Hello dear readers!

Welcome back to The Supply Times! This issue, we’ve got the latest salvo in the US/China rivalry, a dive into what the recent Supreme Court ruling on affirmative action means for the workforce, as well as some great recommendations of what I’m reading, watching, listening to, and thinking about.

Green means go!

Industry Highlights: Another Blow in US vs. China

The rivalry between the US and China has become like a heavyweight boxing bout. Just when you think one fighter has the upper hand, the other comes back with a strong right hook.

As I’ve previously mentioned, the US is doing everything it can to inch away from its reliance on China for goods—especially tech components like microchips and batteries—and while some reports have demonstrated it’s made some headway, China isn’t going down without a fight.

The Wall Street Journal reported last week that China is clamping down on exports of about two dozen minerals, including gallium and germanium. The restrictions will go into effect August 1.

The move is seen as a retaliation against recent the Biden administration considering rules against exporting AI chips from US manufacturers like Nvidia amid concerns the country could use them to power weapons systems.

On the surface, China’s export restrictions don’t seem like much of a problem. Who cares about gallium anyway?

Anyone interested in manufacturing microchips or batteries certainly does. The raw materials are used to build microchips, batteries, solar panels—just about anything required to advance technology.

The bad news? China’s got a really big piece of the natural resources pie. Financial Times reported that it accounts for about 60 percent of the world’s lithium production—the most critical component of the lithium-ion batteries that power EVs, computers, and myriad other products.

It also doubled its investment in mineral extraction and refining in the last year, as compared to a 25 percent increase by companies like BHP, Anglo American, and Glencore.

Yes, it’s possible to source natural materials elsewhere, but the infrastructure doesn’t exist the way it does in China. Unlike the state-supported mining industry in China, Western companies will be forced to go it alone, battling price volatility, high interest rates, and securing permission to mine previously untapped mineral deposits.

Though this battle is often draped with concerns about national security and defense, there’s also a significant concern from businesses about how it hinders their abilities to go green. The Biden administration’s climate legislation last year places a good deal of onus on companies to reduce their environmental impact, but without the raw materials needed to do so, they can’t.

As The Economist recently pointed out, Electric Vehicle sales have skyrocketed over the last two years, and tens of millions of lithium batteries will be needed in order to meet the US’s ambitious goal of ensuring 50 percent of all vehicles sold by 2030 will be electric.

Essentially, it’s wonderful that the US has decided to bake their own cookies instead of buying them from China, but it forgot that China ALSO owns the chocolate chips. Big things will have to happen in order for that to change.

The Future of Work: Affirmative Action Jackson

The Supreme Court decision that struck down racial preference in the college admission process will fundamentally change the way higher education institutions select their students, but it also has the potential to significantly impact the workplace as well.

The first way is more explicit. While Students For Fair Admissions v. Harvard was specifically about college admissions, the Court ruled ALL discrimination practices are unconstitutional, meaning the way some companies approach diversity, equity, and inclusion (DEI) hiring would be considered illegal.

The Wall Street Journal reported that Attorneys General in 13 states wrote a letter to all Fortune 100 companies warning them to realign their hiring practices to the new ruling.

That’s going to require a monumental shift in hiring policy for many major companies. Most large corporations have some sort of DEI provisions, including Apple, Facebook, Google, Netflix, and Uber. Back in 2020, Adidas publicly pledged to fill 30% of new positions with Black and Latino workers, and Target has previously made similar promises.

The other way the ruling will impact workforces is a passive result of how it affects higher education. Since race can no longer be a factor in the admissions process, companies expect their future candidate pools to be more homogeneous. Numerous studies (like this one) have concluded that diverse workforces improve productivity and worker satisfaction—but if the pipeline of qualified candidates isn’t diverse, companies will have fewer opportunities to diversify.

As a result, it will be up to the HR professionals to sort out how to keep everyone happy. Opinions about diversity in the workplace vary depending on race and political affiliation. Some feel attention to DEI is not progressing fast enough, while others accuse companies of—as Clayton HR vice president Sarah Sharp told The Wall Street Journal—being “too woke.”

