US cuts off China + Mexican beer dominates 🍺

Author

Ben Thompson
November 02, 2023

Ahoy There! Today its the condiment that makes everything taste better…Tomato Sauce 🍅. Ever wondered who's the king on the global stage? The Netherlands 🇳🇱 takes the crown, pouring out a whopping 20% of the world's exports, valued at an impressive $430 million. So the next time you squeeze that ketchup bottle, remember there's a good chance it has a Dutch touch! Watch the full manufacturing process here.

In today’s email:

  • Stop Right There: ✋🏽 Nvidia told to cease shipments to China immediately.

  • Number One: 🍺 The Mexican beer takeover.

  • I’ll Take That: 🤝 Flexport acquires Convoy’s technology for undisclosed sum.

TRADE NEWS

Nvidia Halted From Shipping AI Chips To China

The US has directed Nvidia to immediately cease shipments of its high-end artificial intelligence (AI) chips to China. This abrupt action, initially slated to take effect 30 days after October 17, has been fast-tracked for reasons Nvidia hasn't disclosed. The move aligns with President Biden's broader strategy to prevent countries, notably China, from acquiring such AI chips.

Despite the sudden shift, Nvidia remains optimistic. In a statement to the US Securities and Exchange Commission, they highlighted the robust global demand for their products, suggesting they don't foresee a significant financial setback in the near term.

These new curbs focus on Nvidia's AI chips, which were designed for the Chinese market in line with earlier regulations. The decision escalates the ongoing tech standoff between the US and China. In a previous encounter, China lambasted the US for imposing chip restrictions, emphasizing that it undermines the principles of a fair market economy.

The US counters this argument, asserting that the curbs are essential to hinder China from harnessing cutting-edge tech that could amplify its military AI capabilities. Meanwhile, Nvidia's prominence in the market has soared, with its stock value tripling. The company recently celebrated a milestone, joining the elite $1 trillion market valuation club.

As the situation unfolds, other major players remain silent. Chip manufacturer AMD has yet to release a statement on the accelerated restrictions, and the US Department of Commerce refrained from commenting when approached by the BBC. Full article here

PRESENTING BABBLE

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VIDEO OF THE WEEK

How Mexican Beer Conquered The American Market To Become The Worlds Largest Beer Exporter

For more than a century the American beer market was dominated by domestic beers, but in the last couple of decades a new contender emerged south of the border. But how did Corona Extra and Modelo Especial knock Bud Light off as the king of beers?

GLOBAL TRADE SNIPPETS

95% Of Russia-China Bilateral Trade Now In Rubles & RMB. The share of Russian Ruble and Chinese Yuan settlements in Russia’s total foreign trade has surged to almost 70% as Moscow rapidly shifts away from Western currencies.

Ocean Alliance’s dominant era comes after 2M breakup. The Ocean Alliance comprising CMA CGM, COSCO Shipping Lines and Evergreen Marine Corporation is set to become the largest box shipping alliance once the 2M partnership ends in 2025.

ONE forecasts 94% plunge in full year profit. Ocean Network Express (ONE) has forecast a profit of $851 million for the year ended 31 March 2024, down some $14.1 billion on the previous year.

LOGISTICS NEWS

Flexport Acquires Convoy's Tech Amidst Broader Expansion Goals

In a pivotal move for the logistics industry, Flexport announced its acquisition of the technology stack from Convoy, a once-valued $3.8 billion freight brokerage that unexpectedly shut down on October 19th.

The acquisition discussions, initially reported on Wednesday, culminated in Flexport's strategic decision to further consolidate its position as a dominant force in global logistics. Flexport's CEO, Ryan Petersen, highlighted the deal's significance in a recent communication. "Thanks to this acquisition, Flexport is poised to realize its ambition of becoming a true one-stop-shop, capable of shipping any product, to any location worldwide," Petersen stated.

While the specifics of the agreement remain under wraps, it's confirmed that a handful of Convoy's employees will be integrated into the Flexport team. It's worth noting that this acquisition is solely for Convoy's technology and does not encompass the company's liabilities.

In an optimistic note for Flexport's clientele, Petersen announced the imminent reintegration of Convoy's vast trucking network. This network, accessible to Flexport, comprises an impressive 400,000 truck drivers and 80,000 carriers.

The closure of Convoy, just 18 months post a staggering valuation in its final funding round, has certainly sent ripples across the industry. However, with this acquisition, Flexport aims to transform this turn of events into an opportunity for expansive growth. See Petersen’s full memo here

SHIPWRECK OF THE WEEK ⚓️☠️ 

The SS Thistlegorm, a 415-foot steamship built in Sunderland, England in 1940, boasted an engine with 1,850 horsepower. Sunk by German bombers in the Red Sea in October 1941, this vessel was transporting war supplies such as vehicles and ammunition during World War II.Click to see shipwreck 👀

RECOMMENDED READS 📖

Cornelius Vanderbilt Biography: American railroad magnate. Cornelius Vanderbilt (1794–1877) was one of the wealthiest Americans during the 19th century, often referred to as one of the "robber barons." He built his fortune primarily in the shipping and railroad industries, becoming one of the richest men in the United States. At the time of his death, Vanderbilt's wealth was estimated to be around $100 million approximately $55 billion in 2022 USD adjusted for inflation.

Thinking, Fast and Slow: New York Times Bestseller Kahneman reveals where we can and cannot trust our intuitions and how we can tap into the benefits of slow thinking. He offers practical and enlightening insights into how choices are made in both our business and our personal lives―and how we can use different techniques to guard against the mental glitches that often get us into trouble.

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