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<ul class="summary-list"><li>Donald Trump's election victory last week is already having an effect on global supply chains.</li><li>While many firms are waiting to see what Trump's trade policies will be, some are moving ahead.</li></ul>Last week's electoral victory of Donald Trump is having an immediate effect on global supply chains, with several companies publicly discussing production changes they've made ahead of his return to the White House.During the campaign, Trump vowed to enact sweeping trade restrictions ranging from across-the-board import duties to increasing the cost of goods from China through tariffs as high as 60% to 100%.The wide range of possible outcomes has many firms waiting to see what the actual trade policies will be before enacting a final plan. Others are already moving ahead with elements of their supply chain strategy."I don't think anybody's surprised," TD Cowen analyst Oliver Chen told Business Insider. "The probability factor was high for either side."Further softening the element of surprise is the fact that the world has already experienced Trump's approach to trade — and China in particular — in his previous administration, which led many companies to develop more flexible sourcing.Bark Box CEO Matt Meeker called the reelection of Donald Trump "a bit of Groundhog Day for us."Before Trump became the Republican nominee, many companies were already exploring alternatives to their former reliance on China by finding partners in other Asian countries, or by "near-shoring" production to the Americas.Much of the executive commentary on earnings calls during election week signaled a wait-and-see approach regarding what the Trump administration will enact. Executives have also touted the agility of their current strategies.Several companies, however, aren't waiting to make changes to their supply chains.Premier Inc., a healthcare company that provides an array of products and services, said it has brought production of essential items, like face masks and isolation gowns, closer to the US as part of a multi-year effort to lessen dependence on Southeast Asia.Last week, CEO Michael Alkire said Premier's partners are asking the company to continue looking for sourcing that will be less affected by tariffs.Fortune Brands, which owns a portfolio of home products brands like Moen plumbing fixtures and Yale locks, has been rethinking its supply chain since Trump's tariffs in 2017."We've moved away almost everywhere from single source," CEO Nick Fink said. "Your secondary source may cost you a bit more than your primary source, but if your primary source were to become more expensive because of tariffs, you can dial that down and dial up your secondary source and rebalance it to be the most efficient.""We are very well positioned to handle increased tariffs," he added. "We don't invite it because it's a lot of hard work."In consumer goods, cooler brand Yeti started production earlier this year at its second non-China drinkware factory and said it is in the process of opening a third. By the end of next year, half of its drinkware production capacity will be out of China, the company said.Outdoor equipment and lifestyle products maker Clarus said it still has some production in China — Black Diamond headlamps and footwear — and is moving production to Vietnam and other countries.If a significant tariff increase is directed at China, Black Diamond brand president Neil Fiske said the company is prepared to pull orders forward."We may end up hedging inventory a little bit to buy us consistency in our pricing as we diversify," he said.Meanwhile, Rivian founder and CEO Robert Scaringe said the EV maker has chosen suppliers that it doesn't expect to ever be exposed to large tariffs, as well as writing contracts "in such a way that we're not carrying much of the risk.""What's going to be interesting is how far this reaches into the upstream supply chain," he added, referring to raw materials like steel and lithium. "That's something that every manufacturer, certainly ourselves included, are thinking about."Not everyone is talking trade, however.US trucking and logistics company Schneider National's executive vice president, Jim Filter, said clients are not yet asking him about how to get ahead of tariffs.If they do, he said, "that would happen at a little bit faster pace than what we would normally see, as currently our customers are really operating just under normal replenishment cycle, preparing for this holiday push."

