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Chain Reaction
Chain Reaction is the podcast 'All About Supply Chain Advantage' containing regular audio snippets relevant to C suite executives, supply chain professionals, researchers, policy makers in government, students, media commentators and the wider public. New episodes each week discuss hot topics in the news and supply chain ideas relevant to everyone involved in supply chain management. There are special editions too.
Our goal is to keep our listeners updated and informed about the various factors that can influence the dynamics of supply chains. As the world continues to evolve, so too do the complexities of global supply chains. By keeping an eye on these global events, we can anticipate potential challenges and opportunities, and navigate the ever-changing landscape of supply chains with agility and insight.
Chain Reaction
From Auto Industry Shocks to Strategic Mineral Deals: This Week's Supply Chain News
The weekly Pulse podcast examines how Trump's upcoming tariffs will disrupt global supply chains and increase consumer prices, particularly in the automotive industry with car costs projected to rise by $2,500-$12,000.
• Trump's 25% tariffs on imports from Mexico and Canada set to begin April 2nd will impact both foreign and domestic automakers
• Leaked documents reveal a US-Ukraine deal giving America control over Ukraine's natural resources in exchange for reconstruction funding
• Vice President Vance's visit to Greenland connects to US strategic interest in the mineral-rich territory's military importance and natural resources
• Chinese EV manufacturer BYD dramatically outperforming Tesla in China with 27% market share compared to Tesla's 4.5%
• UK consumers losing £71.2 billion annually to faulty goods and services, with 70% reporting problems and 25% experiencing negative mental health impacts
• Sky Television cutting 2,000 call center jobs, replacing human customer service with AI systems
• WH Smith selling its 480 high street stores after 233 years, rebranding as TG Jones while keeping travel locations
Check out our special episode on Trump's tariffs and their impacts in the Chain Reaction podcast, and visit the Tony Hines blog for an analysis of rising household costs in the UK.
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About Tony Hines and the Chain Reaction Podcast – All About Supply Chain Advantage
I have been researching and writing about supply chains for over 25 years. I wrote my first book on supply chain strategies in the early 2000s. The latest edition is published in 2024 available from Routledge, Amazon and all good book stores. Each week we have special episodes on particular topics relating to supply chains. We have a weekly news round up every Saturday at 12 noon...
Hello, tony Hines. Here You're listening to the Chain Reaction Podcast, all about supply chain advantage. Great that you could drop by today. Great episode coming your way in just a moment. This is the Pulse, the heartbeat of business, weekly. Stick around, stay tuned and find out more.
Tony Hines:Well, there's been a lot going on this week in the United States with President Trump on his tariff horse again and he's really upsetting quite a lot of nations at the moment with his tariffs and all the uncertainty is upsetting all the markets as well. And you can listen to an episode all about Trump's tariffs and truculence in the Chain Reaction podcast. It's a special and it was out on Friday, so drop by and have a listen to that. It's quite informative. It'll bring special and it was out on Friday, so drop by and have a listen to that. It's quite informative. It'll bring you right up to date and we're expecting new tariffs to hit on the 2nd of April and it's likely to disrupt supply chains everywhere and it's certainly going to affect the auto industry very hard. About 36 companies big companies will be affected quite badly by these tariffs. And if Trump thinks the United States is going to be immune from all this, he's quite wrong, because the percentage make-up of components in cars, which he's also placed the tariffs on, is around 50% in some American-made cars. So it's a big issue. Sooner or later he's going to realise that this is going to cause inflation, price rises, price hikes. Estimates have been made that it will add about somewhere between 2,500 to 12,000 US dollars to the production cost of making cars, and that could be in the United States. And what does that mean? Who pays those? Well, it isn't foreign governments and it isn't other countries, like Trump is suggesting. It's consumers. Consumers will pay when they purchase a car at much higher prices. So he's actually taking money away from everybody. The sticker price on new cars is likely to increase.
Tony Hines:With all the 25% tariffs being slapped on on April 2nd, cars, trucks and SUVs will go up by thousands of dollars, and that sent many of the automakers' shares much lower in trading since late on Wednesday this week. The tariffs don't just affect foreign automakers, but many domestic nameplates such as GM's Chevrolet and Equinox. Suv's Transmission may be assembled in the US and shipped to Mexico for final assembly before it ends up on a sales lot somewhere near you. I think what's lost on the Trump administration is just how complex these automobile markets are and how the manufacturers have organised their supply chains over many years to be slick, efficient and fast. And what they're actually doing with these tariffs is slowing everything down, putting costs up. And those costs only come one way it won't be the auto truck makers that absorb the cost. It will be the consumers.
