Global Trade This Week – Episode 215
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Brugh, you're watching global trade this week with Pete mento and Doug Draper, Hello everyone, and welcome to another edition of global trade this week. I am one of your hosts. Doug Draper, coming to you from actually my home in Steamboat Springs, and trying to get a cool view of the background, but it's just all white. It out so, but that's neither here nor there. My other host, who is on the other side of the coast and getting ready to make his European trip over there, is Mister Pete mento. So Pete, what's going on? My friend, Hey, buddy,
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hitting you from home this week. Excited to actually be my own apartment, but I'm leaving for Norway and tomorrow, so pretty
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soon, yeah, I was just thinking, as you and I are looking here they they like, what is zoom and teams etiquette? It's probably not to have light coming from behind you, right? Because both of our backgrounds are, like pure white
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makes us look it makes us look holy, angelic.
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Yeah, more so, I guess with the beard. But anyway, we're going to hound through this show, my friend. So why don't you kick us off? And I know there's not a whole lot to talk about.
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So, oh, this. Oh, What a crap weekend. So again, on a Friday, we get the news that the US government is going to be dropping 580 more Harmonized Tariff codes into the section 232 derivatives. The list is publicly available. But here's the thing, it was all stuff that had been publicly available for review for months, we knew which ones were coming, but very few people were paying attention. And now the public comment period is open until the end of the month, where if you disagree with something that's being proposed, you can tell the government that the news went up last week. It's Monday, and I am not seeing people making public comments. I'm shocked. So it's frustrating. Doug, you know, everyone complains about the victimization of tariffs, and yet here's an opportunity for them to do something about it, and I'm not seeing people really take action. So this is the call to action from King of the trade nerds here, if you know that you have a product coming up on the 232, derivative, get up off your butt and say something about it, because very few people are actually fighting these right?
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Now, that's a big step. So my commentary is secondary in this one. Pete, how, how do people make their public comment? Right? I'm just when I was thinking about that, like, what do you just send a video message? Or what tell us about how that happens?
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No, there is a, there's a portal on bis for each one of these. You can put in a comment based on that. You can explain why you believe that these should not be included in the 232 derivative and fight it. It's right there. It's right on the website listed with with the product itself. So there's nothing stopping any of you from going out there and making your feelings known about it. And I really suggest that more of you
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do good. All right, well, that I think that topic just stands alone. Most important thing is, where do you go? Which you shared? Make your public comment. So cool. All right, I jump into my first topic here, and it's no surprise, it just validates a trend that we've talked about multiple times on the show over the course of the last couple of months. And the headline was, container rates hit a nine month low as we're coming on the tail ends of Golden week. Pete, I have to admit that I was not well versed on what Golden Week was, but there was some alignment with other holidays that came up. So this year's Golden Week was pretty massive, almost to the point of a Chinese New Year, a level of exodus from the Chinese economy. But that had some to do with it. But the other piece is that you know that the import volume. This is a very tangible example of how we've talked about the peak. Was kind of a peak, and it was a little bit earlier than before. It was a, you know, a bump in the road, not a hill to climb this year. And the simple fact that there's, you know, still on a negative trend, a downward trend, if you will, for for the spot rates means that we're done right the the inbound flow for q4 on the 13th of October, and I know we're not supposed to time date podcast is pretty much done. And the thing that makes me a little nervous Pete is that q1 is always the slowest. You divide, you know, ocean freight into the four quarters, right? I think the quiet season, the down season, or whatever that happens in q1 and I think that we're entering that now. I heard there's going to be a little uptick, because there's going to be more blank sailings coming along. So. There may be a little, a little blip, but if, if this isn't, you know, a headlight that says peak season is done, it's behind us. And any semblance of, hey, we got a little push towards the end, before the holiday season, that's not going to happen. It's a little discouraging to see that trend continue.
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I think it's more than a blinking light. I think it's a giant 1960s roadside neon sign, or one of those, like one of those spotlights that they have in front of movie premieres. You know, that goes up in the air. It's, it's pretty clear, man, it's pretty clear that volumes have been impacted due to all the changes in trade. But I'm not, I'm not a freight guy, you know? I'll wait to see what the numbers look like six months from now. Man, talk about terrifying. Where we are right now with regards to trade and inbound, it's just scary, Doug, to the point where
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it's scary, yeah, yeah. Well, that brings us to halftime, one of our favorites. You know, we get, we get a little banter, a little relief from the craziness, right? It's brought to us by CAP logistics. They also produce the show. Keenan and his team, excuse me, gives us this sounding board in this platform every single week. So we can't thank them enough. So with that, we're all into halftime. I don't think we've ever gotten to halftime in six minutes before Pete, so we're cranking this thing along
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brevity is a good thing, my friend. So I told everyone for the month of October, I'm doing Halloween themed every week. So Doug, I have a bracket of Halloween candy, much like the sweet 16, right? So I'm gonna give you two candies. You tell me which one's your favorite. We're gonna do the West bracket, first in the East bracket, you ready
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fire away, all
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right. York Peppermint Patty versus Baby Ruth. Oh, probably versus versus three musketeers.