Trump's win is already scrambling supply chains

<ul class="summary-list"><li>Hurricane Helene, the dockworkers' strike, and Middle East conflict threaten to upend the US economy.</li><li>Oil prices are up as conflict widens between Israel and Iran.</li></ul>A sudden flurry of global developments has the US economy staring down a troubling trifecta of major crises.Devastation from Hurricane Helene, a dockworkers' strike, and escalating conflict in the Middle East all threaten to scramble supply chains and inflate prices. The confluence of events comes just as the US economy is recovering from a years-long bout of elevated inflation. Coupled with a cooling but still-strong labor market, it looked possible the US would avoid a recession. These events could threaten that.While the effects of Iran's<a target="_blank" href="https://www.businessinsider.com/iran-attacks-israel-with-missiles-after-hezbollah-leader-killing-2024-10"> missile</a> attack on Israel on Tuesday are more speculative, the other two crises happening on American soil could have more predictable impacts. Experts point to direct impacts on the prices of goods like oil, food, and industrial equipment as well as infrastructure damage that would create knock-on effects across industries.For now, it's a waiting game. Many of the effects depend on how long the strike and cleanup last and how quickly the parties responsible for resolving them can act.<h2 id="bb66dc7c-8a7f-46f6-83fe-f763c7971b08">1. Escalation in the Middle East</h2>On Tuesday, the risk of a full-blown war between Iran and Israel escalated when Iran <a target="_blank" class="" href="https://www.businessinsider.com/iran-attacks-israel-with-missiles-after-hezbollah-leader-killing-2024-10">launched a massive ballistic missile</a> attack on its adversary.It came less than a day after Israel ramped up its attacks on Hezbollah with an invasion of southern Lebanon. The heightening conflict also threatens to <a target="_blank" class="" href="https://www.businessinsider.com/us-warns-severe-consequences-for-iran-after-attack-on-israel-2024-10">further entangle the US</a>, which announced it's sending additional fighter jets and thousands of troops to the Middle East to defend Israel and reinforce US troops already in the region.Since Iran's offensive, the price of oil has surged up, raising concerns that a broader conflict could push oil and gas prices higher. When petroleum prices rise, that also impacts the cost of plastics, which could raise prices on a range of goods. Some experts <a target="_blank" class="" href="https://www.theguardian.com/world/2024/oct/02/israel-iranian-oil-refineries-retaliatory-strikes">warn that Israel could target Iranian oil production facilities</a> in potential retaliatory attacks, which could risk further oil price increases."History would say that when there is conflict in the region, the prices of petroleum remain elevated and could continue to rise," Douglas Kent, an executive vice president at the Association for Supply Chain Management, told Business Insider.<h2 id="74292a69-7822-4de1-bb2c-cdde4749d751">2. Dockworkers on strike</h2>Also on Tuesday, dockworkers at all the eastern US ports from Maine to Texas went on strike, threatening <a target="_blank" class="" href="https://www.businessinsider.com/dockworkers-port-strike-ila-impacts-2024-10">a slew of adverse economic impacts</a>, including increased prices on key goods ahead of the holiday shopping season.About 30% of goods imported to and exported from the US pass through the East Coast and Gulf ports, according to a Morgan Stanley analysis, along with about <a target="_blank" class="" href="https://www.businessinsider.com/us-economy-markets-react-israel-iran-escalates-dockworkers-strike-helene-2024-10">half of all US ocean imports</a>. The strike could cause shortages of goods and push consumer prices up, but how much depends entirely on how long the work stoppage lasts, experts say.A few days of snarled supply chains likely wouldn't be a major hit to the economy, while a week or longer could have major impacts. Every day, the work stoppage is costing the economy up to $4.5 billion, according to JPMorgan analysts. If the strike goes for at least two weeks, it may <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/us-port-strike-biggest-stock-market-winners-losers-investing-analysis-2024-10?_gl=1*w94t9f*_ga*MTM5OTQyNzAxOS4xNjc1MDExMTIw*_ga_E21CV80ZCZ*MTcyNzg4MTM4OC4zNTQuMS4xNzI3ODgzOTYyLjQ5LjAuMA..">increase inflation.</a> If it lasts a month, it could <a target="_blank" class="" href="https://www.businessinsider.com/port-strike-impact-costs-us-economy-recession-outlook-shipping-delay-2024-10">cause a recession</a>.And the strike will also have knock-on impacts. For every day the ports are closed, it will take an estimated five days for supply chains to get back to normal, Kent said."We are in a bit of a wait-and-see mode about what the impacts are going to be," Sameera Fazili, former deputy director of the National Economic Council under Biden, told BI. "If the strike goes on for one day or three days, it could take two weeks for some companies to recover, some industries to recover, it could take months for others to fully recover."Some of the imported consumer goods <a target="_blank" href="https://www.businessinsider.com/consumer-products-most-likely-to-be-impacted-by-port-strike-2024-9">most vulnerable to the port closures</a> include perishable foods like fresh fruits and vegetables, wine, beer, liquor, toys, tires, furniture, and raw commodities like salt, sugar, and gypsum. Kent noted that automotive, pharmaceutical, and industrial equipment supply chains are also vulnerable. US meat, dairy, and poultry exports <a target="_blank" class="" href="https://www.businessinsider.com/us-port-strike-hurt-agriculture-livestorck-dairy-farmers-presidential-election-2024-10">could also be disrupted</a>, as well as coal and heavy agricultural equipment.How much the strike impacts prices depends on how much of a cushion companies have built to deal with any bottlenecks. With the memory of pandemic supply chain crises still fresh, many businesses have become better prepared for disruptions by importing goods ahead of schedule in anticipation of the strike or <a target="_blank" class="" href="https://polb.com/port-info/news-and-press/port-of-long-beach-achieves-busiest-month-on-record-09-12-2024/">diverting shipments</a> to West Coast ports."The 2020 disruption presented unforeseen challenges but encouraged many firms to diversify their supply chain and seek backup sourcing: preparation that will likely soften the blow of the dockworker strike," Lauren Saidel-Baker, an economist at ITR Economics, said in a statement.But mitigation efforts, including redirecting shipments, cost money and push prices up. Bottlenecks also encourage carriers to raise their prices, increasing retail and consumer goods prices, Kent said.Fazili said she's confident the dockworkers' union — the International Longshoremen's Association — and the organization representing their employers — the United States Maritime Alliance — can come to a deal to raise wages and improve benefits for workers. With the election looming, Biden administration officials are particularly incentivized to grease the wheels of their negotiations.<h2 id="b5a7373b-dcda-4543-bf11-a8ea2a739cbd">3. Natural disaster strikes the South</h2>All of this comes as Southern states are scrambling to handle the fallout from a superstorm with billions of dollars in damage. Dozens of people have been killed in the flooding, landslides, and high winds wrought by Hurricane Helene, which washed out an untold number of roads, destroyed homes, and devastated entire towns. Rescue and recovery efforts are still underway, with <a target="_blank" class="" href="https://www.wcnc.com/article/weather/hurricane/helene/north-carolina-hurricane-helene-missing-people-finder-victims-survivors/275-d811bbc2-754d-4637-b156-7e4af6e1eadb">hundreds of people still missing</a>, particularly in North Carolina.The storm will likely have far-reaching economic impacts, including the immediate costs of providing emergency services for thousands of residents left homeless or without power or water, and the longer-term costs of rebuilding roads, bridges, and other infrastructure. Helene has likely caused between $15 billion and $26 billion in damage to property on top of about $5 billion to $8 billion in lost economic output, according to Moody's Analytics.In the immediate wake of the storm, a slew of residents across the affected states have <a target="_blank" class="" href="https://www.businessinsider.com/price-gouging-complaints-surge-hurricane-helene-states-fuel-water-hotels-2024-10">reported price gouging</a> by hotels, gas stations, and grocery stores. The hurricane has also disrupted some supply chains, including <a target="_blank" href="https://www.axios.com/2024/10/01/hurricane-helene-iv-fluid-shortage-health-supply-chain">healthcare supplies</a> and high-purity quartz needed <a target="_blank" class="" href="https://www.businessinsider.com/quartz-mine-computer-chips-hurricane-helene-spruce-pine-semiconductor-2024-9">for semiconductor manufacturing</a>."The combination of these events just reemphasizes how important it is for the private sector and companies, which are the ones that control supply chains, to move away from just-in-time and from efficiency only and to recognize that disruptions are on the rise and they ought to be better prepared for that," Fazili said.But the superstorm also threatens much longer-term economic damage, hitting the property insurance industry and the federal flood insurance program. Homeowners in affected areas will likely deal with rising property insurance costs or even lose coverage altogether, experts say."In the short run, the most costly element of the disaster is the damage to homes, property and infrastructure," Adam Kamins, a senior director at Moody's Analytics, told BI. "Longer term, the disaster itself is unlikely to drive people out of the hardest-hit areas, but insurance premiums could rise, denting affordability. This would be especially difficult for Florida, where many private insurers have already left the state."

