Showing posts for July 2018
31 July 2018
The Clock Strikes Midnight for Qualcomm’s Takeover of NXP
When the clock struck midnight on the 26th July, the proposed deal that would have seen Qualcomm take over NXP in a £34 billion deal fell through.
After receiving regulatory approval from eight different competition agencies, the proposed merger needed just one more green light. But the nod of approval from China’s State Administration for Market Regulation never came. Nor, in fact, did any sort of answer at all.
China’s silence was to be expected; it was a calculated, passive act designed in response to the ongoing trade disputes between Beijing and Washington.
With the merger breaking down, Qualcomm will buy back as much as £23 billion in stock and pay a hefty £1.5 billion ‘break up’ fee.
But China’s decision to act as a deal breaker by default raises questions about further mergers and acquisitions within the semiconductor industry.
Will Beijing subtly throw other proposed deals off course and into a brick wall of reticence?
30 July 2018
America's Gatehouse Remains Locked
Late Wednesday (26th July) night, after a meeting with Jean-Claude Juncker, Donald Trump strode out of the White House and proclaimed it to be a “very big day for free and fair trade.” Listening to the statement, you’d be forgiven for thinking that the walls around the United States have come down.
But under a façade of understanding and cooperation, very little appears to have changed. The USA
Admittedly, with Juncker’s trip across the Atlantic, the portcullis guarding America appears to have been raised slightly. Though whether the door is going to be unlocked is another question entirely.
Both sides announced that there would work towards a zero-tariff future and that neither side is willing to escalate existing sanctions.
On paper, that sounds great. However, the reality is different. There is still no guarantee on the long-term trading status of the European automotive industry; only the promise that extra tariffs will not be put in place while negotiations are ongoing.
Trump and Juncker also added that they wish to resolve the issue of steel and aluminium tariffs imposed by the US, the move that sparked this particular trade dispute.
The pair also stated that trade barriers would be reduced; that the WTO would be reformed and that the EU would purchase more soya beans and purchase more liquified natural gas than before. Yet these are moves are nothing more than a plaster to cover up the damage that Trump’s other tariff war with China has already caused. At this moment, he’s simply juggling.
In a statement, Goldman Sachs warned that "The lack of specifics in [the] U.S.-EU announcement raises the possibility that the negotiations could falter at a later stage, as U.S.-China negotiations did earlier this year."
The message from the bank was clear: Take this development with a pinch of salt. Trump’s tariff trebuchet is still locked, loaded and ready to fire at the first available opportunity.
In the electronics sector, we know first-hand just how detrimental the 45th President’s approach to trade and his willingness for escalation can be.
Trump still has many outstanding grievances when it comes to global trade. He might be lowering his drawbridge ever so slightly in the direction of the EU. But with China, Mexico and other nations and partnerships that have drawn his ire, the gatehouse remains firmly shut. And so, for
19 July 2018
Trade Tariffs: Trump's Great Wall
First came the Great Wall of China. Built over 2,000 years ago, the fortification was designed to provide protection against raiding nomadic tribes. As time went on, the Great Wall became a barrier where duty and taxes could be levied on the goods and merchants
Fast forward to today and Donald Trump is building his own “Great Wall”. Though the 45th President’s blockade is not made of bricks and mortar. Trump’s latest wall doesn’t physically exist; it’s not visible to the human eye. But it’s something we’re all feeling the effects of. It’s a blockade, designed to slow trade and tax imports at the expense of others.
Our industry has been particularly hit. The recent round of tariffs has massively affected the supply of electronic components and forced
Isolationism is front and
There’s no denying that managing the world’s biggest economy is a tough gig. But there’s also no hiding from the fact that America, in a trading sense, is becoming a gated community.
At a time when the European Union has just announced one of the biggest free trade agreements in history, the Trump administration has just imposed an extra 25% tariff on hundreds of commonly imported goods from China. Further sanctions are expected to follow.
The EU too has felt his wrath. After slapping tariffs on steel and sparking a tit-for-tat round of sanctions, he’s set his sights firmly on the European automotive industry.
In his actions and statement, the current U.S. President talks about dealing with perceived deficits and asserting his (nation’s?) authority. Friend and foe are targeted with the same aggression. Trading partners go to bed every night, wondering if they’ll wake up to discover that new sanctions have been announced on Twitter overnight.
Instead of trying to find a workable solution, he shouts the loudest and attempts to lock America away. It’s either his way or the highway, no matter how attractive the other destination may be.
In his own indelible way, Trump is copying what civilizations have done for centuries. When presented with a complex issue, such as trade, he builds barriers.
Yet as he’s peeping out of the watchtower and using social media as his loudspeaker of choice, manufacturers are looking for ways to dodge the hawkish spotlights.
As a global distributor, it’s our job to help our customers find the best way to around the wall.
Enter Electronic Component part number below.