at 7.5 percent in January, and is expected to start raising interest rates next month. Higher energy prices set off by a conflict in Europe may be transitory but they could feed worries about a wage-price spiral.

“We could see a new burst of inflation,” said Christopher Miller, a visiting fellow at the American Enterprise Institute and an assistant professor at Tufts University.

Also fueling inflation fears are possible shortages of essential metals like palladium, aluminum and nickel, creating another disruption to global supply chains already suffering from the pandemic, trucker blockades in Canada and shortages of semiconductors.

The price of palladium, for example, used in automotive exhaust systems, mobile phones and even dental fillings, has soared in recent weeks because of fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, used to make steel and electric car batteries, has also been jumping.

It’s too early to gauge the precise impact of an armed conflict, said Lars Stenqvist, the chief technology officer of Volvo, the Swedish truck maker. But he added, “It is a very, very serious thing.”

“We have a number of scenarios on the table and we are following the developments of the situation day by day,” Mr. Stenqvist said Monday.

The West has taken steps to blunt the impact on Europe if Mr. Putin decides to retaliate. The United States has ramped up delivery of liquefied natural gas and asked other suppliers like Qatar to do the same.

negotiations to revive a deal to curb Iran’s nuclear program. Iran, which is estimated to have as many as 80 million barrels of oil in storage, has been locked out of much of the world’s markets since 2018, when President Donald J. Trump withdrew from the nuclear accord and reimposed sanctions.

Some of the sanctions against Russia that the Biden administration is considering, such as cutting off access to the system of international payments known as SWIFT or blocking companies from selling anything to Russia that contains American-made components, would hurt anyone who does business with Russia. But across the board, the United States is much less vulnerable than the European Union, which is Russia’s largest trading partner.

Americans, as Mr. Biden has already warned, are likely to see higher gasoline prices. But because the United States is itself a large producer of natural gas, those price increases are not nearly as steep and as broad as elsewhere. And Europe has many more links to Russia and engages in more financial transactions — including paying for the Russian gas.

Oil companies like Shell and Total have joint ventures in Russia, while BP boasts that it “is one of the biggest foreign investors in Russia,” with ties to the Russian oil company Rosneft. Airbus, the European aviation giant, gets titanium from Russia. And European banks, particularly those in Germany, France and Italy, have lent billions of dollars to Russian borrowers.

“Severe sanctions that hurt Russia painfully and comprehensively have potential to do huge damage to European customers,” said Adam Tooze, director of the European Institute at Columbia University.

Depending on what happens, the most significant effects on the global economy may manifest themselves only over the long run.

economic ties to China. The two nations recently negotiated a 30-year contract for Russia to supply gas to China through a new pipeline.

“Russia is likely to pivot all energy and commodity exports to China,” said Carl Weinberg, chief economist at High Frequency Economics.

The crisis is also contributing to a reassessment of the global economy’s structure and concerns about self-sufficiency. The pandemic has already highlighted the downsides of far-flung supply chains that rely on lean production.

Now Europe’s dependence on Russian gas is spurring discussions about expanding energy sources, which could further sideline Russia’s presence in the global economy.

“In the longer term, it’s going to push Europe to diversify,” said Jeffrey Schott, a senior fellow working on international trade policy at the Peterson Institute for International Economics. As for Russia, the real cost “would be corrosive over time and really making it much more difficult to do business with Russian entities and deterring investment.”

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Global Shortages During Coronavirus Reveal Failings of Just in Time Manufacturing

In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them.

Over the last half-century, this approach has captivated global business in industries far beyond autos. From fashion to food processing to pharmaceuticals, companies have embraced Just In Time to stay nimble, allowing them to adapt to changing market demands, while cutting costs.

But the tumultuous events of the past year have challenged the merits of paring inventories, while reinvigorating concerns that some industries have gone too far, leaving them vulnerable to disruption. As the pandemic has hampered factory operations and sown chaos in global shipping, many economies around the world have been bedeviled by shortages of a vast range of goods — from electronics to lumber to clothing.