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Say that again. I cut you off. York
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Peppermint Patty versus three musketeers.
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Three Musketeers, mounds
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versus Almond Joy.
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Something Something has nuts, the other one doesn't. I can't
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enjoy it's got nuts. Mounds
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don't. So I guess I'd have to go to mounds.
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Okay, quicks versus Reese's, peanut butter cups, Reese's, Eminem's versus Skittles. Skittles, okay? Three Musketeers versus mounds. Three Musketeers. Reese's Peanut Butter Cups versus you said. Skittles, right?
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Yeah, versus Reese's,
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okay,
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Reese's versus mount.
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Oh, for sure, Reese's
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okay. So we got Reese's in the West final and on the east. Milky Way versus
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Snickers. Milky Way
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quizzlers versus Starburst Twizzlers. This is probably the hardest bracket. Okay, 100,000 grand versus baby roof.
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100 grand, okay, and then payday versus Butterfinger.
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Oh, neither, well,
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what gotta pick one?
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Oh, geez, payday.
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Payday versus 100 grand, 100 grand, and you said Twizzlers, not Starburst, right? Correct? Twizzlers. Twizzlers versus Snickers.
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I gotta go Twizzlers. I like them a
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lot, okay? And that takes us to Twizzlers versus $100,000
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bar Twizzlers.
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Okay, and in the championship round in Vegas, in the big court, we've got Reese's Peanut Butter Cups versus Twizzlers.
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They're both good, but I'm gonna have to say Twizzlers. I know that's probably an unpopular I just road trips. Pete. I get a bag of Twizzlers, and I'll just non stop, non those things for hours.
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Definitely an upset. Doug, definitely an upset. It was a little, a little March. March magic. There. I would have had Reese's Peanut Butter Cups in my final against payday, believe it or not, and yep, yep. And Reese's would have won in mind. So I mean to each their own, you know, but you're you and I were right there pretty much with the same ones, just a
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little bit. Yeah, yeah, good, good. I like that one. I can't wait for next week as we get closer to the magical date, which happens to be on a Friday this year. So you know all hell's gonna break loose
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across I do, yeah, I'm not looking forward to it. I'm actually flying home from New York on the morning of Halloween. So, yeah, I'm not looking forward to
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it, yeah? Well, yeah, yeah. So I saw something in them, and then in the news over the weekend of. How Saunas are kind of the newest, hottest trend, no pun intended. And these are the big cities, right? So they said specifically in New York, like it's an activity where you would go to conduct business, much like you would say, hey, let's let's meet after the bar for a drink where people are going to the sauna to do that, right? So they're talking about, hey, this generation isn't drinking quite as much healthier. This is another example of being healthy. Obviously, there's health benefits that we won't go into, right? But one thing they said on this is that sauna etiquette is paramount, so you're not gurgling your water. You're not sitting too close to somebody. You got to shut the door as soon as you get in. Don't be waiting around for your buddy or holding the door open. So apparently, spa sauna etiquette is a big deal. So my question to you, Pete, on this one is, are you a sauna guy?
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I do like them, which is, which is counterintuitive, because it's 70 degrees in my apartment and I'm sweating right now. I don't and I don't like to be hot, but I do find going to a sauna clears my head, and I, too, have done a lot of research on the health benefits of it. I just can't stay in for super long, like a lot of people do. But I do enjoy them. I do enjoy them, but I don't want to go there with anyone else. I just want to sit in there with my towels, sweat, get the hell out and be left the hell on.
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Yeah, yeah. I'm with you. I'm a sauna guy. I like it. I probably hit it twice a week. To be honest with you, there's a sauna at the gym I go to. And to your point. Just if you come in, don't talk. I don't want to. And you can tell the talkers right when they come in that the silence makes them uncomfortable, and it feels like a Seinfeld episode, right where you just want to zone out and don't bother me. So I'm I'm with you. I like saunas. Just don't talk to me when you're in there.
