What We're Watching Today is 1,323 words and an 8-minute read.
Global: Strike at US ports risks impact on global supply chains
A massive dockworker strike at US East and Gulf coasts seaports is expected to wreak havoc on global supply chains and the US economy.
Our Take: The dispute over wages and automation with dockworkers has been brewing for months, with the September 30 deadline passing without an agreement. Thirty-six US seaports are directly impacted, while the global shipping industry will face significant backlogs and delays that compound the longer the strike continues. International shippers anticipated the shutdown, accelerating holiday imports and reoriented some cargoes to West coast seaports. However, a lengthy labor dispute will impact global shipping, including US exporters who depend on the impacted ports to access global markets. Analysts are focusing on a one-week period as the breaking point for managing the impact of disruptions. The International Longshoreman's Association is demanding a 77% wage increase over six years as a condition to sit down for talks. This huge increase reflects the impact of wage erosion on dockworkers, as inflation has eaten away at their disposable income, and advances in automation threatening future job security, as robots and AI-trained systems risk replacing labor-intensive jobs. The US is lagging behind other major economies in port automation, due to complex challenges of politics, investment incentives and security.
Read More: CNBC, Wall Street Journal [paywall], New York Times [paywall]
Europe: Trial of National Rally leader risks party's standing amid embezzlement charges
French National Rally leader Marine Le Pen and other party members are on trial on Monday on charges of misusing European funds.
Our Take: This is a high stakes trial for Le Pen, her party and the future of France. Le Pen is accused of embezzling European Parliament funds by misappropriating them to party members working on party matters, rather than European Union affairs, in violation of EU rules. If found guilty, Le Pen faces a maximum sentence of 10 years in prison, a ban on running for public office for five years, and the party's rising popularity among voters could be dampened by the scandal. It could also open a pathway for her popular lieutenant, Jordan Bardella, to move to the front, giving the party to move beyond legacy challenges associated with the far-right party founder Jean-Marie Le Pen (Marine's father), setting the National Rally up for a real chance to win at the 2027 presidential election. Frances turn to the right risks strengthening a political reorientation of Europe towards policies of harder borders impacting trade and labor markets, nationalist economic policies and more transactional foreign policy.
Read More: Wall Street Journal [paywall], Reuters, Politico
Middle East: Israeli ground invasion of Lebanon prompts massive Iranian missile attack
Iran launched a major air attack on Israel, firing nearly 200 missiles that reportedly resulted in no casualties, barely a day after Israel began its long-threatened ground invasion of Lebanon.
Our Take: The launching of Israel's ground invasion and Iran's major retaliation mark the start of the long-awaited tip into full-scale war on Israel's northern border, and the significant escalation of Israel's regional conflict with Iranian-backed proxies. The region now is at a precarious moment, with Hizballah out of sorts (but potentially galvanized by Israel's invasion), Iran incensed (although unlikely to step in directly in Lebanon), and the ball in Israel's court for potential retaliation. Neither side is likely to concede to a ceasefire in the coming days, with Israel sure of its ability to decisively push Hizballah from the southern border (if only via attrition), and Hizballah facing significant changes to its role within Lebanon in the case of a defeat.
Read More: New York Times [paywall], Washington Post [paywall], Carnegie Endowment for International Peace, Atlantic Council
Americas: Sheinbaum inaugurated in Mexico
Claudia Sheinbaum took office as president of Mexico, the first woman and Jewish person to hold the office. Sheinbaum is a protégée of former President Obrador and comes into office already facing controversy over some of his lame duck policies.
Our Take: Sheinbaum was closely aligned with former President Obrador, and had defended many of his internationally controversial policies – prominently including the judicial reform that makes all federal judges popularly elected. Sheinbaum will face challenges including reassuring foreign partners that the country remains a friendly environment for foreign investment, curbing rampant cartel violence, improving the country's infrastructure to compete in near-shoring efforts, and addressing a massive regional immigration wave. There are also behind-the-scenes concerns that former President Obrador may consider influencing the executive, or that Sheinbaum may struggle to control the increasingly fractious Morena party.
Read More: New York Times [paywall], Atlantic Council
Asia-Pacific: Cambodia arrests prominent journalist for exposing trafficking and scam centers
Cambodian authorities on Tuesday charged Mech Dara, an award-winning journalist known for exposing human trafficking in online scam compounds, with inciting social chaos, a charge that carries a maximum jail term of two years.
Our Take: The arrest and charging of Mech Dara in Cambodia indicates an escalating crackdown on dissent and independent media, particularly targeting those exposing state-linked criminal enterprises. His detention, following his work covering human trafficking in scam compounds and criticism of powerful figures like tycoon Ly Yong Phat, who was recently sanctioned by the US, further highlights the already precarious conditions surrounding press freedom in the country. The Cambodian government's recent actions could cause it to become further isolated internationally and deepen concerns over human rights abuses, increasing political and reputational risks for businesses and foreign governments engaged with the regime.
Read More: New York Times [paywall], Taipei Times, Radio Free Asia
Trade & Compliance: US reveals preliminary duties on Southeast Asian solar imports
The US Commerce Department on Tuesday announced anti-subsidy countervailing duties on solar cell imports from firms based in Cambodia, Malaysia, Thailand, and Vietnam.
Our Take: While the Commerce Department's preliminary decision to impose on duties on solar imports from these Southeast Asian countries aims to address concerns over foreign subsidies that could be making US products less competitive, it risks incurring higher costs for solar projects in the US. The move supports US solar manufacturers by protecting domestic investments, though it may adversely impact developers who rely on lower-cost imports for renewable energy projects. The final determination is expected next year, and its outcome serves to potentially reshape the broader solar supply chain and energy market.
Read More: Reuters, Bloomberg [paywall], International Trade Administration
Disruptive Technology: Online scams are duping a fifth of US adults
Axios on Tuesday featured a new Consumer Reports survey, which found that one in five American adults who have encountered an online scam ended up getting tricked and losing money.
Our Take: The 2024 Consumer Cyber Readiness Report outlines how increasing digital fraud efforts highlight a concerning trend, as nearly half of American adults have encountered online scams. These scams disproportionately impact Black and Hispanic Americans, who are statistically more likely to suffer financial losses. The rise of AI tools further aggravates this issue by making scams harder to detect, increasing the threat to consumers and businesses. As such digital threats become more sophisticated, collaborative efforts between business, policymakers, and consumers can serve to address vulnerabilities and enhance cybersecurity defenses.
Read More: Axios, Consumer Reports
Energy Transition: UK closes last coal plant in major milestone in energy transition
Uniper CEO Michael Lewis announced that the last coal plant in the UK has closed, marking a major milestone in the country's energy transition.
Our Take: The UK is the first G7 country to remove coal-power generation from its energy mix, a vanguard for major economies. Coal-powered generates 2.7% of French electricity, 16% of US electricity, 28% of Japanese electricity. If the world is to limit global warming to 1.5 degrees C (2.7 degrees F), the International Energy Agency assesses that reducing unabated coal generation is a critical component, but extremely challenging given growing energy demand and industrial processes requiring coal's carbon content, such as iron and steel.
Read More: Reuters, World Resources Institute, International Energy Agency
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.