In a time of extraordinary upheaval in the global economy, Just In Time is running late.

“It’s sort of like supply chain run amok,” said Willy C. Shih, an international trade expert at Harvard Business School. “In a race to get to the lowest cost, I have concentrated my risk. We are at the logical conclusion of all that.”

shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.

But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.

a shortage of lumber that has stymied home building in the United States.

Suez Canal this year, closing the primary channel linking Europe and Asia.

“People adopted that kind of lean mentality, and then they applied it to supply chains with the assumption that they would have low-cost and reliable shipping,” said Mr. Shih, the Harvard Business School trade expert. “Then, you have some shocks to the system.”

presentation for the pharmaceutical industry. It promised savings of up to 50 percent on warehousing if clients embraced its “lean and mean” approach to supply chains.

Such claims have panned out. Still, one of the authors of that presentation, Knut Alicke, a McKinsey partner based in Germany, now says the corporate world exceeded prudence.

“We went way too far,” Mr. Alicke said in an interview. “The way that inventory is evaluated will change after the crisis.”

Many companies acted as if manufacturing and shipping were devoid of mishaps, Mr. Alicke added, while failing to account for trouble in their business plans.

“There’s no kind of disruption risk term in there,” he said.

Experts say that omission represents a logical response from management to the incentives at play. Investors reward companies that produce growth in their return on assets. Limiting goods in warehouses improves that ratio.

study. These savings helped finance another shareholder-enriching trend — the growth of share buybacks.

In the decade leading up to the pandemic, American companies spent more than $6 trillion to buy their own shares, roughly tripling their purchases, according to a study by the Bank for International Settlements. Companies in Japan, Britain, France, Canada and China increased their buybacks fourfold, though their purchases were a fraction of their American counterparts.

Repurchasing stock reduces the number of shares in circulation, lifting their value. But the benefits for investors and executives, whose pay packages include hefty allocations of stock, have come at the expense of whatever the company might have otherwise done with its money — investing to expand capacity, or stockpiling parts.

These costs became conspicuous during the first wave of the pandemic, when major economies including the United States discovered that they lacked capacity to quickly make ventilators.

“When you need a ventilator, you need a ventilator,” Mr. Sodhi said. “You can’t say, ‘Well, my stock price is high.’”

When the pandemic began, car manufacturers slashed orders for chips on the expectation that demand for cars would plunge. By the time they realized that demand was reviving, it was too late: Ramping up production of computer chips requires months.

stock analysts on April 28. The company said the shortages would probably derail half of its production through June.

The automaker least affected by the shortage is Toyota. From the inception of Just In Time, Toyota relied on suppliers clustered close to its base in Japan, making the company less susceptible to events far away.

In Conshohocken, Pa., Mr. Romano is literally waiting for his ship to come in.

He is vice president of sales at Van Horn, Metz & Company, which buys chemicals from suppliers around the world and sells them to factories that make paint, ink and other industrial products.

In normal times, the company is behind in filling perhaps 1 percent of its customers’ orders. On a recent morning, it could not complete a tenth of its orders because it was waiting for supplies to arrive.

The company could not secure enough of a specialized resin that it sells to manufacturers that make construction materials. The American supplier of the resin was itself lacking one element that it purchases from a petrochemical plant in China.

One of Mr. Romano’s regular customers, a paint manufacturer, was holding off on ordering chemicals because it could not locate enough of the metal cans it uses to ship its finished product.

“It all cascades,” Mr. Romano said. “It’s just a mess.”

No pandemic was required to reveal the risks of overreliance on Just In Time combined with global supply chains. Experts have warned about the consequences for decades.

