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Hello and welcome to Trade Secrets. The horrors of the war in Ukraine are growing, and with them are security and foreign policy tensions spreading across global governance.EU-China summit on Friday, both sides coldly disagree Without resorting to actual punches and kicks, this is about the best you can hope for right now. It is safe to say that official trade relations between the EU and China have not been friendly enough. Any attempts to improve them are subject to China’s attitude towards Ukraine and sanctions on Russia. When it comes to national security and trade, today’s headline is one of the biggest test cases for the ability to build resilient supply chains between like-minded countries, the semiconductor industry. Chartered Waters Checking food prices.
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The Ukrainian war and worsening international trade crunch have given more impetus to a trend that is already gaining momentum (or any appropriate high-tech metaphor) – governments poking around in supply chains, believing they can make things better. As we all know, semiconductors are important here. As scholars Anthea Roberts and Nicolas Lamp argue persuasivelyChips have become the precursor to a series of potentially broader battles to secure vital supplies and build domestic capacity.
semiconductor This is a severe test of the ability of industrial policy to intervene precisely, given the extremely complex globalized supply chains involving multiple stages of R&D, production and distribution.Given the global semiconductor shortage (probably deterioration Ukrainian War), A generation and US Everyone passed the Chip Act to ensure supply.
Suppose they and other big semiconductor producers in the rich world (Taiwan, South Korea, Japan) will try to coordinate their interventions lest they end up doing the same thing. I- guess what? – Doubt this will happen. The planned cooperation mechanisms between the EU and the US are rather weak, and the newly formed trade and technology committees in Washington and Brussels really don’t have enough power to talk to each other on these issues.
Regardless of intent, the Capitol Hill lobby in particular is standing by as always to turn a potentially constructive idea into a bad one. midwest legislator It has managed to reserve some money for the auto industry for less complex “traditional” chips, risking a future glut and companies relying on subsidies indefinitely.In the EU, a lot of money is spent on Let Intel Invest: It’s critical to keep more of the manufacturing part of the supply chain in Europe, because it’s there, it’s there.even Europe Technology industrywhich would benefit from funding, thought it could be better focused.
One of the institutions at the heart of all this is the Inter-University Microelectronics Centre (Imec) in the university town of Leuven, Belgium.The world’s most advanced R&D center for chips and other digital and nanotechnology, with more than 12,000 square meters of Cleanroom For manufacturing, it dominates the critical early stages of the semiconductor supply chain.To your author, a graduate of the Humanities and Social Sciences, some of their activities (the Mission Lucidity project recreated human brain On a chip trying to detect and treat Parkinson’s disease and dementia) seems to be somewhere between science fiction and downright witchcraft.
Founded in the 1980s and funded by the Flemish regional government, it has built a dense global ecosystem of 5,000 expert scientists and more than 600 industry partners. Its China business has declined due to U.S. and EU government export controls, but it is active almost everywhere else. This is an extremely difficult cluster to replicate.
Still, other governments want some action. In a trade-confidential interview, Imec CEO Luc Van den hove said it would build a research facility in the U.S. to connect with universities (and federal funding) there. “We can’t be naive,” he said. “It is politically unacceptable to completely separate supply chains and do one thing in one place and another in another.”
Its ambition is to “build bridges, connect continents and have satellites around the world”. The danger is that governments will push closed supply chains. “Doing nothing on U.S. soil may not be politically realistic, but replicating makes no sense.”
At the EU level, van den Hoof welcomed the Chips Act, but also cited EU Competition Commissioner Margrethe Vestager approvingly about the need for a level playing field. Vestager is skeptical of large-scale government subsidies and has often been at odds with Thierry Breton, the internal market commissioner, an instinctive interventionist and promoter of the Chip Act. Last year, Brittany visited Imec with reporters.
“Every region should have an important place in the global value chain, which doesn’t mean everyone has to do everything,” van den Hoof said. “We shouldn’t get caught up in protectionist rhetoric.” He added: “I support getting Intel into Europe, but Intel’s focus will always be in the U.S. It makes no sense to move Imec from Europe to the U.S., but there is an important research activity in the U.S. meaningful.”
Distance isn’t really an issue, he noted, noting that the distance from Europe to the US east coast is about the same as the distance from the US east coast to the west. The point of decentralization is to be able to create different networks of skilled workers and university research.
One of the best ways for Europe to be part of the secure semiconductor supply chain is not to try to do everything, but to make other economies depend on what it does well. “We should also create reverse dependencies so we can stay connected,” Van den hove said. “Europe has unique assets that are almost impossible to replicate.”
So there is the challenge: diversification without repetition. There’s a lot of public money going into the chip issue, but poor coordination, special-interest lobbying and the risk of good old-economy nationalism mean it will be a challenge to make sure it falls in the right place.
Chartered Waters
The Ukrainian war has forced some tough decisions in Europe’s agricultural sector as Russia’s invasion of its neighbor squeezes food supplies and causes the cost of energy and other raw materials to soar as this excellent work Field reports from FT colleagues from across the continent explain.
The image above shows how this problem goes further than in Europe. It also reflects the price consumers see at checkout.German retailer Aldi is announcing that it is increase price As high as 50% today, blamed on rising production costs due to the conflict in Ukraine. If discount retailers like Aldi can’t handle the cost pressure, it seems likely that others will follow. (Jonathan Moores)
trade link
Soaring energy costs lead to bicycle makers slow down reflux Production to Europe.
The Office of the United States Trade Representative released its annual Country trade estimatesa 500-page complaint about other people’s trade policies.
Cutting off Russia’s gas supply would hit German industry hard, Executive warning.
Peterson Institute for Russia Sanction Tracker Update to last weekend – stay tuned for impact new measures EU is discussing.
Ukraine war hits EU hard farmerhave an impact on global agricultural trade.
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