Protectionism And Red Velvet Cake | The Knock-On Effect #1 | Real Vision™

TL;DR

The US trade crackdowns on countries like China could lead to changes in trade partnerships, impacting the availability of red dye used in red velvet cake.

Transcript

the US is cracking down on trade and that means your red velvet cake will become pink a trade crackdown means that my red velvet cake is gonna turn pink yes your red velvet cake will turn pink all right enjoy [Applause] this is the knock-on effect where we start with the thing you know and end up in a weird place I'm Justine Underhill and joining m... Read More

Key Insights

• ™️ US trade crackdowns can lead to countries seeking new trade partnerships, potentially impacting the availability of certain products.
• 😪 Peru's role as the primary exporter of natural red dye made from cochineal bugs can be affected by changing trade relationships.
• 😋 Increasing demand for Peruvian products may limit the supply of red dye for other countries, potentially affecting industries like food and cosmetics.
• 😪 Companies like Premier Foods are exploring alternative options to address the potential scarcity of red dye.
• 🌐 The interconnected nature of global trade can lead to unexpected knock-on effects, highlighting the complexity of the global economy.
• 🧠 The moral implications and market dynamics of trading assets like Bitcoin or freshly harvested baby brains are subjects of debate.

Questions & Answers

Q: How does the US trade crackdown impact trade partnerships between countries?

The US trade crackdowns could lead to countries seeking new trade partnerships, as they try to navigate the changing trade landscape. This could result in changes in the availability and sourcing of various products, including red dye used in red velvet cake.

Q: What is the significance of Peru's role in the production of natural red dye?

Peru is the primary exporter of natural red dye made from cochineal bugs. It has a 95 percent share of the international market and relies on thousands of farms for its production. The rising demand for Peruvian products could limit the supply of red dye for other countries.

Q: How does the trade relationship between India and Peru impact the availability of red dye?

Peru and India are currently negotiating a comprehensive trade deal, which could lead to increased exports of Peruvian products to India. As the demand for Peruvian goods grows, the availability of red dye for other countries, including the US, could be affected.

Q: How are companies like Premier Foods responding to the potential scarcity of red dye?

Premier Foods, the maker of Mr. Kipling cakes in the UK, has expressed a willingness to explore alternative options due to the possible scarcity and rising costs of natural red dye. However, finding a suitable alternative that provides a lasting color is proving to be challenging.

Summary & Key Takeaways

• The US is cracking down on trade, imposing tariffs on various products like solar panels, steel, and potentially Harley-Davidsons, which could lead to changes in trade partnerships.

• As countries seek new trade partnerships, China may turn to trading with Peru, impacting the availability of natural red dye used in various products, including red velvet cake.

• Peru is the primary exporter of natural red dye made from cochineal bugs, and as demand for Peruvian products increases, their exports to countries like China could limit the supply of red dye for other countries.