A trifecta of global crises could snarl supply chains and increase prices

The <keyword id="21233022" type="General" weightage="20" keywordseo="Indian-textile-industry" source="keywords">Indian textile industry</keyword> is set to experience developments in 2024, driven by improving demand in <keyword id="21017131" type="General" weightage="20" keywordseo="export-markets" source="keywords">export markets</keyword>, resilient consumer spending in key sectors, and favourable geopolitical conditions, according to the B&amp;K Securities report. In the ready-made garments (RMG) sector, the demand offtake in export markets is anticipated to show substantial improvement in 2024. While domestic demand is expected to remain moderate due to lower discretionary spending and overstocking from the previous fiscal year, the recovery in export demand is promising. The domestic market could see a boost in the second half of FY25, supported by an increase in wedding days and festive season, although the rise in realisations is likely to be marginal. The export growth in RMG is expected to be driven by a combination of factors including restocking by Western retailers, increased demand for spring-summer collections, and a general uptick in retail sales. The anticipated interest rate cuts in the US will further stimulate demand. India's RMG exports will also benefit from stable cotton prices and uninterrupted supply, enhancing cost competitiveness on the global stage. The ongoing crisis in Bangladesh, a major player in the global RMG market, presents a temporary tailwind for Indian exporters. However, the benefits for India are expected to be short-lived due to differences in product portfolios and Bangladesh's trade agreements with the European Union. Over the medium to long term, India could see more substantial gains as global buyers continue to diversify their <keyword id="19959553" type="General" weightage="20" keywordseo="supply-chains" source="keywords">supply chains</keyword> away from China and Bangladesh, particularly as Bangladesh faces challenges such as rising wages and the loss of its Least Developed Country (LDC) status by 2029. The <keyword id="21356289" type="General" weightage="20" keywordseo="home-textiles" source="keywords">home textiles</keyword> segment is poised to continue its growth trajectory, primarily driven by robust consumer spending in the United States, which accounts for approximately 60 per cent of India's home <keyword id="21353395" type="General" weightage="100" keywordseo="textile-exports" source="keywords">textile exports</keyword>. The market share of Indian players in the US has been steadily increasing, supported by the China+1 strategy adopted by big box retailers to diversify their supply chains. India's competitive advantage in raw material costs and increased domestic capacity will likely sustain its dominance in the US home textiles market. The Free Trade Agreement (FTA) negotiations with the UK and the European Union offer additional opportunities for growth, potentially leading to higher margins and increased market share for Indian players. While the industry is on a positive trajectory, it faces near-term challenges such as logistical disruptions due to the Red Sea crisis and uncompetitive domestic cotton prices. Moreover, as sustainability becomes a major theme in <keyword id="21977676" type="General" weightage="20" keywordseo="western-markets" source="keywords">Western markets</keyword>, <keyword id="804823" type="General" weightage="20" keywordseo="Indian-textile" source="Orion">Indian textile</keyword> companies will need to invest in compliance with these evolving norms to remain competitive. (ANI)

Indian textile exports to remain strong amid global shifts; FTA negotiations with EU to offer growth opportunities

