Good morning.

The U.S. is widening its crackdown on Chinese tech.

A bipartisan push led by Senators Tom Cotton and Chuck Schumer is moving to ban Chinese-made robots from government use, citing national security risks around data collection and remote control.

The proposed bill would restrict federal agencies from purchasing or operating these systems, extending earlier actions targeting routers and drones. The move comes as Chinese robotics firms like Agibot and Unitree scale globally, intensifying competition in humanoid and industrial automation.

Let’s dive into today’s edition.

Apple is expanding its American Manufacturing Program, adding four new partners to boost domestic production of key components and materials. The company plans to invest $400 million through 2030 as part of a broader $600 billion commitment to U.S. manufacturing and innovation.

New Partners: The new partnerships with Bosch, Cirrus Logic, TDK, and Qnity Electronics will support production of sensors, semiconductors, and advanced materials within the U.S., strengthening local supply chains for Apple products sold globally. The move also builds on existing collaborations with firms like GlobalFoundries and TSMC

Big Picture: Apple’s push comes amid rising geopolitical and trade pressures, with the company already absorbing billions in tariff-related costs. By localizing more of its supply chain, Apple aims to reduce reliance on overseas manufacturing while aligning with U.S. policy priorities

Elon Musk has announced plans for a $25 billion semiconductor manufacturing facility, dubbed “Terafab,” in Texas, aiming to accelerate chip production amid surging AI demand. The project is a joint effort between Tesla, SpaceX, and xAI.

The Reason: The proposed plant could become the world’s largest chip manufacturing facility, designed to produce billions of chips using advanced 2-nanometer processes. Musk said the move is driven by supply constraints, as existing partners like Samsung and TSMC struggle to meet growing demand.

Key Details: Terafab is expected to produce chips such as AI5 and AI6 for robotics and autonomous vehicles, as well as D3 chips for satellite applications. The initiative aligns with broader industry trends, as companies like Nvidia also push into AI infrastructure and advanced computing systems.

China has sharply increased detentions of Panama-flagged vessels, in what U.S. regulators say may be retaliation tied to a growing dispute over control of key Panama Canal ports.

Increased Inspection: The Federal Maritime Commission, in a statement, said inspections have surged far beyond normal levels, with nearly 70 vessels detained since early March. The agency added that the actions appear to be driven by informal directives and may be intended to punish Panama following its port decision.

U.S. officials warned the impact could be significant, as Panama-flagged ships carry a meaningful share of U.S. containerized trade. The FMC said it is monitoring the situation closely and has the authority to investigate whether such actions are harming U.S. shipping and commercial interests.

COSCO Shipping has resumed cargo bookings to key Middle Eastern destinations, becoming the first major carrier to cautiously re-enter routes linked to the Strait of Hormuz since the Iran conflict disrupted global shipping flows.

Risky Bookings: The move allows shipments from the Far East to markets including the UAE, Saudi Arabia, and Qatar, though the company warned conditions remain volatile. Major carriers such as Maersk and Hapag-Lloyd had previously suspended operations amid escalating security risks in the region.

Current Status: More than 3,200 vessels remain stranded in the Persian Gulf, while at least 18 ships have faced attacks since early March. The Strait of Hormuz, which handles roughly 20% of global oil and gas flows, has effectively become a high-risk corridor for global trade.

Cautious Moves: Iran has indicated that “non-hostile” vessels may transit the strait if coordinated with its authorities, with reports suggesting informal transit fees could reach up to $2 million. While some Chinese-linked vessels have successfully crossed, the broader industry remains cautious

The effective closure of the Strait of Hormuz is beginning to ripple beyond energy markets, raising concerns over aluminum supply for Japan, which sources roughly 20% of its imports from the Middle East. The region remains a key global production hub due to its access to low-cost energy.

What’s Happening: Aluminum is used across a wide range of products in Japan, from drink cans to bullet trains, making it a critical industrial material. With domestic aluminum production phased out, Japan is fully import-dependent, sourcing around 20% from the Middle East, including 13% from the UAE.

Supply Shock: For now, inventories are cushioning the shock. Japan holds about two to three months of supply, with additional shipments already en route. Larger manufacturers are diversifying their sourcing to countries such as Australia and Indonesia, but smaller firms remain exposed due to limited flexibility.

U.S. truck freight volumes rose to a three-year high in February, with tonnage up 2.6% month-on-month and 2.1% year-on-year, marking the strongest growth since 2022. Year-to-date volumes are also up 1.4%, signaling a modest recovery after a prolonged freight downturn.

Big Concern: But the rebound is not demand-led. It’s being driven by shrinking capacity, as carriers exit the market, delay fleet expansion, and reduce supply—pushing up volumes and rates. At the same time, higher diesel costs are offsetting gains, keeping pressure on margins.

Uneven Demand: Underneath, freight demand remains uneven. Industrial and construction-linked freight—especially tied to AI data centers—is growing, while housing, furniture, and appliances remain weak

BHP Group expects the global potash market to tighten significantly, with demand growing 2–3% annually and outpacing supply. A structural deficit is now projected by 2035, signaling long-term pressure on fertilizer markets.

Short Supply: Supply expansion remains limited, with few major projects beyond BHP’s Jansen mine in Canada, which is set to begin production in 2027. At the same time, geopolitical disruptions—including the Middle East conflict—are adding strain to already fragile fertilizer supply chains.

Demand Centers: Demand is being driven by major agricultural economies, especially Brazil, which accounts for ~20% of global potash demand, alongside China, India, and Southeast Asia. The result: potash is emerging as a strategic commodity, with supply risks increasingly tied to global food security.

According to reports, Iran has begun charging transit fees of up to $2 million per voyage for some commercial vessels passing through the Strait of Hormuz, signaling a shift toward monetizing control of the critical shipping corridor.

What’s Happening? Iran is charging select vessels up to $2 million per voyage to transit the Strait of Hormuz. Some ships have already paid, though the process remains opaque and negotiated quietly on a case-by-case basis. Reports state that Iran is planning to formalize the charges.

Breach of Law: The Gulf Cooperation Council has condemned Iran’s transit fees in the Strait of Hormuz as illegal, with Secretary-General Jasem Mohamed Al-Budaiwi calling it a breach of international law governing freedom of navigation.

U.S. import prices posted their sharpest monthly increase in four years in February, rising 1.3%, according to the U.S. Bureau of Labor Statistics. The surge was driven largely by higher energy costs, reflecting tightening global supply conditions and rising fuel prices ahead of the Iran conflict.

Key Details: Core import prices rose 3.0% year-on-year, while capital goods recorded their strongest gains on record, signaling that inflation is now spreading beyond energy into manufacturing and industrial inputs. A weaker dollar has further amplified the cost of imported goods.

What’s Next? The data suggests inflationary pressures are becoming more entrenched across the economy. Rising input costs could feed into consumer prices in the coming months, complicating the outlook for businesses and policymakers alike.