Reuters World News - China’s Red Sea headache, Yemen's social media 'pirate' and US third parties

Episode Date: January 19, 2024

Red Sea shipping attacks by Yemen’s Houthi militia are putting China's exporters under pressure. A self-proclaimed Yemeni pirate has taken social media by storm. Why Democrats are worried about third parties. Plus, Congress clears a stopgap spending bill to avert a government shutdown. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today. Why the crisis in the Red Sea could prove fatal for some Chinese factories. A self-proclaimed Yemeni pirate stormed social media. US voters looking for third-party options this November face an uphill battle from the established parties. And Congress clears a stopgap spending bill to avert to government shutdown. It's Friday, January 19th. This is Reuters World News, bringing you everything you need to know from the front of lines in 10 minutes every weekday. I'm Kim Vinal in Wanganui, New Zealand. And I'm Tara Oaks in Liverpool. Attacks by Houthi militants in the Red Sea are continuing despite US airstrikes. On Thursday,

the Iran-backed group fired missiles at an American-owned commercial vessel. The crisis in the busy shipping route is disrupting world trade, but is having a particularly harsh impact on Chinese exporters. Casey Hall is in Beijing. Casey, why is this such a big problem specifically for China? There's a couple of reasons, one of which is that Chinese exporters are one of the main groups of people getting stuff through the Red Sea. Obviously, as a manufacturing base, a lot of stuff comes from China to Europe. I think for the EU, China is the number one exporter.

So it's the sheer amount of goods coming from China as an issue. There is also an issue for Chinese manufacturers and exporters that they've just really come out of COVID and the bullwhip effect of post-COVID where there was an awful lot of over-ordering and then a lot of orders cancelled as retailers tried to normalise after that. So a lot of these manufacturers have already struggled. Some of them have already gone under. Some of them are hanging on by a thread and it's those guys who are really going to be impacted by these disruptions. How are companies that rely on these exports responding? I have heard reports of some companies like shifting more production to factories in Turkey, for example. There was another person we spoke to

who posited that this could be positive for India because India is one week closer by ship to Europe. So even though it is also impacted by Red Sea disruptions, it is one week less impacted each way. What is the longer term consequence likely to be? So this is really key is that this is really only just starting. So we don't know what the consequences are. But the longer it goes on the more serious consequences we can foresee. So, for example, right now, ships are disrupted going to Europe. Ships are then disrupted coming back from Europe and they're coming back with less containers, which means there's a container shortage already.

That means that stuff that should have been sent out before Chinese New Year, a lot of it won't get sent out. That means that then factories are closed for anywhere from two to four weeks traditionally for the Lunar New Year. And then retailers in Europe could begin at that point to just, cancel orders. And so when these factories come back from Chinese New Year, they don't have the orders they're expecting. They have to absorb that cost themselves. And especially for the sub-supplies, especially for the small suppliers, that hit could be a fatal hit for them.

There are factories that are probably going to close because of this. While Yemen's Houthis take on world powers on the high seas, a self-reclamed Yemeni pirate is grabbing the social media spotlight with his Hollywood good looks. 19-year-old Rashad al-Hadad's videos have been watched and shared by thousands over the last week, with some dubbing him Tim Houthi Shalameh due to a perceived resemblance to the actor. His posts include several selfies taken on a cargo ship seized by Houthi commandos in November, which was turned into a tourist attraction. Haddad says he's thankful for his popularity,

primarily to explain to Westerners why the Houthis have attacked Redhese's have attacked Redd sea ships. The Houthis say their attacks are in solidarity with Palestinians under attack from Israel in Gaza. The United States and other Western countries said the Houthis actions in the Red Sea are illegal. The U.S. this week returned the group to a list of terrorist groups. As for Hdad's Legion of Social Media fans, he says he's not interested in his looks,

deving them just a gift from God. The U.S. Congress has avoided a government shutdown for now. Both chambers passed a continuing resolution Thursday that would extend spending at last year's levels through to early March. Disputes remain as the Senate and House try to pass a more complete spending bill, as the U.S. national debt reaches $34.4 trillion. The Justice Department has concluded that police failed the victims of the 2022 school shooting in Uvalde, Texas.