<ul class="summary-list"><li>Hundreds of pagers throughout Lebanon were detonated on Tuesday.</li><li>An attack of this scale likely required months of planning, an arms expert told BI.</li></ul>The Tuesday <a target="_blank" class="" href="https://www.businessinsider.com/iran-backed-hezbollah-members-hurt-after-pagers-just-weirdly-exploded-2024-9">attack in Lebanon,</a> where hundreds of pagers used by the Iran-backed militant group Hezbollah simultaneously detonated, points to a highly sophisticated operation that likely required months of planning and an infiltration of a global supply chain, experts told Business Insider.At least 2,800 people were injured and 12 killed, The Associated Press reported, citing the Lebanese Health Ministry. The pagers exploded in Lebanon around Tuesday late afternoon. On Wednesday, a more limited attack involving <a target="_blank" class="" href="https://www.businessinsider.com/more-devices-explode-in-lebanon-after-deadly-hezbollah-pager-blasts-2024-9">walkie-talkies and solar equipment</a> that exploded injured hundreds more and killed at least 20 people, according to the <a target="_blank" class="" href="https://apnews.com/article/lebanon-israel-exploding-pagers-hezbollah-syria-ce6af3c2e6de0a0dddfae48634278288">AP report</a>, which cited the Lebanese Health Ministry.Israel has not commented or claimed responsibility for the attack. US and other officials who were briefed on the operation and who spoke on the condition of anonymity told <a target="_blank" href="https://www.nytimes.com/2024/09/17/world/middleeast/israel-hezbollah-pagers-explosives.html">The New York Times</a> that Israel was behind the attack and infiltrated a batch of Taiwanese-branded pagers in order to plant explosives inside the device.Spokespeople for the Israel Defense Forces and the US Department of Defense did not immediately respond to a request for comment from Business Insider.An attack of this size requires a massive amount of technical capabilities involving intelligence gathering and months of planning, a national security expert and arms expert told BI."The scale of this operation suggests a complex supply-chain attack executed by a state actor," N.R. Jenzen-Jones, a director at the Armament Research Services, told BI. "This would have required a significant investment in terms of manpower and other resources, and likely months of planning."And if Israel was indeed behind the attack, as US officials have said, then it comes as no surprise from a country that has already proven its technical prowess, Sean McFate, a national security and foreign policy expert at Syracuse University's Maxwell School of Citizenship &amp; Public Affairs, told BI."Israel is a very tech-savvy state with its own 'Wadi Valley,' as they put it," McFate said.Supply-chain experts also told BI that the attack showcases how vulnerabilities in global supply chains are often overlooked and can be exploited in warfare."The fact that explosives were implanted in the pagers before reaching Hezbollah shows the challenges of securing electronics sourcing, especially with international shipments," Robert Khachatryan, CEO of Freight Right Global Logistics, told BI.Images online appear to show that the pagers in the attack had branding from <a target="_blank" class="" href="https://www.businessinsider.com/hezbollahs-exploding-pagers-bought-taiwanese-company-denied-israel-explosive-material-2024-9">Gold Apollo</a>, a company based in Taiwan, <a target="_blank" class="" href="https://www.nbcnews.com/news/world/taiwan-firm-denies-making-pagers-used-lebanon-explosions-rcna171594">NBC News</a> reported. The company told the outlet in a statement that a Hungary-based entity called BAC Consulting was authorized to use Gold Apollo's branding and that the "design and manufacturing of the prodcuts are entirely handled by BAC."Cristiana Bársony-Arcidiacono, the chief executive of BAC, denied making the pagers in a statement to NBC News and said that she was "just the intermediate."Gold Apollo did not immediately respond to a request for comment. Business Insider was not able to reach BAC Consulting for comment. The company's website appeared to be down as of Wednesday evening.Jenzen-Jones said that while supply chain attacks are often thought of in the context of cyberattacks, "sabotaging enemy supply lines has a long history in warfare."In 2012, The New York Times published a story about a US-run covert program for <a target="_blank" class="" href="https://archive.nytimes.com/atwar.blogs.nytimes.com/2012/11/07/dirty-tricks-of-government-forces-where-deception-and-deadliness-meet-inside-a-gun/">booby-trapping ammunition</a> intended to be used by the Taliban.The size of Tuesday's attack in Lebanon and the targeting of an object like a <a target="_blank" class="" href="https://www.businessinsider.com/hezbollah-decided-months-ago-switch-from-cellphones-pagers-just-exploded-2024-9">pager</a> rather than weapons is what makes this operation different, Jenzen-Jones said."For an attack of this sort — one using modified everyday objects to deliver potentially lethal effects in a targeted fashion — the scale of the operation is unprecedented," he said.

The detonation of pagers used by Hezbollah shows the depths of supply-chain infiltration

<ul class="summary-list"><li>General Motors is investing $625 million in the electric vehicle supply chain.</li><li>The funds will help Lithium Americas Corp develop and operate a major lithium mine in Nevada.</li></ul>Detroit-based automaker General Motors is pumping money into the domestic supply chain for electric vehicle batteries.Canadian mining company Lithium Americas Corp announced in a <a target="_blank" class="" href="https://www.businesswire.com/news/home/20241016466651/en/">press release</a> on Wednesday that GM investing a total of $625 million to fund the mining of lithium carbonate, a critical component of EV batteries. The cash-and-credit joint venture will fund the development, construction, and operation of the Thacker Pass lithium mine in Humboldt County, Nevada, in which GM will acquire a 38% asset-level ownership stake, the press release states.The automaker's investment in Thacker Pass, the<a target="_blank" class="" href="https://lithiumamericas.com/news/news-details/2024/Lithium-Americas-Provides-a-Thacker-Pass-Construction-Plan-Update/default.aspx"> largest known lithium resource in North America</a>, will also help Lithium Americas unlock a $2.3 billion conditional loan from the US Department of Energy, which was first announced earlier this year, the mining company said.GM will give $430 million in cash to help fund the building of Phase 1 of the mine, as well as a $195 million letter of credit facility to be used as collateral for the DOE loan, according to the press release."Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass," Jonathan Evans, President and CEO of Lithium Americas, said in the company's press release."Today's joint venture announcement is a win-win for GM and Lithium Americas," Evans continued.Jeff Morrison, GM's senior vice president of global purchasing and supply chain, said in Wednesday's press release that investing directly in the raw materials needed for EVs will help the company develop a resilient supply chain and "manage battery cell costs, deliver value to our customers and investors, and create jobs."GM's investment in the EV supply chain comes after the automaker announced this summer that it <a target="_blank" class="" href="https://markets.businessinsider.com/news/etf/auto-industry-pulls-back-on-evs-as-consumers-hesitate-over-high-price-inconvenience-1033570316#:~:text=On%20Wednesday%2C%20General%20Motors%20Co,from%20200%2C000%20to%20250%2C000%20vehicles.&amp;text=Even%20Tesla%2C%20Inc.,investment%20in%20battery%2Dpowered%20vehicles.">would be scaling back its 2024 EV production goal</a> by 50,000 units, as consumer demand for the battery-powered vehicles has waned and sales have slowed down.Even so, the investment by GM will help the automaker secure a steady domestic supply of battery metals.Despite the auto industry's recent pullback on EV production, lithium mining company Rio Tinto agreed last week to take over Arcadium Lithium for $6.7 billion, under the expectation that lithium demand will increase in the coming decade, <a target="_blank" class="" href="https://www.wsj.com/business/rio-tinto-to-acquire-arcadium-lithium-for-6-7-billion-2bce3360?mod=article_inline">The Wall Street Journal reported</a>.

