Supply Chain Shakeups

Global economic growth forecasts have been downgraded to 2.3% for 2025, making it the weakest pace outside of a recession since 2008, while trade tensions and widespread tariff hikes are creating major disruptions across supply chains worldwide. Companies are responding with remarkable agility to these changing conditions, as demonstrated by Apple shifting 97% of iPhone exports to India and Jaguar Land Rover building resilience into its EV supply chain.

• World Bank forecasts global growth at just 2.3% for 2025, down from 2.8% projected earlier
• Trade growth slowing to 1.8% in 2025, down from 3.4% in 2024, due to widespread tariffs
• Apple has shifted 97% of iPhone production to India, sending $4.4 billion worth to US in five months
• Oil prices surged 7% following Israel's strike on Iran, impacting shipping costs and causing rerouting
• Port workers in Rotterdam staged a 48-hour strike, disrupting European supply chain operations
• Jaguar Land Rover hired 50 specialists to focus on material traceability and ethical sourcing for EVs
• US and EU finalized a trade agreement reducing tariffs on technology and green energy products
• Fed and Bank of England maintained interest rates but signaled potential cuts later in the year
• Pentagon gave $200 million contract to OpenAI to develop frontier AI capabilities
• Economic indicators in the US have fallen for six straight months, triggering recession signals

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Chapters

• 0:00 Episode Introduction and Headlines
• 1:31 World Bank Economic Outlook
• 5:57 Apple's India Manufacturing Shift
• 6:56 Israel-Iran Conflict and Oil Prices
• 9:14 Port Strikes and Supply Chain Disruptions
• 14:14 Federal Interest Rates and Corporate News
• 19:07 Economic Indicators and Final Updates

Transcript

Tony Hines: 0:00

Hello and welcome to this week's edition of Chain Reaction, all about supply chain advantage. This is the global supply chain news roundup your go-to source for the latest development trends and challenges shaping supply chains across the globe. I'm Tony Hines and today we'll be diving into some critical stories impacting business, trade and global commerce. So let's get started. Trade and global commerce. So let's get started. In this week's episode, we have Apple rearranging its supply chain to get 97% of the product via India. Foxconn are actually getting 97% of those items in. Then we have Tesla with its X and S models putting the prices up by $5,000. We've got oil prices increasing 7% as Israel attacks Iran. And we have a Boeing Dreamliner crashing in India and their India plane. It killed 241 people in the plane, plus people on the ground, and there was one survivor, remarkably. Those are just some of the things in this week's news. Stick around, stay tuned, stay informed.

Tony Hines: 1:31

The World Bank released its latest global economic prospects report and the outlook is sobering. Global growth for 2025 is now forecast at 2.3%. This is a sharp downgrade from the 2.8% projected earlier in the year. It marks the weakest pace outside of a global recession since 2008. Trade tensions, particularly due to widespread tariff hikes are a major drag. The United States has imposed a 10% tariff on most imports, triggering retaliatory measures from other countries. Global trade growth is expected to slow to just 1.8% in 2025, and that's down from 3.4% in 2024. Inflation remains elevated, with a projected global average of 2.9% in 2025. Developing economies are especially vulnerable. Growth in these regions is expected to average just 3.8% this year, with low-income countries facing even steeper challenges. The long-term outlook If the current trends persist, the 2020s could become the slowest decade for growth since the 1960s. The World Bank warns that without a swift course correction, living standards could suffer deeply, and they also note that easing trade tensions and leveraging technologies like AI could help lift the fog of uncertainty. I also noted this week that Vietnam has joined BRIC. That's a trading group that consists of Brazil, russia, india, china, south Africa and other nations mainly outside of the sphere of the United States, but it's interesting that Vietnam has joined BRICS.

Tony Hines: 3:30

Sluggish trade growth of 1.8%, with cross-border flows, weakening supply chains, could see longer lead times, increased costs and greater volatility, and it might accelerate reshoring or nearshoring strategies in certain sectors. But this, of course, is speculative and it's only the case if they can do that reshoring or nearshoring efficiently and effectively to keep supply chain inventories moving. It's not easy to build some factory capacity in a very short time and it always takes time to move from one hub to another. So not good news for growth in the world economy. The tariff-driven disruptions the 10% US tariff wall is prompting retaliatory measures and it creates uncertainty in global trade lanes, particularly for automotive, electronics and agri-food. Inventory strategies are shifting. In response, firms may tilt further towards just-in-case models to buffer against unpredictability, and that affects warehouse space, transport demand and working capital management.

Tony Hines: 4:46

If we think about ESG measures and the circular economy implications of these forecasts, sustainability is at risk. Lower growth often sidelines ESG initiatives, but investors and regulators are increasingly holding firms accountable. So ESG forward firms might still gain an edge. Circular supply chain momentum might get a boost. Economic pressures could paradoxically accelerate circular models that promise efficiency and waste reduction. Those already integrating lifecycle thinking and systems design might see stronger return on investment under tighter conditions and green financing scrutiny with capital costlier and budgets tighter. Esg-linked finance may become more selective. Solid data and transparency around emissions and impact metrics will be non-negotiable.

