Sign up: With one click, get this newsletter delivered to your inbox.
Continue Reading Below
Critics of the U.S. trade deficit may be big winners once Congress passes its tax bill - on paper at least. The legislation sharply reduces corporate taxes, among other changes to the code, which lawmakers are expected to approve this week. That gives multinational companies less of an incentive to stash profits overseas, a shift that could cut the trade deficit in half, the WSJ's Greg Ip reports. Any investment by these global corporations, however, is more likely to be made in their accounting departments than in new U.S. factories. For instance, a smartphone maker that manufactures devices in China and sells them in Europe would today claim the sale for an Irish subsidiary, taking advantage of that country's lower tax rate. Next year, that same device might be treated as a U.S. export, without any changes to the supply chain that produced and distributed it. Even so, some experts say repatriating profits could boost U.S. growth and slash the trade deficit, potentially undermining the Trump administration's drive for protectionism.
The auto industry is still dominated by firms founded over a century ago. A crop of Chinese startups - backed by billions of dollars in venture capital - are betting they can change that. Companies like NIO and Byton want to leapfrog incumbents with electric, driverless cars packed with the latest networking technologies, the WSJ's Trefor Moss writes. They're following the lead of Tesla Inc., which pioneered the concept of mass-produced electric cars, an idea now being emulated by the likes of Ford Motor Co. and Volkswagen AG. NIO launched production of its first car, a sport-utility vehicle, last week. But they have a long way to go to claim their place alongside General Motors Co. For one, even a technology edge is still no match for traditional auto makers' finely calibrated global supply chains, which allow them to reliably produce vehicles in enormous quantities that sell for far lower prices than startups can match.
Greece and olive oil go hand and hand in the minds of many foodies - but a messy supply chain is keeping the cooking liquid off supermarket shelves. Only 27% of Greek olive oil is sold abroad as a branded product, as opposed to in bulk, compared with 80% of Italian olive oil, the WSJ's Nektaria Stamouli writes, depriving cash-strapped Greece of nearly $300 million a year in export revenue. An inefficient supply chain explains the gap, starting with production split among tiny family farms and mills that lack the money or branding skills to break into the premium market. Banks are reluctant to issue loans in the wake of the country's financial crisis, and bureaucracy gums up routine health and safety approvals needed for export. It's a self-perpetuating cycle. An oil-mill owner receiving 10 or 20 euro cents per liter in the bulk market can't come up with the resources to hire expert staff and specialized machinery they need to upgrade. That's not a problem faced by rival growers across the Ionian sea in Italy, where a liter of premium-brand olive oil can sell for 40 times as much.
The search is on for the next banana with mass appeal. A fungal disease threatens the Cavendish variety that dominates global sales of the fruit today, kicking off a quest by researchers and fruit producers to find a replacement, the WSJ's Lucy Craymer writes. The hunters have catalogued thousands of wild and locally cultivated varieties, but none that mimics the Cavendish's flavor and texture - or its ability to survive the long journey from the plantation to the supermarket. The banana-destroying fungus is an example of how failing to cultivate a diversified supply chain can lead to disaster, much like how a smartphone manufacturer can be thrown into disarray if a typhoon cripples production at the sole factory producing an important part. Unlike in the technology sector, replacing the Cavendish won't be as simple as opening a new factory.
Continue Reading Below
IN OTHER NEWS
Multiple fatalities were reported after an Amtrak passenger train derailed onto an interstate highway in Washington state. (WSJ)
China's HNA Group Co. is looking to sell $6 billion in commercial proprerties. (WSJ)
Airlines struggled to return to normal schedules after a power outage at Atlanta's airport. (WSJ)
Campbell Soup will buy Snyder's Lance Inc. and Hershey Co. is acquiring Amplify Snack Brands Inc., as large food companies look to revive growth. (WSJ)
Greenyard NV is exploring an acquisition of Dole Foods Co. (Reuters)
A french regulator is seeking a record 10-million-euro fine against Amazon.com Inc., alleging the retailer's contracts with suppliers are one-sided. (Engadget)
U.S. West Coast ports are growing at a slower rate than Canadian and East Coast rivals. (The Loadstar)
Mediterranean Shipping Co. will upgrade 11 of its container ships for increased capacity. (Splash 24/7)
Containers are waiting up to 72 hours to be loaded onto barges at the ports of Antwerp and Rotterdam. (Lloyd's Loading List)
The Federal Railroad Administration approved high-speed passenger-rail projects in Florida and Texas. (Progressive Railroading)
Brian Baskin is editor of WSJ Logistics Report. Follow him at @brianjbaskin , and follow the entire WSJ Logistics Report team: @PaulPage , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Brian Baskin at firstname.lastname@example.org
(END) Dow Jones Newswires
December 19, 2017 07:08 ET (12:08 GMT)