GM makes a $625 million lithium-battery move to shore up its EV supply chain

<ul class="summary-list"><li>US presidential candidates Biden and Trump both vow to get tough on China.</li><li>EIU predicts worsening US-China economic and diplomatic ties over the 2020s.</li></ul>The US presidential election is less than six months away, and Democratic and Republican presidential nominee frontrunners Joe Biden and Donald Trump have both vowed to get tough on China.Despite this, China will likely extend its reach in the global supply chain, the Economist Intelligence Unit, or EIU, wrote in a note on Tuesday.The EIU, which is expecting Biden to retain the US presidency, expects "a sustained worsening" in economic and diplomatic ties between China and the US over this decade — regardless of who wins the election."Either president will pursue policies aimed at exerting further pressure on China's technology sector, while also justifying future trade and investment restrictions based on national security concerns," wrote the EIU analysts.In April, President Biden <a target="_blank" rel="" href="https://www.businessinsider.com/biden-sells-blue-collar-workers-american-dream-failing-china-steel-2024-4">called for</a> a tripling of tariffs on Chinese steel and aluminum imports, echoing former <a target="_blank" rel="" href="https://www.businessinsider.com/trump-tariff-china-trade-war-consumer-goods-2018-9">President Donald Trump's levies</a> on a range of goods from China.Trump said in February he would slap tariffs of over 60% on Chinese goods if he's elected.Should Biden win the presidency, he is expected to continue to continue working with like-minded governments."The primacy of US security and economic goals in Mr Biden's diplomatic agenda will still ensure a degree of collateral damage to economies that have deep trade and investment linkages with China," wrote the EIU analysts.They added that if Trump wins the presidency, he is likely to take a "much more antagonistic approach" to the US-China relationship, which risks collateral damage to third-party economies."This would return bilateral diplomatic and trade relations to the state of volatility that characterized his first term," the EIU analysts wrote.However, the EIU said it doesn't expect either Biden's or Trump's trade policies to reduce China's role in global production networks significantly.It is instead expecting the extension of China-linked supply chains via "capital-hungry markets" in Latin America and Southeast Asia."These same dynamics will ultimately make many of these emerging markets vulnerable to an escalation of trade hostilities with the US," EIU's analysts added.As it is, Chinese manufacturers may already be skirting sanctions by using <a target="_blank" href="https://www.businessinsider.com/china-using-mexico-skirt-us-import-tariffs-trade-economy-2024-3">Mexico as a backdoor</a> to get exports into the US.Even Chinese manufacturers are shifting their production out of China to other <a target="_blank" href="https://www.businessinsider.com/chinese-supply-chains-moving-companies-outside-mainland-2023-4#soon-to-be-the-worlds-most-populous-country-india-is-an-attractive-manufacturing-base-due-to-its-vast-lands-and-young-populations-1">low-cost manufacturing hubs</a> in Asia, including Vietnam and Bangladesh, to avoid geopolitical risks.

China's footprint in global supply chains will grow no matter who wins the US presidential election: analysts

<ul class="summary-list"><li>Last month, the Fed joined a slew of central banks in easing monetary policy.</li><li>That's led the market to assume rates will fall to pre-pandemic lows, BofA's Bernard Mensah says.</li></ul>The Federal Reserve joined other central banks in easing monetary policy last month, but that doesn't mean rates are returning to ultra-low levels see in the years before the pandemic, Bank of America's Bernard Mensah said. Mensah, the bank's head of international operations, pointed to a range of factors that could boost inflation, like shifting supply chains, rising wages, and geopolitical risks."My instinct has been that all of those things add inefficiencies in the system, and as we're moving to a different, perhaps, type of globalization, that we might find that the underlying trend inflation rate is a little bit higher than before," Mensah said in a Wednesday interview with Bloomberg TV.Mensah's comments come amid a flurry of rate cuts from central banks in the US, China, the EU, England, Switzerland, Sweden, Canada and Mexico, among others.Those rate cuts have led the market to expect US interest rates will dip as low as they were before the pandemic, Mensah says."There are bits of the market that do assume that rates will trend back to where we were pre-COVID or soon after that," Mensah said. He adds that the terminal rate may actually be 150 basis points above that.Before the pandemic, in the decade following the Great Financial Crisis, interest rates remained at historical lows. However, as inflation soared, the Fed hiked its benchmark interest rate aggressively, initiating its first move to loosen monetary policy last month with a 50 basis point rate cut. Despite the Fed's apparent confidence that pricing pressures have eased, Mensah says a variety of inflationary risks will keep interest rates higher. "I personally have been worried just about the underlying inflationary pressures that are out there for a bunch of reasons, whether its COVID, whether its supply chain moves," he said.He also pointed to inflationary shocks like the <a target="_blank" href="https://www.businessinsider.com/port-strike-could-wreck-us-economy-with-price-increases-scarcity-2024-10">US port strike</a>, which started on Tuesday and is expected to continue for weeks.Mensah says the port workers' wage demands, as well as increasing wages for workers around the world, add further inflationary pressure.Finally, he noted geopolitical risks, which he says have weakened the dollar's value as global markets have priced in new developments."I do think the market is trying to be alert to events that are happening on the horizon," Mensah said, adding there's been a dollar weakening versus the euro and British pound in broad foreign exchange markets."You can make some arguments for that. So I think the market is poised for challenges that are ahead," he said.Other analysts have also pointed to inflation risks from geopolitical conflicts.Last month, T. Rowe Price analyst Tomasz Wieladek said that even though trade openness has encouraged inflation stability, ongoing conflicts could mean globalization is at risk in the coming years. That could <a target="_blank" class="" href="https://www.businessinsider.com/why-central-banks-will-be-fighting-high-inflation-for-years-2024-9">drive up global inflation</a>, he said.

