Business

Houthi squeeze on Red Sea shipping risks enormous cost to global economy on December 31, 2023 at 11:00 am Business News | The Hill

Published

2 years ago

December 31, 2023

The Houthi rebel group in Yemen has almost completely shut down a key shipping route in the Red Sea, costing the global economy and setting up a huge challenge for the White House.

The relentless Houthi attacks on merchant vessels and commercial boats pushed several of the world’s largest shipping companies to cancel transits through the Red Sea. Oil-producing giant BP also decided to avoid the shipping lane.

Now, merchant boats are forced to take the long way around, circling Africa and the Cape of Good Hope to reach their destinations.

Nick Childs, a senior fellow for naval forces and maritime security at the International Institute for Strategic Studies (IISS), said the Red Sea threat has the potential to damage the global economy in the long term, adding the conflict points to a more unstable world that must be addressed.

“Economies have to absorb the increased costs and that will have an impact, not just on the maritime industry, but [also on] economic health more generally,” he said. “There has to be more attention paid to maritime security and maritime domain awareness.”

“But there is another problem,” Childs continued. “Navies are a lot more busy doing other things as well, including worrying about Russia-Ukraine, worrying about what may or may not be happening in the Indo Pacific.”

The Red Sea is a major shipping lane route, facilitating roughly 10 percent of the world’s commerce each year.

Sailing through the Suez Canal and down the Red Sea and Gulf of Aden offers a shortcut connecting Europe to Asia and the Pacific region; it is used by about one-third of global shipping companies.

Rerouting all the way around Africa adds some 3,000 nautical miles and up to two weeks of travel, and shipping companies are now adding the extra costs as a transit disruption surcharge or a war risk surcharge, as referred to by Israeli shipping company ZIM.

“Diverting vessels around the Cape of Good Hope to mitigate the ongoing risks of sailing through the region is a necessary step in the interest of safety, but it has ultimately brought about increased costs for carriers,” said Danish shipping giant Maersk in an advisory.

The reroutes affect 17 percent of global shipping traffic, and cargo costs for carriers are expected to soar 15 to 20 percent, according to the American Journal of Transportation.

If the problem persists, the impact on the global economy will be measurable and could trickle down to the average consumer, said Alan Deardorff, a professor emeritus of public policy and economics at the University of Michigan.

Still, Deardorff added the greater cost will be on shipping companies and their suppliers.

“They’re going to be hurt by it, absolutely,” he said, but noted there would be a limit in how much that could trickle down. “The effect on average price and the effect on inflation might be measurable, but I don’t think it’s going to be something people will correctly notice.”

The Houthis, who are backed by Iran, say they are targeting Israel-based ships or vessels headed to Israel. They are attacking ships as they cross the strait of Bab el-Mandeb, connecting the Red Sea to the Gulf of Aden.

The Red Sea hostilities are part of a pattern of Middle East attacks from Iranian-backed groups against the U.S. and Israel in response to the Israel-Hamas war. With Israel vowing to continue fighting against Palestinian militant group Hamas until it is destroyed, the Middle East region is expected to remain unstable.

More than other Iranian-backed groups, the Houthis have carried out bold tactics, sending in a helicopter team to seize a commercial boat in November and damaging another ship earlier this month with rockets. They have often launched a barrage of drones and missiles to target ships and U.S. naval assets.

The U.S. announced a new task force last week involving several nations to deter the Houthis from carrying out the attacks and protect merchant ships. But the task force simply builds on an existing team under the multinational Combined Maritime Forces, which is already deployed to the Red Sea. And the Houthis have promised to continue the attacks.

“We will make American battleships, interests, and navigation the targets of our missiles, drones and military operations,” said Houthi leader Abdul-Malik al-Houthi in a late December speech shared on an Iranian resistance group Telegram page.

The Houthis have also taunted the U.S. for firing expensive missiles to counter cheap drones in the Red Sea.

Pentagon press secretary Maj. Gen. Pat Ryder told reporters last week that the task force, called Operation Prosperity Guardian, will serve as a “highway patrol” in the Red Sea that will pressure the Houthis.

“It’s a defensive coalition meant to reassure global shipping in mariners that the international community is there to help with safe passage,” he said. “The Houthis need to stop these attacks. They need to stop them now.”

“And they really need to ask themselves if they’ve bitten off more than they can chew when it comes to taking on the entire international community and negatively impacting billions and billions of dollars in global trade, economic prosperity and international law,” Ryder continued.

Even if it fails to stop Houthi attacks, the task force could at the very least give merchant boats the protection they need to safely cross.

After announcing it would no longer transit the Red Sea, Maersk now plans to send more ships through the Suez Canal and the Red Sea, according to Reuters.

And French company CMA CGM Group is also increasing the number of ships it is sending through the Red Sea, according to a company notice this week.

But German-based shipping company Hapag-Lloyd said in an update it was frequently monitoring the situation and will resume normal transit when “it is deemed safe for our vessels, crews and your cargo on board.”

