Daily Brief - 20 Dec 2023

Red Sea chaos has shippers bracing for weeks without key trade route

The Red Sea, a crucial trade route, faces weeks of disruption due to Houthi militants attacking ships to back Hamas in their conflict with Israel. This has led to heightened security concerns and the re-routing of ships around Africa, adding $1 million and up to 10 days to each journey. The situation threatens to surpass the 2021 Suez Canal crisis in impact.

Shipping companies like Hapag-Lloyd have stopped using the Red Sea route. Potential solutions like naval convoys are being considered, but their implementation is complex and resource-intensive.

A US-led task force, Operation Prosperity Guardian, is yet to detail its protective measures, causing further delays and uncertainties for shippers.

Trump blocked from Colorado's 2024 ballot after court ruling

Donald Trump has been disqualified from appearing on Colorado's 2024 presidential ballot by the state's Supreme Court, a decision linked to his role in the January 6 Capitol attack. The court's ruling, based on a Constitutional provision against insurrectionists, is the first of its kind and will be appealed to the US Supreme Court. Trump's campaign argues this is a political move to undermine his strong position in polls against Biden. The ruling raises significant legal questions and could lead to an expedited decision by the US Supreme Court due to upcoming primaries. Trump's legal challenges continue to mount, with this ruling adding a new dimension to his political and legal battles.

China eases approach to secure EV exports to Europe

China is working cooperatively with the European Union, despite an EU probe into Chinese electric vehicle (EV) subsidies, to maintain its EV exports to Europe. Chinese EVs are significantly more expensive in Europe than in China, partly due to lower labor costs and subsidies in China.

European markets are crucial for Chinese EV manufacturers as the US market is less accessible due to high tariffs. The potential introduction of EU tariffs on Chinese EVs could further complicate trade relations.

China's EV market faces challenges, including oversupply and competition. The outcome of the EU probe and subsequent actions could significantly impact the global automotive industry.