Supply Chain & Logistics News February 16th- 20th

The U.S. is implementing new tariffs on key imports, including lumber, cars, semiconductors, and pharmaceuticals, as part of its broader trade strategy, while also shifting its approach to combating bird flu through vaccinations and enhanced biosecurity. Meanwhile, the European Commission has approved a €920 million state aid package to boost semiconductor production in Dresden, aligning with its goal of technological self-sufficiency. In corporate developments, Honeywell plans to spin off its Automation and Aerospace divisions to create three independent companies, enhancing strategic focus. Additionally, U.S. investment in biogas projects surged by 40% in 2024, driven by favorable policies promoting renewable natural gas.

Here is This week’s News:

The U.S. Adds New Imposed Tariffs on Lumber, Cars, Semiconductors, and Pharmaceuticals 

U.S. President Donald Trump announced plans to impose new tariffs on various goods, including lumber, cars, semiconductors, and pharmaceuticals, with a 25% tariff on lumber expected to take effect around April 2. These tariffs aim to generate significant revenue for the U.S. and encourage other countries to lower their tariffs on American goods. Since returning to office, Trump has already imposed additional tariffs on imports from China and announced plans for reciprocal tariffs on countries with tariffs on U.S. goods. Economists warn that these sweeping tariffs could lead to increased inflation.

New Strategies are Immenient to Fight Bird Flu 

As the average price of eggs in the United States approaches $5 a dozen, the US government is planning a new strategy to combat bird flu. The new administration is going to focus on vaccinations and tighter biosecurity measures instead of the current practice of culling millions of chickens. This shift aims to address the soaring egg prices caused by the mass destruction of infected flocks. The administration is working with experts to develop a plan that includes a “better, smarter perimeter” around poultry farms. However, the poultry industry is concerned about the impact on export markets and the logistical challenges of vaccinating many birds. The USDA is expected to provide more details soon. The Egg Clearinghouse or ECI is the “Wall Street of Eggs” serving around 5% of the market. Last year they traded over 2.6 billion shell eggs, and are facing unprecedented demand with more bids than supply. 

The European Commission Makes Invest in Semiconductor Manufacturing Plant 

The European Commission has approved a €920 million state aid package for Infineon to build a semiconductor manufacturing plant in Dresden as part of the MEGAFAB-DD project. This facility, expected to reach full capacity by 2031, will enhance Europe’s chip production capabilities, supporting industrial, automotive, and consumer applications. The investment aligns with the EU’s goal of boosting semiconductor self-sufficiency under the European Chips Act, which has earmarked €15 billion for public and private projects by 2030. Infineon, investing a total of €3.5 billion, has committed to strengthening the EU semiconductor value chain, advancing chip R&D, and prioritizing supply in times of crisis.

Honeywell Announces Intent to Separate Automation and Aerospace, Enabling the Creation of Three Industry-leading Companies

Honeywell announced plans to separate its Automation and Aerospace businesses into independent, publicly traded companies, alongside the previously announced spinoff of its Advanced Materials division. This strategic move, expected to be completed tax-free for shareholders in the second half of 2026, aims to create three focused industry leaders. Honeywell Automation will lead in industrial automation and AI-driven solutions, Honeywell Aerospace will continue innovating in aviation technology, and Advanced Materials will specialize in sustainability-focused specialty chemicals. The separation is intended to enhance strategic focus, financial flexibility, and shareholder value, aligning with Honeywell’s broader portfolio optimization and investment strategy.

US Investment in Biogas Projects Grew by 40% in 2024 

Investment in U.S. biogas projects grew by 40% year over year in 2024, with a 17% increase in new facilities, bringing the total to nearly 2,500, according to the American Biogas Council. While wastewater treatment plants remain the largest sector, agriculture-based digesters saw the most growth, expanding by 24%. Favorable policies, such as the Renewable Fuel Standard and state clean fuel programs, have driven a shift toward producing renewable natural gas (RNG), with 95% of new projects focused on RNG rather than electricity generation. Despite challenges like permitting delays in the landfill sector, industry leaders see strong potential for further expansion, with ABC estimating over 15,000 additional viable biogas sites in the U.S. The council continues to advocate for supportive policies, particularly tax credits and fuel regulations that do not favor electrification over natural gas-fueled vehicles. 

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