In 1999, an earthquake shook Taiwan, shutting down computer chip manufacturing. The earthquake and tsunami that shattered Japan in 2011 shut down factories and impeded shipping, generating shortages of auto parts and computer chips. Floods in Thailand the same year decimated production of computer hard drives.

Each disaster prompted talk that companies needed to bolster their inventories and diversify their suppliers.

Each time, multinational companies carried on.

The same consultants who promoted the virtues of lean inventories now evangelize about supply chain resilience — the buzzword of the moment.

Simply expanding warehouses may not provide the fix, said Richard Lebovitz, president of LeanDNA, a supply chain consultant based in Austin, Texas. Product lines are increasingly customized.

“The ability to predict what inventory you should keep is harder and harder,” he said.

Ultimately, business is likely to further its embrace of lean for the simple reason that it has yielded profits.

“The real question is, ‘Are we going to stop chasing low cost as the sole criteria for business judgment?’” said Mr. Shih, from Harvard Business School. “I’m skeptical of that. Consumers won’t pay for resilience when they are not in crisis.”

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Why Vaccinating the World Against Covid-19 Will Be Hard

In delivering vaccines, pharmaceutical companies aided by monumental government investments have given humanity a miraculous shot at liberation from the worst pandemic in a century.

But wealthy countries have captured an overwhelming share of the benefit. Only 0.3 percent of the vaccine doses administered globally have been given in the 29 poorest countries, home to about 9 percent of the world’s population.

Vaccine manufacturers assert that a fix is already at hand as they aggressively expand production lines and contract with counterparts around the world to yield billions of additional doses. Each month, 400 million to 500 million doses of the vaccines from Moderna, Pfizer and Johnson & Johnson are now being produced, according to an American official with knowledge of global supply.

But the world is nowhere close to having enough. About 11 billion shots are needed to vaccinate 70 percent of the world’s population, the rough threshold needed for herd immunity, researchers at Duke University estimate. Yet, so far, only a small fraction of that has been produced. While global production is difficult to measure, the analytics firm Airfinity estimates the total so far at 1.7 billion doses.

dangerous new variants emerge, requiring booster shots and reformulated vaccines, demand could dramatically increase, intensifying the imperative for every country to lock up supply for its own people.

The only way around the zero-sum competition for doses is to greatly expand the global supply of vaccines. On that point, nearly everyone agrees.

But what is the fastest way to make that happen? On that question, divisions remain stark, undermining collective efforts to end the pandemic.

Some health experts argue that the only way to avert catastrophe is to force drug giants to relax their grip on their secrets and enlist many more manufacturers in making vaccines. In place of the existing arrangement — in which drug companies set up partnerships on their terms, while setting the prices of their vaccines — world leaders could compel or persuade the industry to cooperate with more companies to yield additional doses at rates affordable to poor countries.

Those advocating such intervention have focused on two primary approaches: waiving patents to allow many more manufacturers to copy existing vaccines, and requiring the pharmaceutical companies to transfer their technology — that is, help other manufacturers learn to replicate their products.

more than 100 countries in asking the W.T.O. to partially set aside vaccine patents.

But the European Union has signaled its intent to oppose waivers and support only voluntary tech transfers, essentially taking the same position as the pharmaceutical industry, whose aggressive lobbying has heavily shaped the rules in its favor.

Some experts warn that revoking intellectual property rules could disrupt the industry, slowing its efforts to deliver vaccines — like reorganizing the fire department amid an inferno.

“We need them to scale up and deliver,” said Simon J. Evenett, an expert on trade and economic development at the University of St. Gallen in Switzerland. “We have this huge production ramp up. Nothing should get in the way to threaten it.”

Others counter that trusting the pharmaceutical industry to provide the world with vaccines helped create the current chasm between vaccine haves and have-nots.

