Supply Lines: No crystal ball

Supply Lines
Bloomberg

The deal removing tariffs on American lobster exports to the European Union last month might well give President Donald Trump bragging rights to the smallest U.S. trade deal in history. But don't tell that to Irish crystal maker Ronan Daly, who's hoping it'll be big for him.

"We are looking at this news as hope that we can weather this storm," Daly, co-owner of Kinsale Crystal, says of the $270 million pact announced Aug. 21, which also included a 50% cut in U.S. duties on certain crystal glassware. With his business down 84% this year, every little bit counts.

Ronan Daly. Credit: Kinsale Crystal

The pandemic has hit Daly and other Irish crystal merchants in a number of particularly painful ways. Travel restrictions cut off revenue from banned American tourists who drop by their high-street shops in towns like

Kinsale and Galway. Online spending took a hit from the economic hardships that curtailed spending on luxuries like fancy vases, while bans on big events like weddings crushed gift sales.

Ireland's production of fine crystal — glass made with lead oxide — dates back a few centuries and spawned a major employer and well-known global brand in the town of Waterford.

What's not mass-produced comes from a cottage industry trying to find its way with a younger generation that wants fine glassware to be minimalistic and dishwasher friendly. It's endured plenty of rough periods, from famine to the flight of skilled craftsmen to America. In recent years, glass-making shifted to countries including Slovenia and the Czech Republic.

The glass-cutting, though, is still done by the hands of people like George Duggan, of Cork Crystal, who says it's going to be hard to get through another eight months of this. "A year ago I was putting in 10-hour days," he says. "Now it's two."

Tony Abbate of Belfast Crystal weathered a major fire in 2017, but he managed to keep the business going and rebuild. "The crisis this year has been worse with orders constantly being cancelled from March onwards and to be honest I cannot see a proper upturn until 2021," he says.

Whether the U.S. tariff reduction proves much help in the industry's recovery is unknown at this stage, but the key seems to be a return of tourists from North America. "We'd have a serious problem in Ireland, in my opinion, if Americans are not allowed to fly in next year," says Brian Williams of family-run Heritage Irish Crystal in Waterford.

Oddly perhaps, Williams lacks a spherical ornament that might foretell how the industry will emerge from the current challenges. "If I had a crystal ball, I'd be able to tell you that," he says.

Brendan Murray in London

Charted Territory

Tensions between China and Taiwan have been increasing. China's military dwarfs that of Taiwan, but an amphibious invasion across the 100-mile-wide strait separating the two carries risks that could easily backfire on Beijing. Although many observers see the U.S. coming to Taiwan's aid if China were to launch an attack, President Tsai Ing-wen's government is actively taking steps to increase economic ties between Taiwan and the U.S. to provide more incentives for American policy makers to intervene.

Today's Must Reads

  • Positive feedback loop | The U.S.'s network for moving goods into and around the country is the busiest in years after being throttled by the pandemic, providing vital support for an economic rebound that's moderating in other areas. Meanwhile, the online home shopping boom in the U.S. has sent transpacific sea freight rates to the highest on record, helping the container shipping industry in Asia.
  • More talks | France said the European Union should keep pursuing a free-trade agreement with the U.K. while warning that any British violation of the Brexit agreement would end the push.
  • Tools of trade | Tariffs aren't the only weapon in a trade war. Countries are also turning to blacklists to restrict the economic activities of certain foreign companies. 
  • Changing gears | Negotiations for e-commerce and digital trade under an Africa-wide free-trade pact will be fast-tracked as the coronavirus pandemic heightens the need for a legal and governance framework, according to the zone's most senior official.
  • Crowded out | EU ministers failed to make good on their promise to sanction Belarusian officials involved in a contested election because of disagreements over how to deal with Turkey's energy claims in the eastern Mediterranean.
  • Move rejected | U.S. officials announced new sanctions against Iran and insisted that a raft of nuclear-related restrictions are back in force, part of a standoff with European allies that's spurring a crisis at the United Nations Security Council.
  • Plane sailing | While flight shaming and the coronavirus pandemic have spurred airlines to hasten the retirement of their oldest, fuel-guzzling aircraft, those planes don't all end up in boneyards in the desert. Many find a second life in the fleets of Amazon and other cargo carriers.

On the Bloomberg Terminal

  • Cartel claims | Tyson Foods, Pilgrim's Pride, and other top poultry processors were hit with a federal antitrust lawsuit in Kansas City, Kan., alleging an industrywide scheme to drive down compensation for the permanently indebted "modern-day sharecroppers" who raise chickens for them.
  • High-frequency data | The volume of goods arriving at U.S. ports in the four weeks through Sept. 10 is down 10% from January levels, showing a deeper drop in trade, Bloomberg Economics writes.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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