Then again, a recent Pew Research study found about 40 percent of those surveyed placed little to no importance on racial diversity in the workplace.

In essence, SCOTUS laid down the gauntlet that it is essential to refrain from discrimination based on race. Racial quotas, regardless of their intentions, still constitute discriminatory practices. If C-Suites fail to acknowledge this, they’ll find themselves facing legal peril. And if some companies deem themselves too big to bother with this, just remember that the most famous Ivy League school now has to think otherwise.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About Re: Supply Chain, Work, and Beyond

📕 Read - From Strength to Strength by Arthur Brooks

I’ve always been fascinated by intergenerational workforces, and there’s been a lot of talk lately in HR circles about how to utilize and engage older workers. That got me thinking about a book I read recently by Arthur Brooks called From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life. In the book, Brooks describes his seven-year journey to discover how to transform his future from one of disappointment over waning abilities into an opportunity for progress. This practical guide to getting the most out of your second act isn’t something that’s totally applicable to my life yet, but it will be in the not-so distant future.

What Else I’m Reading:

• “How Allbirds Lost Its Way” – The Wall Street Journal – When it started, the Allbirds shoe brand had altruistic motives of creating a cool, eco-friendly product. But once the hype from Silicon Valley tech bros cooled, the company discovered customers don’t want environmental sustainability as much as they thought.

• “The Last, Unfulfilled Dream of Jamie Dimon, King of Wall Street – The Economist – A fantastic interview of the legendary JPMorgan Chase boss Jamie Dimon about his thoughts on the pending recession, the US’s relationship with China, and what’s next for him.

• “Senators introduce bipartisan ban on stock ownership for executive and legislative branch office holders and their families” – CNN – About time this is being addressed in our Congress. Not to mention it’s a small miracle whenever there’s any bipartisan legislation that is proposed. Let’s hope it passes, too.

📺 Watch - Working: What We Do All Day

Work is something an overwhelming majority of us have in common, and yet our individual experiences with work could not be any more different. In the new Netflix limited series, former President Obama visits American workplaces to explore what work looks like through those different eyes. An interesting take on what constitutes a “good” job, from the perspective of lower income, professional-level, and executives in the workforce. So is the multi-year deal worth an untold tens of millions of dollars that was inked between the Obamas and Netflix finally coming to fruition for the streaming juggernaut? Time will tell.

👂 Listen - Working It Podcast

Financial Times podcast host Isabel Berwick is such a treat, and this recent episode on small talk and schmoozing is no exception. In it, Berwick interviews Stanford University professor and communication expert Matt Abrahams about the strange mix of cringe and connection that networking can offer.

Bonus: Growing up, listening to Howard Stern was always an adventure. Love him or hate him, you’ve got to admit he’s a master interviewer. I don’t get a chance to listen to Stern as much anymore, but I did catch the interview he did with Bruce Springsteen recently and was not disappointed. Check it out if you want to hear two maestros of their field have a candid discussion that includes the Boss singing quite a few tunes in there too! Stern claims that Springsteen actually made him cry, the first time ever that has happened to King of All Media while on the job. It’s a long listen but well worth the investment.

💡 Think - The Dog Days of Summer

The scorching heat wave in Phoenix, Arizona is breaking records like a boss, leaving everyone awestruck. As someone who's endured blistering summers in Lahore, I can't fathom the relentless 110°F days that Phoenix is dishing out. Thankfully, the city's robust electric grid offers a glimmer of hope, shielding it from a Hurricane Katrina-sized catastrophe.

Of course, this heatwave isn't an isolated incident. Across the globe, urban areas from Europe to Asia grapple with similar challenges. While developed nations can implement countermeasures to alleviate the impact, the less developed regions face heightened vulnerability due to inadequate planning and limited resources in coping with this oppressive heat. Here's to a summer of staying cool and chill!

Charts of the Week

Quotes of the Week

Tweets of the Week

Finally...

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you’re interested in seeing me address, shoot me an email at [email protected]!

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Happy reading this weekend!

-- Naseem