By donfiore @Adobe Stock

Paul Hannon and William Boston of The Wall Street Journal are reporting how Europe is again on the front line of the latest geopolitical tensions, a development that threatens to widen the economic gap between it and the United States. They write:

For the second time in three years, a conflict in Europe’s unruly neighborhood is threatening to weaken an already struggling economy while a more robust U.S. is watching from a safer distance.

This time, attacks by Houthi rebels in Yemen targeting cargo ships in the Red Sea have persuaded more carriers to opt for the safer but longer and more expensive journey around Africa via the Cape of Good Hope. […]

In addition to greater preparedness, the economic environment is also different from during the pandemic—a global event affecting supply chains around the world. The current crisis is local, leaving suppliers with more alternatives and many businesses now hold bigger inventories than they did before the pandemic struck. In Europe, weak consumer demand has padded this cushion.

“The Red Sea is not as dangerous to global trade as the events were a few years ago,” said Lepperhoff.

Read more here.