Crypto News: Supply Lines: EU’s unfinished work

Brussels is becoming a ghost town as European Union officials prepare to spend much of August recovering from a turbulent political and economic period that promises to resume after the summer break.

There's a mounting list of challenges for the final months of European Commission chief Ursula von der Leyen's self-titled "geopolitical" tenure as the EU jockeys between the two global hegemons.

The bloc continues to sharpen its economic strategy for China, with updated tools and clearer goals. At the same time, the 27-nation EU needs to solve the remaining trade irritants with the US before elections on both sides of the Atlantic in 2024.

The arrival of President Joe Biden to the White House paused the ongoing tariff disputes triggered by his predecessor. But an October deadline to find a permanent fix for the steel-and-aluminum battle is looming with no solution in sight. Talks are plodding along amid regular meetings between Commission Vice President Valdis Dombrovskis and US Trade Representative Katherine Tai.

Steel Deal

Both sides continue to disagree over key details of a new global steel and aluminum arrangement that would dispel for good the risk of a tariff war between the two. The US is insisting on a mechanism that would better address the risk of overcapacity. The EU is focusing on a WTO compatible solution inspired by its new carbon tariff linked to its emissions market.

QuickTake: How the World Fell Into a Subsidy Race for Climate Goals

Biden's landmark green stimulus also triggered a global subsidies race and a long list of complaints in the EU side. Although both sides are slowly progressing to allow for European manufacturers to benefit from some of the tax credits for battery components, concerns remain on issues like local assembly requirements to qualify for electrical vehicles subsidies or "Buy America" provisions in infrastructure projects.

The renewed era of transatlantic engagement would need to secure results before the possibility of a return of Donald Trump could bring back an era of confrontation politics and derail the two allies' progressive alignment in addressing China's assertive rise — a common challenge for the west the coming years.

Related Reading:

—Jorge Valero in Brussels

Falling Water | The Rhine River has been a reliable shipping lane for centuries, helping spawn industrial giants along its banks. But those days are coming to an end, and the scramble is made all the more urgent as Germany's government fails to keep pace. With water regularly receding to levels that impede shipping from late summer through the fall, companies up and down Europe's most important trade route are rushing to adapt, underscoring how the climate crisis is hitting even advanced industrial economies. (Read today's full story here.)

China's manufacturing activity contracted for a fourth month, showing the economy's recovery remains under pressure, while the government tries to spur consumption. Meanwhile, Citadel Securities hired BlackRock's former China head Tony Tang to drive the company's expansion in the country.
A tool used by exporters in China to get their hands on the yuan temporarily has hit a record, a sign they may be reluctant to permanently transfer their dollar holdings into the local currency.
The world's biggest shipping companies are plowing their pandemic windfalls into orders for new vessels on an unprecedented scale. Separately, CMA CGM sketched out a somber outlook for the shipping industry.
Vietnam's exports fell for a fifth consecutive month in July in their longest slump in 14 years, putting the trade-reliant economy at risk of missing its growth target. Meanwhile, Hong Kong's post-pandemic economic boom is already running out of steam.
Canada's federal government is poised to intervene in a labor dispute to ensure that the country's busiest port remains open after dockworkers rejected a mediated agreement for the second time this month.
Dutch authorities towed a ship carrying thousands of automobiles to a new location, days after it started burning off the coast of the Netherlands.
Panama's government said it can help the US diversify and secure its semiconductor supply chain as geopolitical tensions increase the risk of global chip shortages.

Five years after then-President Donald Trump fired the opening salvo in the US-China trade war, three and a half years after Covid-19 appeared in a Wuhan wet market, and 18 months after President Vladimir Putin's army marched on Kyiv, global flows of trade and investment are shifting, according to a new analysis from Bloomberg Economics.
Japan wants India to improve its business environment even as Prime Minister Narendra Modi's government claims that the ease of doing business in the South Asian country has got better under its watch.
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.