China rams Philippines ship ⚓

Ben Thompson
September 06, 2024

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In today’s email:

Outta My Way: 🥊 China coast guard rams Philippines ship raising tensions.
In the Red: 💵 US imports surge, widening trade deficit.
Back Up: ⚔️ How ships protect themselves from pirates.
Pick Me: 🇮🇳 Apple shifts production to India for high-end iPhone.

SHIPPING NEWS

Why China Keeps Targeting Philippine Ships

Tensions between China and the Philippines have escalated recently, with China repeatedly ramming Philippine vessels in the contested South China Sea. These incidents stem from China’s claim over nearly the entire sea, which overlaps with the Philippines’ exclusive economic zone (EEZ). The South China Sea is one of the world's busiest waterways, making it a critical region for global trade and security.

A recent confrontation between the Chinese and Philippine coast guards further highlighted the intensity of this dispute. The Philippines was attempting to resupply its military outpost on the Second Thomas Shoal, an area within its EEZ but claimed by China. As the Philippine ships approached the area, Chinese coast guard vessels aggressively blocked them, leading to the ramming of Philippine boats by the Chinese. China justified its actions by claiming to defend its sovereignty, while the Philippines condemned the aggression, pointing to the 2016 ruling from The Hague that invalidated China’s expansive claims in the South China Sea.

The 2016 Hague ruling affirmed that China's "nine-dash line" claims had no legal basis, confirming that areas like the Second Thomas Shoal are within the Philippines' rights. Despite this, China has continued to assert dominance through these confrontations.

The US and other countries have expressed support for the Philippines, raising concerns that the situation could escalate further. As diplomatic tensions rise, this ongoing conflict underscores the need for a peaceful resolution in the region to avoid further risk to global stability and trade. See Clip

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VIDEO OF THE WEEK

The Crazy Techniques Gigantic Ships Use to Fight Pirates in Middle of the Ocean

Modern piracy remains a threat, causing $16 billion in annual losses. Ships use non-lethal defenses like high-pressure water cannons and passive systems to protect against pirate attacks. Innovations in self-righting boats and unmanned rescue vessels enhance maritime safety and security.

GLOBAL TRADE SNIPPETS

Once unthinkable, gas giant Australia is set to import supplies for the first time. Australia, despite being a global gas exporter, faces an impending domestic shortage, forcing the nation to prepare for gas imports to meet rising demand and avoid potential supply disruptions.

US trade deficit widens to two-year high amid import surge. The US trade deficit has reached its widest point in two years, driven by a significant increase in imports, reflecting strong domestic demand and contributing to economic challenges.

Rising steel imports impact global ship recyclers. Increasing steel imports are challenging ship recyclers worldwide, as cheaper foreign steel undercuts local markets, reducing demand for recycled materials and threatening the viability of the ship recycling industry.

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TRADE NEWS

Apple Continues Growing Production in India

Apple's decision to shift production of its high-end iPhone Pro and Pro Max models to India marks a significant milestone in the global tech landscape. Historically reliant on China for both component sourcing and assembly, Apple has gradually increased its production capacity in India, with 14% of its global output now originating from the country. The move is seen as part of Apple's strategy to diversify its supply chain amid global uncertainties, including U.S.-China tensions and pandemic-induced disruptions.

This shift is expected to boost India's "Make-in-India" initiative, especially as local manufacturers like Foxconn begin training thousands of workers in Tamil Nadu. The rapid production shift to India, which previously lagged behind other South-East Asian nations like Vietnam, underscores improvements in India's logistics and manufacturing infrastructure. Increased investment in ports, airfreight capabilities, and highways has further solidified India's attractiveness as a manufacturing hub.

In addition, Tata's acquisition of Wistron’s iPhone production unit adds another layer to India's manufacturing prowess, positioning it as a key player in Apple's supply chain. This growing momentum could contribute to India becoming a major exporter of smartphones, potentially rivaling China's dominance in the sector.

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SHIPWRECK OF THE WEEK ⚓️☠️

La Belle was a French barque launched in 1684 as part of an expedition led by La Salle to establish a colony near the Mississippi River. In 1686, the ship was caught in a storm while anchored in Matagorda Bay on the Texas coast. It sank, leaving the crew stranded. The wreck remained lost until it was discovered in 1995. Today, its remains are preserved and displayed in a museum.................... Click to see Shipwreck👀

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