Tony Hines:The government's own data in the United States shows that 39 models on sale in the US are imported from either Canada or Mexico, and that includes both domestic and foreign manufacturers. Experts have been predicting that costs will increase anywhere from about $4,000 to $12,000. Some estimates are a bit lower they say from two thousand to twelve thousand, but much of the cost will go straight to the consumers. People who buy those vehicles will be paying a lot more for them. Vehicle prices have risen already since 2020, and the average price is now around fifty thousand dollars. And, of course, the stock markets are marking all those producers and the shares down. They're valued less come this weekend than they were last weekend by significant amounts, and by the end of next week they could be even lower.
Tony Hines:A trade group that represented Ford, gm and Stellantis said earlier in March that the import costs would stymie American competitiveness. It will increase consumer prices and it means fewer jobs in the US automobile industry. It's not just cars that are threatened by President Trump's tariffs, of course. About half of United States fruit and vegetables are imported and they come from Mexico and he's placed 25% tariffs on those. So everyone in the United States will be paying a lot more for their fruit and veg. It will likely put the prices of those products and ingredients in foodstuffs up, so food inflation is likely to spike up. So food inflation is likely to spike.
Tony Hines:Are you wondering why President Trump wanted the minerals deal so badly with Ukraine? The talks with President Zelensky seemed all about the minerals deal and not much about much else. Under the terms of the deal, ukraine will give the United States control of the war-torn country natural resources, and that includes gas, oil and metal. So it's not just metals, it's not just minerals. Apparently there's a leaked document which reveals the information that's fallen into the hands of the Daily Telegraph in the United Kingdom. The latest version of the US-Ukraine Reconstruction Investment Fund is alongside the talks taking place between America and Russia over possible cooperation on energy projects in the Arctic, and they're also talking about restoring flows from western Siberia into Europe, and that would mean that gas would flow through Ukraine and the Baltic network when the Nord Stream pipeline is returned to operation. It will also control other natural resources and, it says in the leaked document, including, but not limited to, roads, rails, pipelines and other transportation assets, ports, terminals and other logistic facilities and refineries, processing facilities, natural gas liquefaction and so on. So this new fund that's talking about being set up has five board members, three of whom will be chosen by the United States, and they'll have A shares and golden shares. In other words, they can outvote anybody else. The US would claim royalties from the fund until Ukraine has paid off the 100 billion US dollars that the Trump administration says it's owed by Kiev, and they're going to charge 4% interest on top. That's about half or more than half of Ukraine's gross domestic product, and many think it's unpayable. Ukraine will only be given B shares and receive 50% of the royalties. Once it's paid, the United States and the US government will have first refusal on all projects. So you can see why the US was so desperate to get that deal agreed.
Tony Hines:You might also be aware that this week Vice President JD Vance was visiting Greenland. Rumours say it's nothing to do with the Trump administration's desire to get hold of Greenland. I mean, there's no doubt about that. Trump said it on Truth Social. He said he wants hold of Greenland. I mean, there's no doubt about that. Trump said it on Truth Social. He said he wants to have Greenland. It's a must-have. But the people in Greenland aren't too pleased about the visit and of course Vice President Vance will not be visiting the capital. So I suppose that's some sort of win for the community in Greenland.
Tony Hines:Denmark's been fairly quiet about it because they of course actually own Greenland presently. President Putin said in a speech in Murmansk this week that he's not surprised that President Trump wants to take over control of Greenland. And he said the United States has always had an interest in Greenland and mineral-rich territories. He said they tried to buy it back in the 1860s and they tried again to buy it from Denmark after World War II. So nothing new here. President Putin went on to say it didn't bother him.