Tony Hines: 5:57

Just a year ago in 2024, about 50% of Apple iPhones were exported from India by Foxconn. But between March and May in 2025, 97% of iPhones were exported from India. 97% of iPhones were exported from India. The shift in Apple's strategic response to escalating US tariffs on China-made goods, especially under renewed pressure from President Trump, who's threatened 25% tariffs on non-US-made iPhones. To stay competitive and avoid those costs, apple has ramped up production in India and rerouted nearly all exports to the American market. In fact, foxconn shipped $4.4 billion worth of iPhones from India to the US in just the first five months of 2025. And that's already surpassed the total for the whole of 2024. This is supply chain agility in action.

Tony Hines: 6:56

On June 13th, israel launched a pre-emptive strike on Iranian soil, triggering a sharp spike in global oil prices. Brent crude surged over 10% to $73.12 a barrel. It's its highest price since January. The Straits of Hormuz, through which a fifth of the world's oil flows, is now under heightened scrutiny, with fears that Iran might retaliate by disrupting this critical choke point. The ripple effects are already being felt Shipping insurance premiums are rising, increasing freight costs. There's inflationary pressure mounting globally, with the IMF estimating a 0.4% rise in inflation for every 10% oil prices increase. And then there are supply chain delays which are compounding increase. And then there are supply chain delays, which are compounding, especially as some vessels reroute around Africa to avoid Red Sea risks, and that adds up to about $1 million a journey. This is a textbook case of geopolitical risk colliding with supply chain fragility, something I've explored in my podcasts and writings for some considerable time. So we're next. Oil prices appear to have steadied after the initial surge following the attacks from Israel on Iran and although the situation seems to be worsening, if anything, with the attacks, both ways the oil prices steadied. Brank crude is about $73.50 per barrel and West Texas about $1 less, $72.5 thereabouts, and the longer-term forecast on oil $60 to $65. That's the future price expected. So it might appear that obviously the oil-producing countries have been preparing for this for some time.

Tony Hines: 9:13

Jaguar Land Rover is making a bold move to future-proof the EV supply chain. They've hired 50 new specialists focused on material traceability, ethical sourcing and risk mitigation. Material traceability, ethical sourcing and risk mitigation these experts have been tasked with mapping the origins of critical minerals lithium, cobalt, nickel and rare earths and ensuring compliance with ESG standards. The key elements of the strategy on-ground audits at mining sites to verify sourcing practices. Ai and real-time analytics to forecast disruptions and model the risk. Cross-functional training to embed transparency into procurement and logistics. This isn't just about compliance. It's about embedding resilience and ethics into the DNA of EV manufacturing DNA of EV manufacturing.

Tony Hines: 10:06

Let's talk about the surging fuel prices that continue to send shockwaves through the global supply chain. Crude oil prices have hit a three-month high, driven by geopolitical tensions and production cuts from major oil-producing nations. Higher fuel costs mean increased freight rates, particularly impacting ocean shipping and trucking sectors. For small and medium-sized businesses, these rising costs are squeezing profit margins tighter than ever. Experts warn that if this trend continues, we could see a ripple effect in consumer prices, particularly in essential goods. Let us know how rising fuel costs are affecting your operations. Reach out to us on social media.

Tony Hines: 10:47

Next, let's focus on widespread labour strikes at major international ports. This week, dock workers in Rotterdam, europe's largest port, staged a 48-hour strike calling for improved wages and working conditions. The Rotterdam port strike this week has significantly disrupted operations, adding to broader European supply chain challenges. Workers at APM terminals initiated a strike due to stalled negotiations over job security and automation concerns. The strike lasted 48 hours, affecting vessel schedules and container movements. Major carriers, including Maersk, have decided to skip Rotterdam on certain routes due to congestion and delays.

Tony Hines: 11:29

Inland transport bottlenecks are worsening, with barge delays exceeding 56 hours. There are wider European disruptions, too. Rotterdam is not the only affected port Entwerp and Hamburg are also experiencing congestion due to labour actions and inland issues. These disruptions are causing longer dwell times, increased freight costs and rerouted shipments, affecting global trade flows. Meanwhile, tensions are simmering at ports in Long Beach and Los Angeles, two of the most critical entry points for goods into the United States. What does this mean for businesses? Delays, lots of delays. These disruptions are slowing down container processing times, creating bottlenecks that could take months to resolve. If you're waiting on essential inventory, it's time to revise your timelines and consider alternative routing options.

