Weekly Thread for January 20, 2025
According to the Peterson Institute on X @PIIE, if Trump imposes 25% tariffs on Canada and Mexico you can see below where the largest impacted categories would likely be, including transportation equipment and machinery, as well as electronics, other manufacturing segments. Also included this week is country-of-origin components for drone supply chains and historical US tariff import data and more.
Average tariff rate on US goods imports for consumption vs proposed rate.
Meanwhile, China's exports noted in Asia Times' newsletter Global Risk/Reward Monitor this week, indicates China's overseas trade boom is transforming global supply chains in the Global South, per David P. Goldman, Spengler columnist for Asia Times and PJ Media on X @davidpgoldman.
According to US Bureau of Labor Statistics, manufacturing's share of the overall labor force now sits near a historical low of 8.1%.
Data center hyperscaler compute value chain includes facility development, infrastructure development, hardware development, software development, data management, energy and operations management. Image courtesy Meltem Demirors on X
@Melt_Dem. Some world-leading hyperscalers include Google, Meta, Microsoft, Oracle...
Almost 50% of the world's data centers are located in the US.
This June 18, 2024 chart from Gavekal Research on X with Macrobond indicating Indian manufacturing has failed to take off despite many policy measures, as Indian manufacturing stagnated below 15%, "behind most other Asian countries at similar income levels."
The semiconductor value chain from financial research firm and investment platform Quartr.
The AI semiconductor value chain from Eric Flaningam, author of Generative Value, on X @EricFlaningam.
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About
What matters when formulating contract electronic strategy? How do you identify supplier profit centers and what are you doing to protect against margin erosion for your outsourcing programs? Why do provider capabilities often not match capabilities they claim? How are you benchmarking your supply chain against competitors?
I’ve spent 25+ years in contract electronics industry setting up contract electronic divisions and running operations, protecting EMS program profits, manufacturing capacity M&A and more. I run a technology solutions firm. A lot of times this means asking the right questions.
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New metro and light rail services that opened in 2024 for top 15 nations. China light rail infrastructure development leads by a significant margin.
France and Sweden retirement age among the lowest in Europe with a minimum age of 62 years to begin claiming full benefits.
Nation wealth for Germany is on decline. According to the chart provided by Holger Zschaepitz on X @Schuldensuehner, "Germany is the only major industrialized country where GDP per capita remains below its 2019 level in 2025. In contrast, Americans are now 11% wealthier on avg, Italians 8%, Spaniards 5%, and the French 3%."
Also from Zschaepitz, "[German] company insolvencies surged by 16.8% in 2024, reflecting the toll of a contracting economy. For the first time since 2017, the total number of insolvencies exceeded 20,000." Germany saw 4,215 corporate insolvencies during the 4th quarter, the most since the Global Financial Crisis.
Accompanying the chart below Zschaepitz writes "[Germany] has fallen to last place for economic growth in IMF ranking. The IMF has cut its 2025 GDP forecast for Germany by 0.5ppts, down to just 0.3%. Among the world’s 30 leading economies, none is expected to grow more slowly than Germany, according to the IMF."
The chart below is from a survey of German manufacturers and lack of orders, by category. You can view this chart and other data concerning the state of the German economy and what these changes mean for Germany's economic and manufacturing forecasts (and greater impact to European manufacturers and EU supply chains) in this article on markzetter.com here.
Geopolitical strategist Velina Tchakarova reports on X @vtchakarova that Mercedes CEO Ola Källenius urges Brussels to drop protectionist approach in form of punitive tariffs on China EVs, according to Financial Times.
Also from Tchakarova.
Drone technology and components and country of manufacture from a US Department of Defense report I will write more on later. As you can see, the vast majority of drone components and manufacturing production is from China.
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