Crypto News: Supply Lines: Debating regloblization

Day one of the Bloomberg New Economy Gateway Europe brought together a range of corporate and government leaders to debate the future of supply chains, trade and globalization.

Kurt Sievers, president and chief executive officer at NXP Semiconductors, signaled his support for export restrictions. But he also stressed that chipmakers need to know what policymakers are planning that could impact their supply chains.

"There doesn't seem to be a clear road map on what to expect going forward," Sievers said in an interview at the event near Dublin. He added that he believes there's a 100% compliance rate among semiconductor companies, but that they can't control shadow markets.

The New Economy Gateway series invites leaders from the private and public sectors to discuss, analyze and propose solutions to the economy's most pressing problems.

The two-day event this week focuses on "reglobalization" — exploring the forces transforming trade and industry, from banking to aviation and energy to semiconductors. (Watch highlights from Wednesday here and click here for the agenda.)

Among the key takeaways: how Brexit has been a setback for the UK economy and is turning into a case study of how things can sour when major nations opt against cross-border collaboration.

EU's Stance

During one panel discussion, a top European Commission trade official said the European Union is committed to open markets and globalized supply chains despite a "harsher and more adverse" geopolitical environment.

Denis Redonnet, the EU executive's chief trade enforcement officer, said the bloc would be sticking to its "open market strategy" amid concern that the US Inflation Reduction Act, tensions between the West and China, and the war between Russia and Ukraine will lead to greater protectionism.

"What we need to do is make sure that we focus on resilience in a measured way where we look at where we have real vulnerabilities," Redonnet said.

Here are some other highlights:

Ryanair CEO Michael O'Leary said Brexit has been "unbelievably messy" for companies, and has led to the UK labor market being "broken." He also says he's expecting to see double-digit price increases for airfares this year.
Relations with China will continue to be an important feature of how the global economy develops in spite of pressure from the US to decouple from Beijing, said Paschal Donohoe, president of the Eurogroup, which brings together euro-area finance ministers.
Strong demand for air travel is expected to continue through the summer, IATA Director General Willie Walsh says. Ticket prices are likely to remain high, driven by higher costs — especially for jet fuel, which remains expensive, Walsh said in an interview. Capacity remains below where it was in 2019, partly due to aircraft delivery delays and a shortage of spare parts, he added.

—Brendan Murray in London

Price cuts | Tesla has slashed the starting price of its top-selling vehicle by almost a third in just over three months, making discounts that had already divided analysts all the more unprecedented. At $46,990, the cheapest available Model Y sport utility vehicle costs 29% less than it did in mid-January. Tesla's other high-volume car, the Model 3 sedan, can now be had for less than $40,000 for the first time in years. The move marks Tesla's second price cut in the US this month after several quarters of deliveries fell short of some analysts' expectations. The company is in the rare position among EV makers of having profit margins to work with, as incumbents including Ford and newer entrants like Rivian and Lucid Group struggle to make money at lower volumes.

Cheaper imports | Japan's trade deficit narrowed for the second month in March, as the price of fuel eased and brought down import costs. Imports grew 7.3% from a year ago, the smallest gain in two years, and exports were up 4.3% from a year earlier, led by car shipments.
Paying a penalty | Seagate Technology, the biggest maker of computer hard drives, will pay a $300 million civil penalty to the US Commerce Department to resolve alleged violations of export controls in selling millions of units to Huawei.
More trucks | Volvo Group raised its forecasts for registrations as the world's second biggest truckmaker saw orders increase 32%. Volvo last week reported preliminary first-quarter results that prompted its shares to surge.
Chips decisions | Italian officials hinted in private talks with Taiwan that they may be willing to pull out of a controversial pact with China as they sought to secure help with semiconductors, according to people familiar with the issue.
Funding an expansion | Eren Holding, a Turkish conglomerate with interests in luxury clothing and manufacturing, is on a $2 billion investment spree to boost its cement and cardboard production capacity.
Tariff concerns | Momentum is building in Congress over an effort to re-instate debilitating solar tariffs on US imports of panels from Southeast Asia, raising alarm from renewable developers.
Chemical worry | A growing number of US state bans are forcing clothing companies to find less toxic alternatives to per- or polyfluorinated substances — called PFAS for short — when making shirts, hats and rain jackets that are water- and stain-resistant. But there's a loophole for the continued sale and circulation of existing PFAS-made products in secondhand markets.

Too early | The Drewry Hong Kong-Los Angeles container-rate benchmark rose 11% in the week ended April 19 to $1,496 per 40-foot container, marking a 33% rebound since hitting a low on April 4. Still, it may be premature to call the bottom, Bloomberg Intelligence says.
Rule clarification | Lam Research, one of the largest makers of machines used to manufacture semiconductors, said it can ship more products to China than previously expected after the company received clarifications on US trade restrictions.
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

Don't keep it to yourself. Colleagues and friends can sign up here. We also publish the New Economy Daily, a briefing on the latest in global economics.

For even more: Follow @economics on Twitter and subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and gain expert analysis from exclusive subscriber-only newsletters.

How are we doing? We want to hear what you think about this newsletter. Let our trade tsar know.

Like getting this newsletter? Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and subscriber-only insights.

Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.

Want to sponsor this newsletter? Get in touch here.