QUESTION 1

Any renewed US-China trade war will be perilous

BY CLYDE RUSSELL, ASIA COMMODITIES COLUMNIST AT REUTERS PUBLISHED: 7 MAY

2020 AT 04:00 NEWSPAPER SECTION: NEWS

The rhetoric around the possible resumption of the United States-China trade war has

been ramped up by both sides in recent days, but this time around the risks seem to be far

greater for both countries, with the world economy as collateral damage.

US President Donald Trump has intensified threats of new tariffs to punish China as he

seeks a winning issue for his campaign for re-election in November, just as Beijing tries to

deflect growing criticism over its handling of the global pandemic caused by the new

coronavirus.

Mr Trump said on May 1 that increasing tariffs on China is "certainly an option" as part

of retaliatory measures for what his administration believes was Beijing's failure to contain the

spread of the virus beyond its origins in the central city of Wuhan in December.

Mr Trump and his Secretary of State Mike Pompeo have gone as far as to suggest that

Beijing actually created the virus, although neither offered any evidence. Mr Pompeo managed

to contradict himself in the same television interview, saying he believed the coronavirus came

from a Chinese laboratory, but he also accepts the US intelligence agencies conclusion that it

was not man-made.

For its part, China, through its official Xinhua News Agency, has mocked the US

response to the coronavirus through a short Lego-like animation called "Once Upon a Virus."

China's ambassador to strong US ally Australia, Cheng Jingye, also threatened a boycott of

Australian goods after Canberra proposed an international investigation of the origins of the

virus and of China's early response.

While the exchange of threats and finger-pointing doesn't necessarily translate into

action, it does raise the risk that the trade truce between Washington and Beijing agreed in

January will unravel.

A further point to note is that so far, the deal struck in January is a dismal failure on

one of its major points, namely that Beijing would massively increase its purchases of US

energy in the form of crude oil, liquefied natural gas (LNG) and coal.The agreement called for

China's imports of U.S. energy to increase by US$52.4 billion over 2020 and 2021 from a

baseline of $9.1 billion in 2017.

DEARTH OF COMMODITY IMPORTS

China is not even remotely close to meeting this obligation, with no crude oil imported

in February, March and April, a mere two cargoes underway and due to arrive in May and a

further one booked to arrive in June, according to Refinitiv data.In LNG, three cargoes arrived

in April, the first since March 2019, and four are underway for arrival this month, but as yet

none have been booked for June.

One coal cargo was discharged in March, two vessels that arrived at Chinese ports in

April appear to still be waiting to unload and two ships are currently en route and expected to

arrive by the end of this month.

To put it perspective, at the current West Texas Intermediate of $21.79 (706 baht) a

barrel, China would get close to a billion barrels of crude for a $20 billion spend.

Spread over a year, it would mean China importing about 2.74 million barrels per day

(bpd) from the US -- more than a cargo every day -- or about 90% of total US exports last year.

Of course, this level of buying would no doubt boost the price of US crude, but that would

most likely make it uncompetitive against supplies from other producers.

Already, US crude will struggle against similar grades from countries such as Nigeria

and the United Arab Emirates, given the higher freight costs.

US LNG is also currently uncompetitive in Asia, as the spot price for cargoes delivered

to China set a fresh record low of $1.85 per million British thermal units (mmBtu), which is

cheaper than US natural gas futures, and that's before the cost of liquefaction and freight is

added.

It should be clear to Mr Trump and his administration that the trade deal agreed with

China is effectively dead, raising the question of what the US will act about it.

Under normal circumstances in the Trump administration, it would likely result in a

ramping up of the rhetoric followed by the imposition of new tariffs, just as Mr Trump has

threatened so far. But the coronavirus may alter the equation. When Mr Trump launched the

trade war in the middle of 2018, the US economy was strong and growing and China looked a

tad vulnerable.

The tables have now completely turned, with the US facing the worst downturn since

the Great Depression of the 1930s and China seemingly emerging from the coronavirus

battered but not too bad.

Can US businesses cope with paying even more tariffs, and how will Wall Street

equities react to a resumption of trade hostilities at a time of severe economic weakness?

Mr Trump will have to balance the likely fallout from a renewed trade war with the

potential benefit of having a ready-made enemy to blame for all his woes leading up to the

November vote. In the meantime, what does appear likely is that US commodity exports to

China will remain at subdued levels, as they struggle to compete and Beijing appears reluctant

to force their purchase. Reuters

Source: Bangkok Post

Amid the heat up of the US-China trade war, Asia could face both direct and indirect

impacts through China's supply chain and reducing global trade, should China and

global economies worsen. How could Asia circumvent US-China trade war?

QUESTION 2

please help me to design Logistics and Supply Chain Model using the following information:

Supply Chain Condition

1.Your Company is Exporter who want to deliver 5,000 kg of pineapple to India

2.Your Company is located in (Bangkok-Thailand)

3.Your "Possible" Supplier should be in (Bangkok-Thailand)

4.Please help me to calculate and show distance between

supplier - company -. (key player you want)- port -India

5.Packaging and Box for export

6.How to Export to India

(Transportation Modes and Destination Port)

and the reason why you selected this mode.

Thank you!