seeing increased sales, including Corsair. By Hebei Longsheng Metals & Minerals Co,. Ltd. |