The world should not put poorer countries “in this position of essentially having to go begging, or waiting for donations of small amounts of vaccine,” said Dr. Chris Beyrer, senior scientific liaison to the Covid-19 Prevention Network. “The model of charity is, I think, an unacceptable model.”

halting vaccine exports a month ago. Now, as a wave of death ravages the largely unvaccinated Indian population, the government is drawing fire at home for having let go of doses.

poses universal risks by allowing variants to take hold, forcing the world into an endless cycle of pharmaceutical catch-up.

“It needs to be global leaders functioning as a unit, to say that vaccine is a form of global security,” said Dr. Rebecca Weintraub, a global health expert at Harvard Medical School. She suggested that the G7, the group of leading economies, could lead such a campaign and finance it when the members convene in England next month.

Pfizer expects to sell $26 billion worth of Covid vaccines this year; Moderna forecasts that its sales of Covid vaccines will exceed $19 billion for 2021.

History also challenges industry claims that blanket global patent rights are a requirement for the creation of new medicines. Until the mid-1990s, drug makers could patent their products only in the wealthiest markets, while negotiating licenses that allowed companies in other parts of the world to make generic versions.

Even in that era, drug companies continued to innovate. And they continued to prosper even with the later waivers on H.I.V. drugs.

“At the time, it rattled a lot of people, like ‘How could you do that? It’s going to destroy the pharmaceutical industry,’” recalled Dr. Anthony S. Fauci, President Biden’s chief medical adviser for the pandemic. “It didn’t destroy them at all. They continue to make billions of dollars.”

Leaders in the wealthiest Western nations have endorsed more equitable distribution of vaccines for this latest scourge. But the imperative to ensure ample supplies for their own nations has won out as the virus killed hundreds of thousands of their own people, devastated economies, and sowed despair.

The drug companies have also promised more support for poorer nations. AstraZeneca’s vaccine has been the primary supply for Covax, and the company says it has sold its doses at a nonprofit price.

stumbled, falling short of production targets. And producing the new class of mRNA vaccines, like those from Pfizer-BioNTech and Moderna, is complicated.

Where pharmaceutical companies have struck deals with partners, the pace of production has frequently disappointed.

“Even with voluntary licensing and technology transfer, it’s not easy to make complex vaccines,” said Dr. Krishna Udayakumar, director of the Duke Global Health Innovation Center.

Much of the global capacity for vaccine manufacturing is already being used to produce other lifesaving inoculations, he added.

But other health experts accuse major pharmaceutical companies of exaggerating the manufacturing challenges to protect their monopoly power, and implying that developing countries lack the acumen to master sophisticated techniques is “an offensive and a racist notion,” said Matthew Kavanagh, director of the Global Health Policy and Politics Initiative at Georgetown University.

With no clear path forward, Ms. Okonjo-Iweala, the W.T.O. director-general, expressed hope that the Indian and South African patent-waiver proposal can be a starting point for dialogue.

“I believe we can come to a pragmatic outcome,” she said. “The disparity is just too much.”

Peter S. Goodman reported from London, Apoorva Mandavilli from New York, Rebecca Robbins from Bellingham, Wash., and Matina Stevis-Gridneff from Brussels. Noah Weiland contributed reporting from New York.

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What Would It Take to Vaccinate the World Against Covid?

In delivering vaccines, pharmaceutical companies aided by monumental government investments have given humanity a miraculous shot at liberation from the worst pandemic in a century.

But wealthy countries have captured an overwhelming share of the benefit. Only 0.3 percent of the vaccine doses administered globally have been given in the 29 poorest countries, home to about 9 percent of the world’s population.

Vaccine manufacturers assert that a fix is already at hand as they aggressively expand production lines and contract with counterparts around the world to yield billions of additional doses. Each month, 400 million to 500 million doses of the vaccines from Moderna, Pfizer and Johnson & Johnson are now being produced, according to an American official with knowledge of global supply.

