In January, the blog suggested that political issues would continue to gain increased importance. Its argument was that the strong economy between 1982-2007, when the US suffered just 16 months of recession, meant political and social issues took a back seat. Money was easily available to ‘solve’ most problems. Since then the global economy has […]
Chemicals and the Economy
2012 sees rising political risk, and protectionism
The world enjoyed an economic SuperCycle between 1982-2007. Its largest economy, the USA, suffered just 16 months of recession during the whole 25 years. As a result, social and political issues took a back-seat. Politicians instead competed to occupy the middle ground. Former UK premier Margaret Thatcher’s phrase ‘you can’t buck the markets’, became received […]
Duty barriers continue to rise on chemical exports
The chemical industry has been one of the great beneficiaries from globalisation over the past 25 years. Today, it is hard to remember just how restricted markets used to be. Tariffs often applied within Regions, as well as between them. In his early years as a product manager, the blog would often spend days trying […]
More words than action at G-20 Summit
When the G-20 met in London in April 2009, they produced a Communiqué containing just 688 words. And as the blog noted in conclusion, there was “no sign of a ‘Plan B’ being developed“, in case the Stimulus measures failed to work. This was still the case last September in Pittsburgh, when the Leader’s Statement […]
China focuses on domestic issues, risks US anger
China is a very difficult country for foreigners to understand. The blog suspects that the best approach is to apply Winston Churchill’s insight on Russia, namely “I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is […]
Middle East worries about rise of dumping charges
Trade protectionism is on the rise around the world, as the blog forecast in its Budget Outlook back in October. It suggested that “arguments about the ‘export of jobs’ will increase“, and argued that “chemical companies will need to keep a close eye on the political arena, as they operate in a complex value chain, […]
P&G warn on global protectionism
P&G’s new CEO, Robert McDonald, has “warned of the risks to global growth posed by increased protectionism in the US and around the world, stemming from the global recession“. interviewed by the Financial Times, McDonald noted that 20% of P&G’s jobs in the US depend on their international business, which accounts for 60% of P&G’s […]
Devaluations risk leading to a Cycle of Deflation
In February, the blog worried that we were at the start of a cycle of deflation, as depicted in the above chart from Comstock Partners. The warning signs were that major excess capacity was developing in many industries, and some major countries were devaluing. Since then, the US and China have both undertaken competitive devaluations […]
China imposes 36% nylon tariff
Protectionism continues to build, as unemployment rises around the world. ICIS news reports China has imposed tariffs of up to 36% on nylon 6. BASF will suffer a 30.4% tariff on US exports, and Honeywell 36.2%. Last month, of course, the US hit China with a 35% tariff on tyres. The threat of more duty […]
Tyre duties highlight protectionist pressures
Globalisation flourished whilst economic growth was strong. Jobs lost in Western countries were replaced by new jobs. Whilst cheaper production offshore kept consumer prices low, as well as bringing more people into the world economy. But today’s economic downturn means this virtuous circle is turning vicious. Western countries are becoming more protectionist and hope to […]
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