Tony Hines:So for those of you wondering why the United States has shown interest in purchasing Greenland from Denmark, there are several key strategic reasons. It's militarily important. Greenland is home to the Petufik Space Base, formerly Thule Air Base. It's a critical US military installation for missile defence, space surveillance and Arctic monitoring. Acquiring Greenland would solidify US military presence in the Arctic. Secondly, as Arctic ice melts, new shipping routes are opening, making Greenland a key location for controlling these pathways. This is crucial for both economic and national security interests, especially as Russia and China increase their Arctic activities. It also has natural resources.
Tony Hines:Greenland is rich in rare earth minerals, uranium and other valuable resources which are essential for advanced technologies and could reduce US reliance on China, which dominates the rare earth market. It's a strategic choke point. Submarines traveling from Russian bases in the Arctic would likely pass through chokepoints such as the Greenland-Iceland Gap. This area is heavily monitored by NATO forces, making it difficult for submarines to move undetected. The US and its allies have advanced anti-submarine warfare capabilities, including sonar systems and patrol aircraft, which are deployed to monitor submarine activity in the arctic and north atlantic. It's a possible route for intercontinental ballistic missiles coming from russia. The rare earth minerals in greenland include neodymium and disposium, which are essential for advanced technologies like smartphones, renewable energy systems and military equipment, and gaining access to these resources could reduce US reliance on China, which currently dominates the rare earth market. With climate change, the melting Arctic ice is transforming Greenland into a more accessible and strategically significant region. Its location offers a vantage point for monitoring and responding to global climate and security challenges.
Tony Hines:The US has a history of interest in Greenland dating back to the 19th century. It tried to purchase Greenland back in 1860, and after World War II, the United States even offered to purchase Greenland for $100 million, highlighting the long-standing strategic value. So that's why Greenland is desirable as an asset for the United States in terms of security resources and its geopolitical positioning. It's about geography, it's about where it is and closing those pinch points down so that the United States is not threatened. Those pinch points down so that the United States is not threatened.
Tony Hines:General Motors, ford and European brands such as BMW and Mercedes-Benz have all seen their stock market prices drop due to concerns over increased cost and disrupted supply chains. Analysts estimate that the tariffs could cost the auto industry tens of billions of dollars. In the United States, us-based electric vehicle manufacturers like Tesla and Rivian have fared better, as their production is largely domestic. Tesla stock, for instance, has risen, benefiting from reduced competition from imported vehicles. Having said this, there are protests against the company and many in Canada and in the United States are returning their vehicles, and there are protests at Tesla's showrooms. There are global concerns in Europe and Asia, and they've also felt the ripple effect, with automakers like Hyundai and Toyota experiencing stock declines.
Tony Hines:The tariffs are expected to impact global trade dynamics, particularly for countries heavily reliant on automotive exports. The broader market remains cautious, with fears of inflation and an economic slowdown looming. As the tariffs bite, many are pessimistic. I think it will be inflationary. Costs and prices will have to rise, but at the same time, this won't add anything to profit for all homemakers, which means investment and employment will fall. I also think it could turn into a global depression if these tariffs continue. The uncertainty in the market Tariffs just lead to higher prices for consumers and businesses, and when the profits shrink, companies will cut back on investment and jobs, and that could strain global economies, especially if other nations retaliate with their own tariffs. A prolonged trade war could exacerbate all of these issues and it could potentially lead to broader economic downturns.
Tony Hines:The million-dollar question, of course, is will Trump reverse the tariffs? Historically, he's shown a tendency to double down on his policies even in the face of criticism. However, the mounting economic and political pressure, both domestically and internationally, might force him to reconsider. The stakes are high and the global economy is watching closely. It's a tense moment In China.
Tony Hines:Tesla isn't doing quite so well. Byd holds a commanding 27% of the new energy vehicle market, while Tesla's share has dropped to just 4.5%. Sales figures in January 2025 alone, byd sold nearly 300,538 NEVs in China, and that's five times as many as Tesla, with 63,238 units sold. Byd has also introduced advanced features like autonomous driving in models priced below $10,000, and a battery system that provides 400 kilometers of range with just five minutes of charging. That's some battery, isn't it? Global expansion of BYD is not only thriving in China, but it's expanding aggressively into markets in Singapore, the UK and India, and there are major advertising and promotion campaigns underway. The technology is better and the cars are cheaper, and the cars are cheaper.
