Crypto News: Supply Lines: Rewiring globalization

American astronomer Carl Sagan once said "you have to know the past to understand the present."

It's good advice for anyone looking to make sense of a world still reeling from a pandemic, Brexit, Russia's war with Ukraine and a trade war between the world's two largest economies.

This tumultuous period has encouraged C-suites and governments around the world to rethink the economic strategies that have driven the past three decades of globalization.

To understand the forward trajectory of globalization, Bloomberg dove into some data from the past three years to see what trends have emerged since the pandemic first roiled global markets. (Click here for the full story.)

In a nutshell, here's what we found:

The US is regularly importing more goods from Europe than from China
China is exporting a greater share of its goods to non-US markets
Brexit is increasing costs and reducing market access for UK exporters
China uses its economic might achieve strategic goals
Germany was slow to cut off imports from Russia after Vladimir Putin invaded Ukraine

Broadly, the data show that the world's largest trading powers are rewiring their traditional relationships.

That's led to a new focus on strengthening the reliability of supply chains, shifting from "just in time" to "just in case" trade strategies and reducing dependence on authoritarian regimes like China.

Some of these shifts are marginal, and temporary, while others represent the beginnings of longer-term structural realignments.

Here are a few conclusions we can draw about the future:

The US and China aren't engaged in a wholesale decoupling of their economies, but both nations are hedging their bets and deepening their trade flows with other nations
A strong, mutually beneficial US-EU trade relationship is more valuable and important at a time when both regions are reducing their dependence on China
The shift towards market concentration among regional economic hubs will take on increased importance in the coming years — particularly so in the Asia-Pacific region
The UK must find ways to mitigate the harmful effects of Brexit as EU producers rely less and less on UK exports to feed, clothe and service European citizens
Russia's economic influence is approaching a generational nadir and it's likely to remain a pariah state for many years to come

What's happening is a kind of "reglobalization" where governments and multinational companies adapt their trade links to accommodate the new economic and geopolitical challenges. And while supply chains may be more insulated against shocks, the next chapter also has the potential to increase costs and make the world a less productive place.

—Bryce Baschuk in Geneva

Jersey Buoys | The Port of New York and New Jersey, now the busiest in the US, attributes more than 85% of its growth this year to the cargo it snagged from West Coast rivals contending with labor talks, and said that its top priority is to keep that business in the east. "Our focus now is on retaining that cargo that has shifted here," Beth Rooney, director of the Port of New York and New Jersey, said in an interview last week. Read the full story here, and another here about how LA port chief Gene Seroka wants to regain the lost business. Read more here.)

Striking truckers | South Korean President Yoon Suk Yeol asked his cabinet to be ready to issue an "imminent" return-to-work order on striking truck drivers in the oil and steel industries. Read more here about how worker discontent is breaking out across South Korea. A major union joined the protest.
Bulging inventories | A lackluster Black Friday in the UK added to an already muted Christmas season, leaving British retailers with a problem: too much stock. Separately, Britain's National Union of Rail, Maritime and Transport Workers rejected an offer aimed at ending a strike action planned before Christmas..
Needing a charge | Tesla plans to lower production at its Shanghai factory, according to people familiar with the matter, in the latest sign demand in China isn't living up to expectations. Meanwhile, two of China's biggest automakers have bought their own ships to avoid supply-chain delays.
Full warehouses | Dollar General cut its profit outlook on higher supply-chain costs and a shift in customer demand to less-profitable consumable products, adding that it faces "unanticipated delays in acquiring additional temporary warehouse space sufficient for its inventory needs."
Union opposition | Joe Biden signed legislation imposing a deal he negotiated between freight railroads and organized labor, averting a possible strike but risking a divide with rank-and-file union workers who opposed the settlement.
Coal shipments | South Africa's state-owned port and rail company Transnet SOC proposed switching to diesel trains to avoid disruptions to coal exports caused by the theft of power cables that disable electric locomotives.
Sun block | The world's largest solar company said that the US Commerce Department's initial findings on Chinese companies circumventing tariffs will not affect the company's operations nor will it change its plans for the American market.
Intelligence podcast | In this week's edition of the Bloomberg podcast, Bloomberg Intelligence analyst Lee Klaskow discusses how North American railroads' ability to exceed earnings consensus will be driven by volume growth.

Busy season | The Chinese port of Qingdao is seeing container ship traffic increase to the highest level in at least a year. There were 78 cargo ships outside the country's northeastern port on Dec. 2, almost doubling the year-to-date's median count of 40, according to shipping data compiled by Bloomberg.
Falling rates | Spot rates for containers departing Shanghai are likely to continue weakening as China's production slump deepens, evident in the seven-month low manufacturing PMI reading in November, according to Bloomberg Intelligence.
Use the AHOY function to track global commodities trade flows.
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