Swedish company MSC, which recently had one of its vessels attacked by the Houthis, has also not announced a change in plans, along with other companies that have paused Red Sea transits.

Childs, the expert from the IISS, said the region is facing its most persistent maritime threat since the Somali pirate threat about a decade ago.

But Childs said shipping companies were able to deter pirates by bolstering security.

The Houthis, he said, are displaying new tactics, firing anti-ship cruise and ballistic missiles, and they are a state actor, as opposed to non-state actors like Somali pirates.

“It’s a much more sensitive and complicated political arena that they’re operating in at the moment,” he said of the U.S. and its allies. Childs raised doubts of whether the new task force will deter a long-term security threat in the region.

”The question that is growing in people’s minds is you can’t be on the defensive in perpetuity if it’s not having any effects that reduces your deterrence,” he added. “So what are the alternatives?”

Defense, Business, News, Houthi attacks, Houthi rebels, Iran, Red Sea, yemen The Houthi rebel group in Yemen has almost completely shut down a key shipping route in the Red Sea, costing the global economy and setting up a huge challenge for the White House. The relentless Houthi attacks on merchant vessels and commercial boats pushed several of the world’s largest shipping companies to cancel transits through the Red Sea. Oil-producing…

Business

How Trump’s Tariffs Could Hit American Wallets

Published

2 days ago

July 11, 2025

Bolanle Media Staff

As the debate over tariffs heats up ahead of the 2024 election, new analysis reveals that American consumers could face significant financial consequences if former President Donald Trump’s proposed tariffs are enacted and maintained. According to a recent report highlighted by Forbes, the impact could be felt across households, businesses, and the broader U.S. economy.

The Household Cost: Up to $2,400 More Per Year

Research from Yale University’s Budget Lab, cited by Forbes, estimates that the average U.S. household could pay an additional $2,400 in 2025 if the new tariffs take effect and persist. This projection reflects the cumulative impact of all tariffs announced in Trump’s plan.

Price Hikes Across Everyday Goods

The tariffs are expected to drive up consumer prices by 1.8% in the near term. Some of the hardest-hit categories include:

Apparel: Prices could jump 37% in the short term (and 18% long-term).
Footwear: Up 39% short-term (18% long-term).
Metals: Up 43%.
Leather products: Up 39%.
Electrical equipment: Up 26%.
Motor vehicles, electronics, rubber, and plastic products: Up 11–18%.
Groceries: Items like vegetables, fruits, and nuts could rise up to 6%, with additional increases for coffee and orange juice due to specific tariffs on Brazilian imports.

A Historic Tariff Rate and Economic Impact

If fully implemented, the effective tariff rate on U.S. consumers could reach 18%, the highest level since 1934. The broader economic consequences are also notable:

GDP Reduction: The tariffs could reduce U.S. GDP by 0.4% annually, equating to about $110 billion per year.
Revenue vs. Losses: While tariffs are projected to generate $2.2 trillion in revenue over the next decade, this would be offset by $418 billion in negative economic impacts.

How Businesses Are Responding

A KPMG survey cited in the report found that 83% of business leaders expect to raise prices within six months of tariff implementation. More than half say their profit margins are already under pressure, suggesting that consumers will likely bear the brunt of these increased costs.

What This Means for Americans

The findings underscore the potential for substantial financial strain on American families and businesses if Trump’s proposed tariffs are enacted. With consumer prices set to rise and economic growth projected to slow, the debate over tariffs is likely to remain front and center in the months ahead.

For more in-depth economic analysis and updates, stay tuned to Bolanlemedia.com.

Business

U.S. Limits Nigerian Non-Immigrant Visas to Three-Month Validity

Published

4 days ago

July 9, 2025

Bolanle Media Staff

In July 2025, the United States implemented significant changes to its visa policy for Nigerian citizens, restricting most non-immigrant and non-diplomatic visas to a single entry and a maximum validity of three months. This marks a departure from previous policies that allowed for multiple entries and longer stays, and has important implications for travel, business, and diplomatic relations between the two countries.

Key Changes in U.S. Visa Policy for Nigerians

Single-Entry, Three-Month Limit: As of July 8, 2025, most non-immigrant visas issued to Nigerians are now valid for only one entry and up to three months.
No Retroactive Impact: Visas issued prior to this date remain valid under their original terms.
Reciprocity Principle: The U.S. cited alignment with Nigeria’s own visa policies for U.S. citizens as the basis for these changes.
Enhanced Security Screening: Applicants are required to make their social media accounts public for vetting, and are subject to increased scrutiny for any signs of hostility toward U.S. institutions.

Rationale Behind the Policy Shift

Security and Immigration Integrity: The U.S. government stated the changes are intended to safeguard the immigration system and meet global security standards.
Diplomatic Reciprocity: These restrictions mirror the limitations Nigeria imposes on U.S. travelers, emphasizing the principle of fairness in international visa agreements.
Potential for Further Action: The U.S. has indicated that additional travel restrictions could be introduced if Nigeria does not address certain diplomatic and security concerns.

