Global trade had a solid entry coming into 2024, and it has shown signs of increasing strength. However, it faces so challenges with political risks all over the world. Bloomberg's trade tracker has finally shown marked improvement in January led by the U.S., which is due to a surge in Los Angeles. Which is the busiest container port in North America. Improving indicators have been adding optimism that the global economy has put the worst of it behind us. Trade in South Korea and Taiwan has been able to sustain export gains as energy demand is up. Especially with the expected drop in interest rates allowing firms and factories to bring down working capital costs.
However, politics may interrupt this growth in the global economy. The recent attacks in the Red Sea have shown us how vulnerable supply chains can be. There is also an upcoming vote on Taiwan could lead to another potential conflict that could upend the global economy. If TSMC has trouble getting out their microchips to the market it would create a major shortage for tech companies and they supply chips to most of the top tech companies. It is also an election year in the U.S., Mexico, India, and Indonesia which could lead to new policies that could disrupt economies as well. We will have to see how it all plays out in the coming months.
https://www.bloomberg.com/graphics/global-trade-indicators/?srnd=economics-v2
8 comments:
it's fascinating how the global trade is so reliant upon external factors within the world. Also how the military and political aspects have such a large pull on the global trade landscape. I will be very interested to see how the election years in these key countries involved will affect and disrupt the economies.
It still amazes me how just one country can affect the entire global economic state. Microchips are extremely important and are needed in each and every country. It seems that every week there is a new issue resulting in economic uncertainty.
Global trade has always been very interesting, especially the factors that contribute to overall trade. With election year upon us, as well with constant border and trade restrictions I am interested to see how global trade and economy continues to grow or decline, and how economies respond.
It's very interesting to see just how much the US affects global trade. With the upcoming elections and other political uncertainties, it will be intriguing to see how everything is handled; as that will be crucial to sustaining this trade.
Situations like the Red Sea right now and the Suez Canal not long ago have really proven how reliant we are on certain links within our supply chains. It'll be interesting to see how governments around the world attempt to combat this, and I think even more interesting to see how they react in terms of the microchip topic. I know that the U.S. is working to battle against this reliance on Taiwan, but it'll be interesting to see where we're at when things develop more.
Hopefully, regardless of the result of the Taiwanese election, TSMC will continue to produce and export its precious microchips. The post-COVID microchip supply shortage and the production issues caused around the world would only be a small example of intentional changes to the microchip trade, and/or country embargos that might come with shifting perspectives that new regimes bring.
In the context of the upcoming vote on Taiwan, what specific risks could arise for global trade, especially considering the significant role of TSMC in the tech industry's supply chain?
Elections in a country like the United States, which is one of the most influential in the world, can definitely cause some policy shifts, generating more uncertainty towards the economy. These potential new policies that could be introduced by elected governments may have implications for trade agreements, taxation, and regulatory frameworks, which can have a certain impact in influencing investors confidence and business decisions.
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