But the world is nowhere close to having enough. About 11 billion shots are needed to vaccinate 70 percent of the world’s population, the rough threshold needed for herd immunity, researchers at Duke University estimate. Yet, so far, only a small fraction of that has been produced. While global production is difficult to measure, the analytics firm Airfinity estimates the total so far at 1.7 billion doses.

more than 100 countries in asking the W.T.O. to partially set aside vaccine patents.

But the European Union has signaled its intent to oppose waivers and support only voluntary tech transfers, essentially taking the same position as the pharmaceutical industry, whose aggressive lobbying has heavily shaped the rules in its favor.

Some experts warn that revoking intellectual property rules could disrupt the industry, slowing its efforts to deliver vaccines — like reorganizing the fire department amid an inferno.

“We need them to scale up and deliver,” said Simon J. Evenett, an expert on trade and economic development at the University of St. Gallen in Switzerland. “We have this huge production ramp up. Nothing should get in the way to threaten it.”

Others counter that trusting the pharmaceutical industry to provide the world with vaccines helped create the current chasm between vaccine haves and have-nots.

The world should not put poorer countries “in this position of essentially having to go begging, or waiting for donations of small amounts of vaccine,” said Dr. Chris Beyrer, senior scientific liaison to the Covid-19 Prevention Network. “The model of charity is, I think, an unacceptable model.”

Pfizer expects to sell $26 billion worth of Covid vaccines this year; Moderna forecasts that its sales of Covid vaccines will exceed $19 billion for 2021.

History also challenges industry claims that blanket global patent rights are a requirement for the creation of new medicines. Until the mid-1990s, drug makers could patent their products only in the wealthiest markets, while negotiating licenses that allowed companies in other parts of the world to make generic versions.

Even in that era, drug companies continued to innovate. And they continued to prosper even with the later waivers on H.I.V. drugs.

“At the time, it rattled a lot of people, like ‘How could you do that? It’s going to destroy the pharmaceutical industry,’” recalled Dr. Anthony S. Fauci, President Biden’s chief medical adviser for the pandemic. “It didn’t destroy them at all. They continue to make billions of dollars.”

Leaders in the wealthiest Western nations have endorsed more equitable distribution of vaccines for this latest scourge. But the imperative to ensure ample supplies for their own nations has won out as the virus killed hundreds of thousands of their own people, devastated economies, and sowed despair.

The drug companies have also promised more support for poorer nations. AstraZeneca’s vaccine has been the primary supply for Covax, and the company says it has sold its doses at a nonprofit price.

stumbled, falling short of production targets. And producing the new class of mRNA vaccines, like those from Pfizer-BioNTech and Moderna, is complicated.

Where pharmaceutical companies have struck deals with partners, the pace of production has frequently disappointed.

“Even with voluntary licensing and technology transfer, it’s not easy to make complex vaccines,” said Dr. Krishna Udayakumar, director of the Duke Global Health Innovation Center.

Much of the global capacity for vaccine manufacturing is already being used to produce other lifesaving inoculations, he added.

But other health experts accuse major pharmaceutical companies of exaggerating the manufacturing challenges to protect their monopoly power, and implying that developing countries lack the acumen to master sophisticated techniques is “an offensive and a racist notion,” said Matthew Kavanagh, director of the Global Health Policy and Politics Initiative at Georgetown University.

With no clear path forward, Ms. Okonjo-Iweala, the W.T.O. director-general, expressed hope that the Indian and South African patent-waiver proposal can be a starting point for dialogue.

“I believe we can come to a pragmatic outcome,” she said. “The disparity is just too much.”

Peter S. Goodman reported from London, Apoorva Mandavilli from New York, Rebecca Robbins from Bellingham, Wash., and Matina Stevis-Gridneff from Brussels. Noah Weiland contributed reporting from New York.

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Treasury Puts Taiwan on Notice for Currency Practices

The Treasury Department said on Friday that it was putting Taiwan, Vietnam and Switzerland on notice over their currency practices, but it struck a more conciliatory tone than the Trump administration by stopping short of labeling any of them a currency manipulator.