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It's worse version of plane talkers. I don't like plane talkers.
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Doug, oh yeah, we had a, I think we had a conversation or halftime, that at one point
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you're pretty special if I want to talk to you on a plane. Yeah,
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yeah. So all right. Well, that that was halftime. Cap logistics. Check them out@caplogistics.com second half get started right now.
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Pete, what do you got? I got to get the name of the company up here. I pulled it up beforehand. So the Chinese chip manufacturer next period, their their operations were seized by the Dutch government this weekend. So the the decision was made to basically take it over by by the Dutch government out of security fears. So they have gone in there, and they have nationalized this Chinese asset in the trade war. You know, this is the kind of thing I was expecting to happen in China, because it has happened a lot in China. Let's just be honest, the way they've nationalized a business. But the the chip argument right now in this trade war has become such that the open minded, pretty cool people of the Netherlands have said, Nope, I drink your milkshake. This is mine now, and taken it over. And I wonder if this is going to be a sign of future such nationalizations happening of similar technologies around the world and Doug, I think it is. I think if this continues to go the way that it is, I would not be at all surprised if we saw more and more of these.
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Yeah, I saw that one when you sent over the show notes, and I was like, Well, how did, how do they do that? Right? So I'm not going to get into like, did they storm the castle, so to speak, but the thing that kept coming back is that there's a tech and trade division in the world, and there's two factions that are starting to come together, right? It's America and the Western world, and Russia, China, North Korea and India and stuff. So I think that it's just another tangible example of how tech and trade, tech and trade are really starting to divide not nations, but the entire world, as things see. So it's a little scary as far as how this just happened with a group and a nation that I would have been I'm very surprised, right? Truly
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shocking, yeah, all right, but bring us home. All right.
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Well, this relates to tit this goes into the tit for tat category, right? So, I don't know if you saw there's obviously vessels that are flagged Chinese, operated by Chinese or made in China, are going to start getting dinged with the first protocol in the United States. Well, China is doing the exact same thing. So they're saying vessels that are owned and operated by US firms, right? Or. Those that are built in the United States will be charged additional port fees, and I think that starts tomorrow. Right? Again. We're not supposed to timestamp podcast, but I just did it twice tomorrow, meaning October 14. Obviously it's a countermeasure to what we're doing over here. It's a tangible example of Worsening trade friction, right? We got the 90 day pause. It's, it's coming up in about a month. So it's really, it's really disheartening. But the one thing, if you dive into the numbers, which I did and according to the center, and I'm reading this to make sure I do it right, for international maritime security, right? That us flagged vessels, or vessels that are built in the United States is less than 3% of all vessels. Comparatively, the Chinese flagged or built in China represents 19% so one in every five ships is impacted, where the US version is simply less than 3% so the tit for tat seems to be of interest, but the real impact is almost negligible and doesn't really matter. The last piece I'll leave you with Pete is that 65% of all the new ship build orders will be made and manufactured in China. So it's interesting to see that it's another example of the trade war, but the ultimate revenue generating stream on the Chinese side is pretty much non existent. So I don't know if you heard about this or
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yeah, this really got my attention, man. So, you know, the new vessel fees on Chinese operated, built their own vessels, pretty big deal, right? And you have these ocean carriers who have the ability to say, All right, we're just not going to have our Chinese ships call on US ports. Well, we have enough Korean ships, we have enough Indian ships, whatever, we'll be good to go, but, but when you look at it the other direction, if I'm an American operator, I have choice. This is what I got, right and it will have an impact on them, but it's such a small amount, it really feels like in the trade war right now, both sides are doing everything they can to ramp it up right now. You know, the negotiations are getting as nasty as nasty as they can possibly be before we end up making some decisions. So I don't know if these will stick, but I do believe the US ones will.
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It'll be interesting to see. There's so much going to transpire in the next 30 days related to global trade that we're going to have ample topics to discuss in the near term. We are,
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we are. So that's going to wrap it up this week for a very action packed, but abbreviated version of global trade this week, want to thank our friends at CAP logistics for their continued support. And of course, Doug got to thank you for being the CO hostess with the most, and our good friend Keenan, who between conditioning and applying essential oils to his beard, finds time to handles the buttons and dials for us. So we want to thank everyone for joining. Hit subscribe. Make sure you tell your friends if it's happening in global trade. We're talking about it at global trade this week. Take it easy,
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buddy. Okay. Travel safe, my friend. Thanks. Pal. Brugh.
Transcribed by https://otter.ai