Law enforcement officials. U.S. Attorney General Merrick Garland, speaking in Uvalde. It meant waiting for a set of keys to open the classroom door, which the report concludes was likely unlocked anyway. And it meant that the victims remained trapped with a shooter for more than an hour. It was one of the deadliest school shootings in U.S. history. 19 students between 9 and 11 years old were killed. killed, along with two teachers.

Japan is hoping to become the fifth country to put a spacecraft on the moon. It will attempt a precision landing later today, trying to land within 100 metres of its target. It would be a huge boost for Japan's space program, which has been eclipsed by rival China. The annual meeting of a global elite at the World Economic Forum in Davos is drawing to a close. Leela de Krepsa is there in the snowy Alps. Lila, what are the big takeaways from Davos to see? Yeah. Well, I think number one, Tara, is obviously the geopolitical situation going on in the Middle East and also in Ukraine. We saw a big showing from Ukraine and Zelensky certainly was

drumming up support from financiers as well as his allies for the war. What actually came out of that support were yet to be seeing given what's going on in the US and the blocking of aid by the Republican Congress. We saw a lot of Middle East players here and we saw a lot of please for the war in Gaza to end, but not necessarily steps for how that may occur. A big question, obviously, is Palestinian statehood, and it's unclear how the governments of the world are going to proceed that way. But there has certainly been some high-level talks while we've been here. The other thing that dominated the conversation is obviously AI, it's the buzz of Darbos. What we had been hearing, though, and looking for were more concrete

examples of how companies are using it to actually make money, has it gone beyond the buzz? The global economic outlook has shifted once again, but what we were hearing from a lot of corporates was it's not really interest rates that have them worried as geopolitical risk, and a lot of them are getting ready for scenario planning that they once didn't have to do. As Republicans and Democrats brace for a repeat of Biden versus Trump in November, the appetite for a third-party option is growing. Worried a third-party candidate could pull voters from the president, one opposition research firm for the Democratic Party

is doing everything it can to take a potential spoiler out of the equation. Jarrett Renshaw is in Washington, D.C. So this group American Bridge is using its attorneys to really scrutinize the ballot applications from third-party groups, particularly no labels. No labels is the centrist party in the, In the U.S., they've done a lot of work on Capitol Hill, and what they're doing is getting on the ballot in as many states as possible, and with candidates to be determined.

In the U.S., getting on state ballots is a pretty challenging enterprise, expensive one that requires you to file a lot of technical rules. And this group, American Bridge, is making sure that they are following them, and if not, doing everything they can to keep them off state balance. There's a broader effort that includes not just American Bridge, but the other groups. groups. And what they're doing is meeting with potential donors and even potential candidates and essentially telling them one thing that supporting those labels is a proxies for supporting Donald Trump. Is there an appetite for more independent parties? Gallup just recently, it was a major

polling company in the U.S., recently said that the appetite for a third party has never been higher in the U.S. And that's largely due, I think, to the unpopularity of not only the two major parties, but the two candidates that are likely to represent them in the form of Donald Trump and Joe Biden. What did voters tell you? So I spoke to voters in Maryland and Wyoming, two very different states here in the U.S. Maryland be very left-leaning, Wyoming being very right-leaning. And voters were at different sides of the same quarter. Democratic-leading voters are interesting third parties, but don't want to sway the election to Trump and vice versa. Folks in Wyoming who are right-leaning are interested in third parties, but didn't want to sway the

election to Biden. So the key question, at least emerged from my conversation, is credibility is a key thing. If these voters think there's a real viable third-party option, I think they'll take it. If they think it's not, they're going to want to shop where their vote has the most impact. And speaking of voters, as Republicans in New Hampshire gear up to choose their nominee, our producer, Jonah Green, is heading there to bring you a special weekend episode to find out whether the state could throw Donald Trump a curveball. That episode is out on Sunday. That's it for today's episode of Reuters World News. Make sure you come back over the weekend, though. On Saturday, we have a special episode following the migrants bust out of Texas to find out

what happens after they leave. And on Sunday, we head to New Hampshire, where after Donald Trump's crushing victory in Iowa, Nikki Haley is hoping to turn things around. Then, of course, we'll be back on Monday with our regular daily news show. To make sure you know what's going on in the world, listen in for 10 minutes every weekday. And don't forget to subscribe on your favorite podcast player or download the Reuters app.