Our weekly newsletter gives a brief overview of the latest developments in geopolitics, security and defense, energy, manufacturing, and supply lines. Striving to provide our clients with enhanced decision-making capability, it includes in-depth articles as well as insights pertaining to growth projections, conflicts, and raw materials, etcetera.
Latest
- On March 4, US tariffs on Canada, Mexico, and China went into effect. Donald Trump has followed through on his promise to impose 25% levies on Canada and Mexico, while increasing existing levies on Chinese goods by 10%. The move has prompted retaliatory action, as promised, by all the countries concerned and sent global markets into shock.
- American military aid to Ukraine was suspended early on March 4. Planned shipments of key military hardware were halted in the escalating spat between Donald Trump and Ukrainian President Zelensky after their fiery meeting in the Oval Office on February 28. Zelensky has since made conciliatory efforts, saying Ukraine stands ready to sign a mineral accord with the US.
- On March 2, Israel once again imposed a total blockade on Gaza seeking the release of the remaining hostages without Israeli troop withdrawal. The plan is reportedly put forward by US special envoy Steve Witkoff and essentially blows up an existing framework for the second phase of the ceasefire agreement and imposes an ultimatum on Hamas.
Security & Defense
- On February 27, the long-imprisoned founder of the armed PKK (Kurdistan Workers Party), Abdullah ?calan called for the group to dissolve and lay its weapons down. The bloody insurgency waged by the Kurdish group against the Turkish state has been active since 1984. President Erdogan is constitutionally barred from running for office again except in the event of an early election, something that requires the support of the pro-Kurdish party to make happen.
- Israel is lobbying the US to keep Syria deliberately weak and fractured according to reports on February 28. The new government of Syria that toppled Assad in December of last year is closely tied to Ankara and has enjoyed their support for years. Israel and Turkey have had difficult relations due to the former’s actions in Gaza and the West Bank. The Israeli government sees a continued Russian presence in Syria as effectively counterbalancing Turkey’s influence.
- Iranian Vice President and prominent reformist, Javad Zarif, resigned from his post on March 3. The latter implied the move was a result of Supreme Leader Ayatollah Khamenei’s pressure. Zarif played a crucial role in the defunct Iran nuclear deal signed in 2015. Another reformist minister, Abdolnaser Hemmati, was dismissed from his post by a parliamentary vote on March 2. With Trump reinstating a “maximum pressure” sanctions policy and the conservative hardliners establishing their dominance in Iran, US-Iran relations seem headed for the worst as both sides retreat into recalcitrant positions.
Energy
- On March 3, Brussels announced the EU will maintain the existing relaxed state subsidy regulations for clean energy sectors into 2030. Normally, the EU commission strictly regulates state subsidies to avoid intra-union subsidy wars and more powerful economies strengthening domestic industries at the expense of smaller ones. At the same time, the subsidies are seen as promoting the EU bloc’s commitment to green energy and strengthening its declining industrial power but are likely to create some division between member states.
- The Chinese Ministry of Natural Resources announced, on March 3, that the state-owned oil refining company, Sinopec had discovered proven shale oil reserves of 180 million tons in Eastern China. The find comes as China has been heavily investing in domestic prospecting for sources of crude oil and ramping up domestic production to meet its awe-inspiring consumption. National data shows shale oil output grew 30% from 2023 to 2024, illustrating this trend.
- On February 27, the Trump administration cancelled US oil giant Chevron’s special license to run limited operations in Venezuela. For the heavily sanctioned country this limited ability to export some of its vast oil reserves to the US served as a lifeline for the Maduro government’s limited revenue streams. Donald Trump alleges that Maduro has failed to repatriate “violent criminals” from the US at a sufficient pace. The Venezuelan government warned this may lead to increased migration to the US.
Manufacturing
- German auto manufacturer BMW has paused a planned ￡600 million investment in EV manufacturing at its Oxford plant in the UK. The plant, slated to open in 2026, continues construction but BMW is reportedly reconsidering the scale and timeline of its investment in UK production of EVs. The uncertainty illustrates a multitude of concerns from a softened EV demand among consumers in Europe to US tariffs, and supply chain challenges with battery sourcing.
- Taiwanese chip maker TSMC (Taiwan Semiconductor Manufacturing Co) announced plans on March 3 to invest $100 billion in chip manufacturing capabilities in the US. The announcement was made in the White House, with President Trump, underscoring the political and strategic dimensions of the move. Taipei appears to be seeking even deeper ties to the US, fearing Chinese efforts in the near future to reintegrate it with the mainland and it is firmly signaling its Western allegiance in order to safeguard its security guarantees.
- Chinese EV manufacturer BYD raised over $5.6 billion through a share sale in Hong Kong on March 4. The company made use of the market in Hong Kong to raise cash as existing renminbi reserves in mainland China are costly to transfer. The company is focused on continuing its overseas expansion into markets such as Brazil, Hungary, and Turkey. Other Chinese mega-companies like CATL have also filed for Hong Kong listings recently and may be seeking to raise cash for foreign expansion in the same way.
Supply Lines
- Maersk and Alibaba announced, on February 28, that they would be collaborating to offer small businesses Maersk shipping directly on the massive e-commerce platform. The move is designed to cut costs and administrative hurdles, enabling single-click orders with transparent tracking all in one place. The move contributes to simplifying supply chains and procurement for small businesses, which represent the majority of buyers on Alibaba.
- On March 3, Kellogg UK moved to make its production facility in Manchester the first in the country to use hydrogen as a direct fuel source in manufacturing. The switch comes at a time when hydrogen is losing favor as an alternative fuel source in certain industries like aviation and wider climate goals are being walked back by large companies. The move could inspire other industry leaders to follow suit if assessed as successful, pushing hydrogen forward to reach net-zero emissions supply chains.
- US tech giant Meta is proposing laying the world’s longest submarine cable in its Waterworth project. The company wants to enter competition with fellow tech titans Google, Microsoft, and Amazon who together represent three quarters of global submarine cable capacity. The Waterworth project’s proposed lines are also reflective of relevant geopolitical considerations, zigzagging between the US, Australia, Brazil, and South Africa whilst centering itself on India. This reflects India’s rising economic and technological profile while avoiding contested areas like the South China, Baltic and Red Seas.
Additional
- On March 4, European Commission President Ursula von der Leyen announced ReArm Europe, a massive defense spending plan for the whole union designed to drastically improve military strength. The plan mobilizes €150 billion in loans to member states for defense spending along with lifting deficit caps to allow members to increase military expenditures without triggering the Excessive Deficit Procedure. In sum, the plan could mobilize €800 billion if member states increase defense spending by 1.5% each. The scope of the package reflects Europe’s realization that it needs to stand for its own defense and to rearm.
- Reports on March 1 indicate German defense contractor Rheinmetall is proposing to sell its Skyguard air defense system to Nigeria. The country currently relies on outdated systems not equipped to deal with modern threats like cruise missiles and UAVs (Unmanned Aerial Vehicles). The deal would further deepen defense cooperation between the West African nation and Europe whilst boosting the defense industry of the EU’s biggest economy.
- Important Tunisian opposition figures were put on trial on March 4, accused of “plotting against the state security” and “belonging to a terrorist group.” The trials are the culmination of arrests that began two years ago and representative of President Kais Saed’s authoritarianism in using state power to silence any opposition. Under pressure from economic challenges, Saed appears increasingly repressive and continues to concentrate power in his own hands.
Insight of the Week
Explore This Week’s Podcast Episode:
Do not hesitate to contact us if you have any questions.
Copyright ? 2024 Consilio International AB, All rights reserved.
