trade war Archives - Art-Invests

Tech Tensions between China and the US escalates after US allies in Asia and Europe annountced restrictions on the sale of key technology to China. The Cyberspace Administration of China (ACA) has launched a probe into once of the America’s biggest memory chip makers, Micron Technogogy because of the cybersecury concerns. This action is perceived as an apparent retaliation.

The move of China come on the same day that Japan government said that it would restrict the export of advanced chip manufacturing equipment to China to curb China’s semiconductot industry, following the similar moves by the US and other allies.

ACA stated that the aim of this move is to targeting on “ensuring the security of key information infrastructure supply chains, preventing cybersecurity risks caused by hidden products problems, and maintaining national security.”

Micron Technology told CNN it was aware of the review from China authority and they are in communication with the CAC and are cooperating fully. Mircon derives more than 10% of its revenue from China. Its shares sank 4.4 % on Wall Street on Friday and closed another 1.2% lower on Monday following the news.

Image source: https://media.cnn.com/api/v1/images/stellar/prod/230403114022-micron-technology-building-file.jpg?c=16×9&q=h_720,w_1280,c_fill/f_webp

Investment

The inflation is making the West difficult to go further on Russian oil

June 28, 2022 Art-Invests | Investment of Art

European Union and the United States have barred the import of Russian oil to cut off the revenue source for Kremlin and force Vladimir Putin to reconsider the war in Ukraine. However, it seems like this measure hasn’t worked.

When EU and the US looked at the data, they found that Russia is making just as much money from oil export as it was before the invasion of Ukraine. At the same time, global inflation is surging, and it generates Politian pressure on leaders like US president Joe Biden, British Prime Minister Boris Johnson, and French President Emmanuel Macron.

In the recent G7 meeting, these leaders tried very much to reach a consensus on that to do next. However, on oil, only few options are available. several measures were being discussed. For examples, price caps on Russian oil imports and centralized purchasing, insurance bans on ships. Unfortunately, these tools have downsides, and they could push the oil price and inflation rate even higher. These prospective measures may come with significant costs directly to consumers in the US and Europe.

Nevertheless, there is an uptick in exports to Asia. China is currently taking advantages of huge price discounts. Russia is selling barrels of its Urals crude for about USD 35 cheaper than the Brent global benchmark. The Kremlin is still getting a pretty good price for their oil export. The West need to go further to get Russian oil off the market quickly, since any delay will give market participants time to come up with creative ways to skirt the rules.

To make it harder for China, India, and other countries to keep importing Russian oil, EU intends to phase in a ban on insuring ships. Such a move may push China and India to find replacement barrels, the price of oil could easily go rocket high.

Therefore, Treasury Secretary Yellen suggested that using price caps to push down the price of Russian oil and depress Putin’s revenues while allowing more oil supply to reach the global market.

Image source: https://cdn.cnn.com/cnnnext/dam/assets/220624114155-india-crude-oil-freight-file-restricted-exlarge-169.jpg

Investment

The global economy is on the edge of a precipice

May 26, 2022 Art-Invests | Investment of Art

The global economy is on the edge of a precipice, and it may be the biggest crisis since the Second World War.

The invasion of Ukraine has compounded the effects of the Covid-19 pandemic. It brings the cost of the food and fuel to skyrocket which weighing on the economic recovery and fanning inflation.

Rising interest rates are putting more pressure on countries, companies, and households. Climate changes, market turbulence and ongoing supply chain constraints also make the situation become more worse.

To lower economic stress, the IMP is calling for government officials and business leaders meeting in Davos to discuss reducing trade barriers.

However, earlier this month, Indian government decided to ban the export of wheat and it triggered the price of grain soaring. Some countries are heading in the opposite direction of IMF and implementing restrictions on trade in food and agriculture products that could probably exacerbate the shortages and push the prices even higher.

Image source: https://www.pexels.com/photo/american-and-chinese-flags-and-usa-dollars-4386371/

Investment

“Fragmentation” is underway

May 25, 2022May 25, 2022 Art-Invests | Investment of Art

“Fragmentation” – one the many buzzwords heard around Davos this week. “Fragmentation”, it is referring to a breakdown of the kind of free-wheeling, border-crossing trades and investments which have built the global economic order over the past three decades. It also means “deglobalization” – rebuilding fences between nations and nations.

Deglobalization won’t happen overnight but it is not a new issue. Supply-chain disruption, war in Ukraine, growing political divides and trade disputes are renewing concerns about a return of an era of isolation.

Here are the micro-deglobalization playing out in real time:

China’s ride-hailing giant Didi officially delisted its share from NYSE

Starbucks and McDonald’s pulled out of Russian market

Airbnb said it would pull all of it listings in China

Malaysia moved to restrict exports of Chicken to its neighbors

Microsoft slowly scale back their China practice

These supply chains have been built over 30 years, so it’s just really difficult to move them into another country. The US baby formular shortage is a huge public health crisis that indicates the peril of relying too much on domestic production for essential goods. It is far more complicated if governments around the world are doing deglobalization.

Image source: https://www.pexels.com/photo/antique-antique-globe-antique-shop-antique-store-414916/

Investment

Thousands of UK “Fish-and-Chips” shops would be closed in a year. Here is the reason.

May 18, 2022 Art-Invests | Investment of Art

Fish-and-chips shops in the United Kingdom are under a great pressure as the key ingredients – cods and sunflower oil keep soaring because of the war in Ukraine.

Nearly third of the fish-and-chips restaurants will be expected to be closed in the next few months. The prices of the main ingredients started rising at the end of 2021. And the costs go even further upward when Russia invaded Ukraine. It’s because nearly 40% of the industry’s cod and haddock come from Russian waters and 50% of its sunflower oil imported from Ukraine.

Business owners are struggling with higher costs as supply chain have been exacerbated by the war in Ukraine. The shops owners cannot make enough margins to survive. It’s too difficult for the shops to raise prices as customers expect the fish and chips to be in a reasonable price.

Business owners also fear that the UK government will impose harsh import tariffs on Russian products. It will push Business to stock up on alternatives and make business in UK become more difficult.

Image source: https://www.pexels.com/photo/fried-food-with-two-cup-of-drinks-on-table-2053891/