Today's Pickup: U.S. trade tariffs on Chinese products to commence on July 6

 (Photo: Pexels)

(Photo: Pexels)

Good day,

After months of altercations between the U.S. and China on trade tariffs, the D day is nearly upon us as the 25% tariffs on 1,102 Chinese products would officially commence by July 6. Global supply chains have been bracing for impact, as this would usher a new age of how business is done between the two powerhouse economies. 

Certain U.S. companies have already switched over to South Asian countries like Vietnam for raw material supply, as it can circumvent the 25% tariff and also provide cheap labor. The Vietnamese government is seeing this as an opportunity and is opening up to foreign investment, while planning to make the processes transparent and easy for businesses to set shop. 

While some companies could work afford to make the switch, not all can as Chinese production capabilities cannot be matched by any of its neighbors as yet. The retaliatory measures from China would soon follow, which might end up making it a sour affair, but some economists do argue that the impact of tariffs would be negligible over the long-run. 
 

Did you know?

According to SAFE, autonomous vehicles (AVs) will add between $3 trillion to $6 trillion in cumulative consumer and societal benefits to the U.S. economy by 2050. Annually, $800 billion in economic and societal benefits could be realized when AVs are fully deployed.

Quotable:

"We’re seeing full utilization, and project continuing to for the remainder of the year with only possible modest softening toward the end of the year, but not because of lower demand but because of increased infrastructural capacity."

- Avery Vise, VP of Trucking Research on the spot market

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Final Thoughts:

India and China are sitting down today to discuss about the feasibility of creating an oil buyers’ club, to help seek better bargains from OPEC. The Asian powers accounted for nearly 17% of the world’s oil consumption last year, and are looking to leverage their position in rein in the climbing oil prices. Analysts believe that this meeting could have a bearing on the OPEC meeting that is taking place later this month. 

The Indian government has been particularly hit with the rising oil prices, as its currency - the Indian rupee - fell spectacularly against the U.S. dollar, sinking by over 7% since January 2018. India’s dependence on oil import has meant that the government would do everything in its power to bring down the prices. Sources from inside the government have mentioned that the boom in U.S. shale oil production could act as a bargaining chip against OPEC which now ceases to be a monopoly in oil export. 

If the meeting goes as per plan and a oil buyers’ cartel is indeed created, it could prove to be a major resistance to the freely climbing oil price - helping everyone at large and the freight industry in particular.  

Hammer down everyone!

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Vishnu Rajamanickam, staff writer

Vishnu is an engineer by education, with a couple of years experience in the construction industry. But he has long since moved on to work in different domains as an entrepreneur, copywriter and most importantly, as a journalist. He has also consulted for various travel, technology, and fashion brands as a content strategist and has considerable experience with covering tech startups, having interviewed dozens of CxOs over the course of his career as a technology journalist.