The announcement came in the Treasury Department’s first foreign exchange report under Treasury Secretary Janet L. Yellen. The report, which Treasury submits to Congress twice a year, aims to hold the United States’ top trading partners accountable if they try to gain an unfair advantage in commerce between nations through practices such as devaluing their currencies.

Being labeled a currency manipulator requires a trading partner to enter into negotiations with the United States and the International Monetary Fund to address the situation. The blemish is somewhat symbolic but can lead to tariffs or other forms of retaliation if talks collapse.

Both Switzerland and Vietnam had been on the list of currency manipulators after the Trump administration added them last year, and their removal on Friday means no country currently faces that designation. Still, Treasury said there were signs that Switzerland, Vietnam and Taiwan were improperly managing their currencies.

Vietnam and Switzerland as manipulators in its final report in 2020, but the Biden administration said there was insufficient evidence to support the designation. To receive the label, Treasury must conclude that a country manipulates the exchange rate between its currency and the dollar for “purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.”

wrote a report concluding that Taiwan was hiding $130 billion in reserves to mask its currency interventions and that the case for naming it a manipulator was stronger than the case for naming China.

“Taiwan really has been intervening on a large scale to maintain an undervalued currency for competitive advantage,” Mr. Setser wrote on Twitter at the time.

The Treasury Department did not label China as a currency manipulator, instead urging it to improve transparency over its foreign exchange practices.

Treasury kept China, Japan, Korea, Germany, Italy, India, Malaysia, Singapore and Thailand on its currency monitoring list, and added Ireland and Mexico.

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2 Korean Battery Makers Settle Dispute That Threatened Biden’s Green Agenda

Two South Korean manufacturers of electric vehicle batteries that are building plants in the United States said on Sunday that they had reached a $1.8 billion settlement in a trade secrets dispute that threatened the domestic battery supply and, with it, the Biden administration’s green agenda.

The announcement came on the day of a deadline set by the United States’ trade representative to decide whether to veto an International Trade Commission ruling in the intellectual property case between LG Energy Solution and SK Innovation. The commission’s ruling in favor of LG had threatened SK with a ban on supplying batteries in the country and put its facility under construction in Georgia at risk.

The plant, which is still under construction, will supply batteries for electric vehicles for Ford and Volkswagen, and with the settlement agreement, SK is now also free to seek business from other companies.

The dispute had threatened the domestic supply of batteries for electric vehicles. The settlement prevents delays in the development of American electric vehicles and supplies.

as DealBook reported on Friday.

“A week ago, talks between these companies had stalled and 2,600 Georgia jobs were at risk,” Mr. Ossoff said in a statement. The settlement, he said, ensures “thousands of jobs, billions in future investment, and that Georgia will be a leader in electric vehicle battery production for years to come.”

vetoed a decision by the International Trade Commission in a dispute between Apple and Samsung on public interest grounds. But such disapprovals are rare, and the settlement spared the Biden administration from having to take a position. LG is building a plant in Ohio that will supply batteries for General Motors electric vehicles, and Gov. Mike DeWine of Ohio, a Republican, also wrote to President Biden about the dispute last month, urging the president not to veto the decision, arguing that SK should not be allowed to benefit from “stolen intellectual property” against its state workers.

The trade commission’s decision would have excluded SK from the domestic American market while allowing the company to fulfill existing contracts to Ford and Volkswagen. But the plant in Commerce, Ga., is still under construction, and SK expressed hesitation on continuing to build it given that it would be unable to do additional business.

LG countered that SK had overstated its importance to the domestic battery supply and suggested that another company would purchase the plant in Georgia if SK abandoned it. But any disruption to the plans in Georgia could have been a problem for American automakers and the administration, as the international battery supply for electric vehicles is already strained and the administration’s green energy transition plans rely on expanding the use and production of electric vehicles.

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