Tony Hines: 12:22

Now let's move on to a topic that feels like déjà vu Semiconductor shortages. Although there have been some recoveries in chip manufacturing, demand continues to outpace supply, especially in sectors like automotive, electronics and telecommunications. China's export restrictions on key raw materials for chip production, such as gallium and germanium, are adding further strain to an already stretched supply chain. Industry analysts predict this shortage could last well into 2026, urging companies to diversify their suppliers and invest in local manufacturing. Climate change is no longer a distant concern. It's here and it's impacting supply chains right now, from severe flooding in South Africa, disrupting textile production, to wildfires in Canada, hampering rail and road logistics. The message is clear Businesses need to adapt. More companies are turning to green supply chain practices, like using renewable energy and reducing waste, not just as a moral imperative but as a survival strategy.

Tony Hines: 13:37

Major trade agreements are signed. The United States and European Union have finalized a new sweeping trade agreement aimed at reducing tariffs on technology and green energy products. Analysts predict this deal could boost transatlantic trade by 15% over the next decade. This pivotal deal focuses on reducing barriers for green technologies, including solar panels, batteries and EV components. Industry leaders are hailing the move as a significant step towards a sustainable future, but some critics caution that it may increase competition for domestic producers in both regions. While this deal is a win for global trade, we need to ensure it doesn't disproportionately harm smaller businesses struggling to compete internationally. On the flip side, the agreement is expected to streamline cross-border logistics, particularly for tech companies reliant on complex supply chains. Stay tuned as we track the real-world impacts of this groundbreaking deal in the months to come.

Tony Hines: 14:46

The Federal Reserve maintained its benchmark interest rate at a range of 4.25% to 4.5%. This followed lower growth estimates for the American economy to 1.4% and its raised forecast for unemployment. They're still expecting rate cuts later in the year. The Bank of England also kept its main interest rates unchanged at 4.25%. Figures released by the Office of National Statistics this week showed that Britain's annual rate of inflation remains stubbornly high at around 3.4%. Donald Trump's approved Nippon Steel's takeover of US Steel, reducing the uncertainty since December 2023. The US will retain a golden share in the US Steel, which allows it to veto unfavourable decisions those being transferring jobs outside of the United States, and it will still keep its headquarters in Pittsburgh. Fairing jobs outside of the United States, and it will still keep its headquarters in Pittsburgh.

Tony Hines: 15:48

The Parasur show took place against the backdrop of Air India's crash. An interesting story. Rafael, an Israeli defence company, said it would sue the French government after its booth at the show, along with those of other Israeli defence firms, were walled off for displaying what the government described as offensive weaponry. Luca Di Maio is to be the new chief executive of carrying a French luxury goods company. He's leaving Renault, the French car maker. Mr Di Maio currently runs Renault and he's leaving. After his departure announced, the share price dropped significantly.

Tony Hines: 16:30

The Pentagon gave a $200 million contract to OpenAI to develop prototype frontier AI capabilities. This is where a lot of money from the defense industry will be placed in the next months. In the coming months, it will go into AI capabilities and developing new ways in which defense activities will take place in future, and it's expected that AI capabilities are a key to where investment will go. Andy Jassy, amazon's chief executive, wrote a memo to his employers expanding the advances in AI, but he warned staff that some of their jobs would be at risk over the next few years because of the technology as it's rolled out across the company. He also urged workers to use and experiment with AI whenever they could and wherever they could.

Tony Hines: 17:34

Looking to the future of US economic activity in May, for the sixth straight month, the measures have fallen and it's triggered recession signals. There's consumer pessimism, weak new orders for manufactured goods, and there's an upturn in the jobless benefit claims and a drop in building permit applications. The Conference Board's leading economic index fell by 0.1% to 99 last month and in the previous month it was 1.4% down. It's the largest decline in the index since the spring of 2020,. At the start of Covid and as we close out this week, president Trump has decided to strike Iranian nuclear sites, and that was done overnight. Early Sunday morning, airlines, of course, are rerouting around the Middle East airspace after the US attack on Iran. South Korean negotiators are to visit the United States in the next week or so to discuss a trade deal. South Korea, of course, is raising concerns to the United States over potential curbs on chip makers in China.

Tony Hines: 19:06

Finally, let's end on a positive note. Let's talk about technology. Blockchain, artificial intelligence and the Internet of Things are transforming the supply chain landscape, making processes more transparent, efficient and resilient to disruptions. For instance, ai-powered demand forecasting tools are helping retailers maintain optimal inventory levels, while blockchain ensures end-to-end traceability in food supply chains. If you haven't started exploring these technologies, now might be a good time. That's all for this week's edition of Chain Reaction with the Global Supply Chain News. Thanks for tuning in. Don't forget to subscribe to the podcast and share it with your network. Stay informed, stay resilient, stay agile, and we'll see you next week with more updates from the world of supply chains. Until then, I'm Tony Hines. I'm signing off. Take care, see you next time. Bye, for now. You've been listening to the chain reaction podcast, written, presented and produced by tony hines.