Rates won't fall back to pre-pandemic levels as geopolitical conflict and supply chain issues create problems for world economies, BofA exec says

India remains highly dependent on imports for minerals critical to accelerating its <keyword id="19951336" type="General" weightage="20" keywordseo="energy-transition" source="keywords">energy transition</keyword>, with a full reliance on shipping in lithium, cobalt and nickel, according to a report released Monday. The report, published by the Institute for Energy Economics and Financial Analysis (IEEFA), said that India's demand for <keyword id="19978839" type="General" weightage="20" keywordseo="critical-minerals" source="keywords">critical minerals</keyword> is expected to more than double by 2030, while domestic mining operations may take over a decade to start producing. It stresses that India needs a carefully crafted import strategy to mitigate potential trade risks while balancing international relationships to secure these essential minerals. IEEFA's report examines five critical minerals (and their compounds) - cobalt, copper, graphite, lithium and nickel - from the perspectives of import dependency, trade dynamics, domestic availability, and global price fluctuations. The findings show that India remains largely import-dependent for these minerals and their compounds, with 100 per cent import reliance for minerals like lithium, cobalt, and nickel. "India should strive to de-risk its critical minerals sourcing by identifying new international resources and expediting <keyword id="20681115" type="General" weightage="20" keywordseo="domestic-production" source="keywords">domestic production</keyword>. A concerted effort to partner with and foster bilateral relations with <keyword id="23713985" type="General" weightage="20" keywordseo="mineral-rich-nations" source="keywords">mineral-rich nations</keyword> should be a priority for India," said the report's co-author Charith Konda, Energy Specialist, IEEFA. "The country can also explore investment opportunities in resource-rich, friendly nations, such as Australia and Chile, as well as African countries like Ghana and South Africa," he added. The report said India depends heavily on China for synthetic graphite and natural graphite and it should explore cooperation initiatives with countries like Mozambique, Madagascar, Brazil and Tanzania which are some of the highest graphite producing countries. "As part of the Global South cooperation initiatives, these countries could be favourable partners for India for <keyword id="23713984" type="General" weightage="20" keywordseo="graphite-trading" source="keywords">graphite trading</keyword>," said the report's co-author Kaira Rakheja, Energy Analyst, IEEFA. India is also highly import-dependent for copper cathodes and nickel sulphates from just two countries - Japan and Belgium. The report suggests India could look at the US, the fifth largest producer of copper in the world, to diversify its suppliers and enhance <keyword id="23714709" type="General" weightage="20" keywordseo="supply-security" source="keywords">supply security</keyword>. For minerals like lithium oxide and nickel oxide, the dependency is low on one country, but overall imports largely come from Russia and China, both countries with potential trade risks. "Developing domestic lithium refining capacity will help India integrate with the global lithium supply chain," said Rakheja. The report also notes the significant efforts that the Indian government is making to improve domestic production of critical minerals with the auctions by the Ministry of Mines and the planned Critical Minerals Mission. "The critical minerals mining block auctions can serve as an opportunity for India to focus on building refining and processing capabilities to emerge as a global value-adding hub," said Rakheja. "Government support in the form of viability gap funding and technology development will help promote such auctions and ultimately the domestic production of critical minerals. "A stable supply of critical minerals is imperative for India to achieve its <keyword id="19895602" type="General" weightage="20" keywordseo="renewable-energy" source="keywords">renewable energy</keyword> goals," Konda said. India has committed to achieving 500 gigawatts (GW) of non-fossil fuel-based electricity installed capacity by 2030. Currently, the country's renewable energy installed capacity stands at 201 GW, with solar energy accounting for 91 GW. According to another study, the fast-developing South Asian nation needs to install around 7,000 GW of renewable energy capacity to achieve net-zero emissions by 2070.

Energy transition: India remains highly dependent on imports of critical minerals, says report