Nigeria’s Updated Visa Policy

Nigeria Visa Policy 2025 (NVP 2025): Introduced in May 2025, this policy features a new e-Visa system for short visits and reorganizes visa categories:
- Short Visit Visas (e-Visa): For business or tourism, valid up to three months, non-renewable, processed digitally within 48 hours.
- Temporary Residence Visas: For employment or study, valid up to two years.
- Permanent Residence Visas: For investors, retirees, and highly skilled individuals.
Visa Exemptions: ECOWAS citizens and certain diplomatic passport holders remain exempt.
Reciprocal Restrictions: Most short-stay and business visas for U.S. citizens are single-entry and short-term, reflecting reciprocal treatment.

Impact on Travelers and Bilateral Relations

Nigerian Travelers: Face increased administrative requirements, higher costs, and reduced travel flexibility to the U.S.
U.S. Travelers to Nigeria: Encounter similar restrictions, with most visas limited to single entry and short duration.
Diplomatic Tensions: Nigerian officials have called for reconsideration of the U.S. policy, warning of negative effects on bilateral ties and people-to-people exchanges.

Conclusion

The U.S. decision to limit Nigerian non-immigrant visas to three months highlights the growing complexity and reciprocity in global visa regimes. Both countries are tightening their policies, citing security and fairness, which underscores the need for travelers and businesses to stay informed and adapt to evolving requirements.

Business

Nicki Minaj Demands $200 Million from Jay-Z in Explosive Twitter Rant

Published

4 days ago

July 9, 2025

Bolanle Media Staff

Nicki Minaj has once again set social media ablaze, this time targeting Jay-Z with a series of pointed tweets that allege he owes her an eye-popping $200 million. The outburst has reignited debates about artist compensation, industry transparency, and the ongoing power struggles within hip-hop’s elite circles.

The $200 Million Claim

In a string of tweets, Minaj directly addressed Jay-Z, writing, “Jay-Z, call me to settle the karmic debt. It’s only collecting more interest. You still in my top five though. Let’s get it.” She went further, warning, “Anyone still calling him Hov will answer to God for the blasphemy.” According to Minaj, the alleged debt stems from Jay-Z’s sale of Tidal, the music streaming platform he launched in 2015 with a group of high-profile artists—including Minaj herself, J. Cole, and Rihanna.

When Jay-Z sold Tidal in 2021, Minaj claims she was only offered $1 million, a figure she says falls dramatically short of what she believes she is owed based on her ownership stake and contributions. She has long voiced dissatisfaction with the payout, but this is the most public—and dramatic—demand to date.

Beyond the Money: Broader Grievances

Minaj’s Twitter storm wasn’t limited to financial complaints. She also:

Promised to start a college fund for her fans if she receives the money she claims is owed.
Accused blogs and online creators of ignoring her side of the story, especially when it involves Jay-Z.
Warned content creators about posting “hate or lies,” saying, “They won’t cover your legal fees… I hope it’s worth losing everything including your account.”

She expressed frustration that mainstream blogs and platforms don’t fully cover her statements, especially when they involve Jay-Z, and suggested that much of the coverage she receives is from less reputable sources.

Satirical Accusations and Industry Critique

Minaj’s tweets took a satirical turn as she jokingly blamed Jay-Z for a laundry list of cultural grievances, including:

The state of hip-hop, football, basketball, and touring
The decline of Instagram and Twitter
Even processed foods and artificial dyes in candy

She repeatedly declared, “The jig is up,” but clarified that her statements were “alleged and for entertainment purposes only.”

Political and Cultural Criticism

Minaj also criticized Jay-Z’s political involvement, questioning why he didn’t campaign more actively for Kamala Harris or respond to President Obama’s comments about Black men. While Jay-Z has a history of supporting Democratic campaigns, Minaj’s critique centered on more recent events and what she perceives as a lack of advocacy for the Black community.

The Super Bowl and Lil Wayne

Adding another layer to her grievances, Minaj voiced disappointment that Lil Wayne was not chosen to perform at the Super Bowl in New Orleans, a decision she attributes to Jay-Z’s influence in the entertainment industry.

Public and Industry Reaction

Despite the seriousness of her financial claim, many observers note that if Minaj truly believed Jay-Z owed her $200 million, legal action—not social media—would likely follow. As of now, there is no public record of a lawsuit or formal complaint.

Some fans and commentators see Minaj’s outburst as part of a larger pattern of airing industry grievances online, while others interpret it as a mix of personal frustration and performance art. Minaj herself emphasized that her tweets were “for entertainment purposes only.”

Conclusion

Nicki Minaj’s explosive Twitter rant against Jay-Z has once again placed the spotlight on issues of artist compensation and industry dynamics. Whether her claims will lead to further action or remain another dramatic chapter in hip-hop’s ongoing soap opera remains to be seen, but for now, the world is watching—and tweeting.