Attacks in the Red Sea are disrupting Global Trade. Here's how it could affect what you buy.
Car factories have stopped production in Belgium and Germany, spring fashion lines are delayed all over Britain, and a Maryland company that makes hospital supplies doesn't know when they are going to get parts from Asia. Attacks in the Red Sea are delivering an unexpected shock to global trade, along with pandemic related port jams and Ukraine's Invasion of Russia. The attacks are coming from Houthi Rebels in Yemen that are seeking to stop Israel's offensive against Hamas in Gaza. They attack cargo ships by forcing them away from the Suez Canal and causing them to have to go around the tip of Africa.
Ryan Petersen, CEO of global supply chain managment company Flexport, described what is happening right now in the Red Sea as short-term chaos that will lead to increased costs. This problem will continue to grow the longer the war in Gaza drags on. Petersen explained that the disruption in the Red Sea lasting a full year could inflate prices of goods by 2%. This will lead to even higher interest rates and weaken the economy.
1 comment:
This could continue to explain the large price rises that we see today. While I know a lot of them stemmed from the pandemic you would think the prices now would be a little more controlled. I know the full impact of this issue hasn't completely hit yet since this issue is very recent but it worries me as to how much more the economy will be affected by this.
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