Climate Action 15: 2024's top global innovators powering green solutions

<keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s <keyword id="19938893" type="General" weightage="20" keywordseo="defence-exports" source="keywords">defence exports</keyword> have surged from Rs 15 billion in 2017 to Rs 210 billion in 2024, registering a CAGR of 46 per cent, highlighted a report on 'Defence Conference 3.0' by Antique Stock Broking. The report stated that the <keyword id="20861069" type="General" weightage="20" keywordseo="global-shift" source="keywords">global shift</keyword> towards a China+1 strategy and the impact of the <keyword id="20016971" type="General" weightage="20" keywordseo="Russia-Ukraine-war" source="keywords">Russia-Ukraine war</keyword> offer India additional opportunities to fill supply chain gaps, potentially boosting its share in the <keyword id="23046732" type="General" weightage="20" keywordseo="global-defence-industry" source="keywords">global defence industry</keyword>. The report noted that the country's long-term goal is to become a global defence manufacturing hub is driven by Defence Public Sector Undertakings (DPSUs), private enterprises, start-ups, and MSMEs. "Indian defence exports have grown multi-fold from INR 15 bn in 2017 to INR 210 bn in 2024 at a CAGR of 46%. The China + 1 strategy and the Russia-Ukraine war provides an additional opportunity for India to fill the gap created in the supply chain and hence increase its contribution to the global defence industry," the report read. The report added that to achieve this target a well-developed domestic ecosystem is crucial as lower import content in products accelerates approvals by reducing international conflicts. The report added that the Ministry of Defence has taken key initiatives to attract Indian private players and global Original Equipment Manufacturers (OEMs) include establishing aerospace parks and defence corridors, fast-tracking project approvals, and enhancing development and testing facilities. Highlighting the potential in India's Maintenance, Repair, and Overhaul (MRO) segment the report explained that it holds a significant potential for global aerospace companies due to its technical expertise and cost-competitive solutions. "India provides a huge opportunity in the <keyword id="23046733" type="General" weightage="20" keywordseo="MRO-segment" source="keywords">MRO segment</keyword> for global aerospace leaders given the expertise the country provides as well as the cost efficiency solutions compared to its global competitors" the report added. India aims to increase domestic defence turnover to Rs 3 lac crore by 2029, Rs 500 billion targeted for exports. This growth will help reduce the Government of India's import bill as India remains the world's largest importer of defence equipment. Under the Atmanirbhar Bharat initiative of the government, 75 per cent of the defence capital outlay is now reserved for domestic players, up from 49 per cent in FY21. Given the geopolitical challenges and modernisation needs of its Armed Forces, the report added that India plans to invest Rs 8.3 lac crore in domestic procurement, offering substantial business opportunities for local companies. "India intends to place orders worth INR 8.3 trn through domestic procurement and thus it presents a massive business opportunity for local players" it added. As per the Ministry of Defence, India's defence manufacturing sector has witnessed an increase of 16.8 per cent in the fiscal year 2023-24. This significant increase marks the highest-ever growth in the country's defence production value. The total value of defence production reached Rs 1,26,887 crore this year, up from the previous year's figures.

India's defence exports surge to Rs 210 billion after global shift towards China+1, Russia-Ukraine war: Report