Tony Hines:There was an interesting article in the Eye newspaper this week which caught my eye, and it was by David Conneth. It was about faulty goods and services, which are costing UK buyers 71.2 billion pounds. That's about a hundred billion dollars, isn't it? So this was a comprehensive study that was commissioned by the government, and seven in ten consumers that's 70% complained about faulty goods or services. According to this Consumer Detriment Survey, one in three were down to poor quality that's 35% in the survey, delivery issues were 20% and defective products or unsafe products 19%, and a complete failure to provide anything 18%, and the average loss of each incident was estimated at £32, about $40. And that included time spent by the consumer trying to resolve the issue.
Tony Hines:I think that's one of the big problems these days that it takes an awful lot of time to get hold of anybody and to resolve issues with many companies and even very big companies energy providers, those sorts of companies Very difficult to get hold of, very difficult to resolve an issue Not with all of them, but with many of them. Four in ten 44% said that the impact of fighting to get what they'd paid for left them feeling anxious, helpless, upset or misled. A quarter said their experience had a negative or very negative effect on their mental health, and 22% said it affected household finances, and one in six said it affected their physical health. This was a 2024 study commissioned by the Department for Business and Trade, and it gathered data from thousands of consumers. So a very interesting article indeed.
Tony Hines:And while we're talking about customer service, I also noted this week that Sky Television is to axe 2,000 call centre staff. The broadcaster is planning to cut jobs in its traditional call centre roles and it's replacing them with AI-guided services. So I'm guessing these are chatbots. And well, is that better? So three of its 10 customer service sites in Stockport, sheffield and Leeds will scale back to cut costs. So another problem getting hold of people.
Tony Hines:I don't know about you, but sometimes I've found myself shouting down a telephone trying to get the chatbot or the AI bot to put me through to a human being where I can get some sense, rather than going round in a loop. Chatbots quite often root you round in loops and they drive you loopy, so to speak Forgive the pun in loops and they drive you loopy, so to speak Forgive the pun. I often find myself having to repeat answers to these chatbots when I'm on a telephone line, and if I don't give some kind of prescribed, expected answer, then they ask the same question again and again, and again. So I'm not a fan of that. I'd much rather speak to a human person who can respond as humans do, and only humans can. I suppose the big question is when these companies save costs, and inevitably they're going to search for ways to become more efficient. We'd expect that we want them to be more efficient so that we don't have to overpay in subscription fees. But at the same time we want service, and that service can often only be given through human contact and we oughtn't to think that AI can absolutely replace every human contact. I wonder if there'll be any backlash against this from consumers over time. Be interesting, won't it?
Tony Hines:As we're about to enter April in the United Kingdom, it will be interesting to see how the national insurance contribution hike by the government and the increase in national minimum wage hikes, which will drive up costs for businesses, will actually impact those businesses. A number of retail organizations have said they'll have to put up prices and there were many complaints at the time of those announcements by various businesses saying it was a tax on employment, a tax on working people, which of course the government said that's not what they wish to do. They don't wish to tax working people any higher, but by placing the tax on employers what they might be doing is causing those businesses not to hire as many people, so there won't be as many job opportunities. So a bit of a contradiction in the way these arguments take place. Next, this Week reported an increase in their profits, hitting a landmark figure of over £1 billion in pre-tax profits. That's what they expect by January 2026, but they expect to put prices up also by 1% as a result of these cost increases by government.
Tony Hines:And, of course, this week the Chancellor of the Exchequer in the United Kingdom gave the spring statement where there were a number of cuts to service departments and, of course, to welfare payments, which many think are going to be quite all to fund the increase in defence costs which have been pushed by President Trump. He wants Europe to pay more of its own defence cost, which is not unreasonable. So the British government has said it's going to push defence spending up to two and a half percent of GDP this year and it wants to get to a figure of about 3% in the next three or four years. The Office for Budget Responsibility has said that it would cost over £17 billion to move from 2.5% GDP in 2027 to 3% GDP for defence. So it's likely that would mean tax rises in the next budget to pay for defence. So it's likely that would mean tax rises in the next budget to pay for that. So if the Chancellor of the Exchequer is unpopular now, he's likely going to be a lot more unpopular when that's announced, even though people recognise that the expenditure on defence is important.
