According to the WSJ, the Trump administration’s decision to continue trade negotiations with allies averted new tariffs, but at the same time threatens to slow corporate spending and drive up costs. Even as the U.S. economy has shown renewed signs of life in recent weeks, with the dollar rallying and yields on the 10-year Treasury note crossing above 3% for the first time since 2014, some worry that the ambiguity surrounding trade talks is leading companies most affected by the tariffs to delay hiring or spending plans until they have a clearer sense of what the administration will do.
In a survey released Tuesday by the Institute for Supply Management, an executive at a manufacturing firm said that the tariff considerations, “are very concerning. Business planning is at a standstill until they are resolved.”
Did you know?
A cease and desist letter was sent to Tesla before the unveiling of the Semi, asking the Elon Musk-led company to hold off on the vehicle’s announcement until its patent issues with Nikola were resolved. Tesla ignored the request.
“Some of our drivers already use Dock 411. That’s actually another tool that we tell our drivers to keep reporting on and making it an even better tool. I haven’t seen anything else quite like it. It also helps with safety hazards, and that’s one of my favorite parts of the feature.”
–Shelby Padgett, operations analytics manager at Maverick Transportation
In other news:
A tight labor market is making companies complain about delays and higher costs for trains and trucks. (WSJ)
Amazon.com Inc. said it’s hiring 2,000 people in Boston, expanding an existing technology hub that focuses on everything from machine learning and speech science to cloud computing and robotics. (SupplyChain247)
Alibaba and four Australian and New Zealand companies introduced a food-tracing system based on blockchain technology on Friday. (Maritime Executive)
The 35,000 sq m temperature-controlled warehouse, with a 3,500 sq m mezzanine area for value-added services, is the largest investment in the history of DB Schenker Middle East & Africa. (Air Cargo News)
The House of Representatives approved an amendment to the recently passed Federal Aviation Administration (FAA) re-authorization bill that establishes national standards for shippers and intermediaries to follow when hiring truckers to move freight. (DC Velocity)
This marks the second straight sizeable decline in the headline manufacturing index, which is consistent with the general theme that things are beginning to normalize after some really gaudy numbers at the end of 2017 and early part of 2018.
Everything on the demand side seems to be fine for the manufacturing sector. Individual survey responses almost universally mention healthy to outstanding demand conditions across industries. Capacity numbers that the Federal Reserve produces show that factory utilization has picked up in recent months, but not the point that would suggest that manufacturing plants are maxed out in the economy.
The challenges now almost all appear to be coming from the supply side, and would suggest that manufacturers are being increasingly bothered by the scarcity of transportation and rising freight costs. This theme has been around anecdotally since hurricane season in 2017 brought some of these issues to the forefront, but it appears now to manifesting itself in some of the economic data.
Hammer down everyone!
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