<ul class="summary-list"><li>Shein plans to sell its supply-chain technology to other retailers.</li><li>The strategy could help grow its revenue, but experts say the brand's reputation may be an obstacle.</li></ul><a target="_blank" href="https://www.businessinsider.com/inside-shein-path-ipo-climate-fast-fashion-controversies-stock-exchange-2024-5">Shein</a> is looking to sell the supply-chain technology that has been a big part of its success. Industry experts say that while it could boost the online retailer's revenues, getting brands to sign on could be an uphill battle.Shein has developed a unique on-demand manufacturing model that enables it to turn around designs in a matter of weeks, compared with the several months more typical among its fast-fashion competitors.Now, according to an investor letter from Shein's executive chair, Donald Tang, which was first reported by The Wall Street Journal <a target="_blank" href="https://www.wsj.com/business/shein-to-market-its-unique-supply-chain-technology-to-global-brands-32fa0ed8">in March</a>, Shein is looking to sell that technology to other brands and retailers."Supply-chain technology is a top secret for a business like this," said Evelyn Gong, an assistant professor of operations management at Carnegie Mellon University's Tepper School of Business. "People have been curious, and now Shein suddenly is willing to share it with everyone who's willing to pay for this technology, including its competitors."Shein was founded in China in 2012 and moved its headquarters to Singapore in late 2021. It's a private company and thus isn't obligated to disclose its financials, but Coresight Research estimated that it generated nearly $32 billion in revenue in 2023. Shein has grown a lot in a short amount of time, and its ambitions are even larger.It <a target="_blank" href="https://www.businessinsider.com/what-is-shein-billion-dollar-fast-fashion-company-explained-2023-7">confidentially filed for a US initial public offering</a> in November, which is expected to be one of the largest public debuts in years. After facing regulatory struggles and criticism from lawmakers in the US, <a target="_blank" href="https://www.businessinsider.com/shein-ipo-new-york-london-us-scrutiny-listing-2024-2">Shein is said to be exploring moving its IPO</a> to the London Stock Exchange.Shein has also grown beyond its fashion roots, selling products in categories such as home goods, electronics, and office supplies. It has also opened up its site to third-party sellers in a marketplace model similar to Amazon's.But Shein's rise hasn't come without controversies — it has weathered allegations related to its labor practices and <a target="_blank" href="https://www.businessinsider.com/temu-shein-under-increased-pressure-from-us-lawmakers-de-minimis-2024-2">import strategy</a>, among others — that could hamper its efforts to expand to new business lines, experts said.<h2 id="71c04589-0e4b-4cac-91f4-c71ea2486d4c">A 'playground' for small designers and brands</h2>Shein works directly with more than 5,000 suppliers, mainly in China. Its forecasting tools and high volume of customer data allow it to stay on top of the latest trends.By showing it has consistently high demand for its products on social media, it can negotiate lower rates and minimum order quantities with its suppliers, Prince Ghosh, a cofounder and the CEO of the quality-control startup Factored Quality, said. This means it can manufacture only the most popular items and avoid sinking money into inventory that might not sell as well."Fast fashion has been around for a while," Ghosh said. "Shein, and now Temu and many others, really just built this modern version of it that they have owned a lot of themselves."<div type="image" title="A pair of black sunglasses propped on a table with a Shein tag." height="3712" width="5568" msid="110774600" hostid="261" sizebytes="462130"></div>That on-demand model could appeal to small, up-and-coming brands that might want to experiment with designs before they fully scale production. Shein already does this on a smaller scale through its Shein X program, which it launched in 2021. The <a target="_blank" href="https://affiliate.insider.com?h=c7c824610c2b39bedd55d2a22737e85669e9b35d9ab1c297d1b743007976e21d&amp;postID=6658e8e966bb31e50751c374&amp;postSlug=shein-to-sell-supply-chain-technology-experts-debate-challenges-2024-5&amp;site=bi&amp;u=https%3A%2F%2Fus.shein.com%2Fcampaign%2Fsheinx-story">incubator program</a> involves Shein manufacturing, marketing, and selling designs created by individual designers.Making the tech available more widely could help partner brands gain valuable insight into inventory levels and forecast demand. Brands that aim to keep their prices low while keeping up with seasonal trends could also benefit. It's often very expensive for brands to develop prototypes themselves, especially in the US, so using Shein's supplier network could be more cost-effective."It would be a pretty good playground for individual designers and small brands or startups that are just starting out and don't have the resources to set up an independent supply chain themselves," Gong said.Shein has also made use of <a target="_blank" href="https://www.businessinsider.com/shein-temu-de-minimis-tax-loophole-scrutiny-2024-1">de minimis, a provision in US import law</a> that allows shipments of less than $800 to enter the country duty-free and with minimal inspection. It consolidates orders in fulfillment centers in China and then ships them by air to the US in individual parcels. By doing so, it can avoid paying duties that more traditional retailers would have to pay when importing their products wholesale. Brands partnering with Shein could benefit from this practice as well."That's how they're able to keep that low cost," Ghosh said.A Shein spokesperson said the company's success did not depend on the de minimis provision."Our business model, focused on creating an on-demand production approach that measures and responds to customers' needs and preferences, is what drives our growth," the representative said.Still, calls to overhaul de minimis have grown louder in recent months. US lawmakers and advocacy groups argue that the loophole hurts American textile businesses and allows for illicit goods to enter the country. Shein has also said it <a target="_blank" href="https://www.sheingroup.com/pdfs/aafa-letter/">supports changes to de minimis</a> as long as they're fair.<h2 id="76aa076e-ab0d-416e-859c-0bf34ace2d9c">Brands might have some hesitations</h2>Shein wouldn't be the first retailer to diversify its revenue streams by selling its technology.Walmart <a target="_blank" href="https://www.businessinsider.com/walmart-commerce-technologies-trademark-filing-job-posting-amazon-2022-2">launched Walmart Commerce Technologies</a> in 2021 to sell services such as its artificial-intelligence-powered <a target="_blank" href="https://www.businesswire.com/news/home/20240314754136/en/Walmart-Commerce-Technologies-Launches-AI-Powered-Logistics-Product">route-optimization</a> tech and its in-store fulfillment capabilities. The German e-commerce giant Zalando <a target="_blank" href="https://corporate.zalando.com/en/brands-retailers/platform-services/zalando-logistics-solutions/zalando-logistics-solutions-glance">similarly sells logistics services</a> to partner retailers.But Shein has reputational concerns to contend with. For one, it has drawn criticism and scrutiny following <a target="_blank" href="https://www.businessinsider.com/shein-factory-workers-18-hour-shifts-paid-low-wages-report-2022-10">reports</a> that laborers in its partner factories worked excessive hours in poor conditions. Lawmakers <a target="_blank" href="https://www.rubio.senate.gov/rubio-investigate-shein-and-temu-for-slave-labor/">have called</a> for the Department of Homeland Security to investigate whether goods sold on Shein and Temu and exported to the US were made using forced labor, which would violate the US's Uyghur Forced Labor Prevention Act.The Shein spokesperson said the company had a "zero-tolerance policy for forced labor" and required its "contract manufacturers to only source cotton from approved regions."<div type="image" title="A worker makes clothes at a garment factory that supplies SHEIN." height="3710" width="5565" msid="110774598" hostid="261" sizebytes="685120"></div>"We take visibility across our entire supply chain seriously, and we are committed to respecting human rights," the spokesperson said.Shein has also <a target="_blank" href="https://www.businessinsider.com/shein-accused-using-shell-companies-to-steal-designs-new-lawsuit-2023-7">faced multiple lawsuits</a> alleging it <a target="_blank" href="https://www.fashiondive.com/news/shein-copyright-complaint/696575/">stole designs</a> from other companies. If brands work with their network of suppliers, experts said, it could mean sharing their detailed design information, which some see as a risk. It's not clear whether Shein would get access to its partners' customer data or whether it could use that data to inform its own product decisions."We are continually investing in our review process and are committed to driving industry-wide advancement," the spokesperson said. "Shein suppliers and third-party sellers are required to comply with company policy and certify their products do not infringe third-party IP."Working with established brands could help Shein improve its image as it prepares to debut on the public markets. CNBC reported that <a target="_blank" href="https://www.cnbc.com/2024/05/13/nrf-rejects-shein-membership-as-retailer-pursues-us-ipo.html">Shein had also applied</a> to join the National Retail Federation, the largest retail trade organization in the US, but had been denied multiple times.But if it's successful in selling its tech to brands it hasn't worked with before, Shein could expand its reach, Anand Kumar, an associate director of retail research at Coresight Research, said."Currently, Shein just sells the very low-cost products, but including various brands in its platform, it can sell products at various price ranges," he said. "It'll help to position it to compete with more global retailers."

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