Tony Hines:Inflation in the United Kingdom reported by the Office for National Statistics lowered to 2.8% this week, so that was some good news for the government. Not sure if they had anything to do with it, of course. I think it's just a fact. Governments always assume credit for things when they're going well and of course, it's always external conditions and global change that causes those things. But inflation goes the other way, isn't it? Take the credit when it's not yours and don't take the blame when it is yours. That's the motto of governments. I think there was a call by Lord Brook of Halverthorpe this week who suggested that Cola, pepsi, kfc and Big Macs should be among those items that we should consider applying 25% tariffs to, in retaliation to any tariffs that President Trump might put on the United Kingdom. And the reason for the tariff on US products? They're fuelling obesity. Well, this came up in a house of lords debate on friday on the uk food system and obesity levels. So some seriousness in there.
Tony Hines:Steel production is once again under threat in the united kingdom and that's a very serious issue because it takes away the capability of the united kingdom to produce its own steel. A scunthorpe plant is under threat likely to close and of course, in South Wales the two blast furnaces are to close also. We've known about that closure for some time, but it's now becoming more of a reality and I think the change in the arrangements for automobile production could well push down the demand for steel as the tariffs on automobiles bite, so this could be a hastened consequence of President Trump's tariffs. In Scunthorpe, the company has reportedly turned down a £500 million government offer to help the transition to a greener form of steel production with a new electric arc furnace, and if the plant closes it would end 160 years of production at the Scunthorpe plant. It's owned by a Chinese company at the moment, jinghai, so it's not British, not British steel anymore. The industry body, uk Steel, has warned that the closure of the plant would mean the UK loses vital steelmaking capabilities, which is critical for transport, infrastructure and construction. And of course the government has big plans on construction and infrastructure projects, so it would leave them open to have to go to international markets to purchase steel.
Tony Hines:Now, if you like the Chain Reaction podcast, don't forget to subscribe and you'll be first to know when new episodes drop and there are some interesting episodes out presently all about tariffs. So drop by and pick those up and find out what's been happening. If you're not up to speed with things, the other thing is take a look at my blog because I have an interesting article up there on how council tax and energy costs and other household costs have been pushed up over the past few years and it's estimated this week, after the spring statement, that the annual bill faced by households due to the increase from next week, with council tax and energy costs going up by more than the rate of inflation, it's likely to add about £400 to everybody's household cost. My blog article on the Tony Hines blog tracks costs for water bills, for energy and for council tax over the past few years and you can see how things have already increased substantially and now they're going up even more. And many think that not enough is being done to tackle those energy costs and water bills, declining services, sewage spills by water companies and energy companies just pushing up their household and domestic bills and business bills upwards, ever upwards. And although there's a cap on energy costs for households, strange how the bills always go right to the cap and somehow the bills exceed the cap when you actually get them. So does the cap actually mean anything? That's my question, when you actually get them. So does the cap actually mean anything? That's my question.
Tony Hines:And finally, some sad news from the retail world this week, as WH Smith, a high street name in the United Kingdom, is quitting the high street after 233 years. It's a book and stationery retailer and it sold its 480 high street stores, employing around 5,000 people, to hobby craft owner Medela Capital for 76 million pounds. It will eventually rebrand as TG Jones. Not sure where the TG Jones comes from. So from Smith to Jones, a bit like Smith and Jones. So from the English Smith to the Welsh Jones. The sale doesn't include the retailers' travel locations, such as shops in airports and train stations, nor does it include the WH Smith brand, which is why it's going to be TG Jones on the High Street. All the staff and all the stores on the High Street will move to Modelo Capital's ownership. It will still have a travel division and shops in hospital, which will not change. It earns about 80% of its profits now from those travel stores.
Tony Hines:It grew its business from when it started in 1846 at the start of the railway boom. You might remember that in 1830, stevenson's rocket set off on a trip from Liverpool to Manchester the first steam train to do so in the United Kingdom a 30-mile trip or thereabouts. And the business took advantage of that UK railway boom and the increase in passenger transport and it opened its first new stand at Euston Station in 1848. And two years later it opened in Birmingham, manchester and Liverpool. So the end of an era, indeed. Well, that's it for this week. I hope you've enjoyed the pulse, everything impacting global supply chains this week and a little bit more. I'll see you next time in the Chain Reaction Podcast. Until then, take care bye. For now you've been listening to the chain reaction podcast, written, presented and produced by tony hines.