Millions of people around the world watched in horror as Russia invaded Ukraine on Thursday, the most significant attack in Europe since World War II. The invasion continued to grow, and there is no clear answer as to how long the war would last. Click here to protect your equipment and prepare for cyberattacks.
Wars have consequences. And not just for the people directly involved, but for the world around us. The global supply chain will be affected after severe sanctions imposed on Russia by the rest of the world.
The question is, how will the conflict affect Americans in the short term, and what can we expect in a few months? Are there items we can expect to disappear? What about natural resources? Read on to find out what to expect in the coming months.
World supply chain
The war is seriously disrupting the global supply chain. Imports and exports are an important part of every country’s economy and play a significant role in feeding our population and producing electronics and cars.
Although the invasion of Ukraine will affect the EU the most, Americans can also expect significant consequences that will be felt very soon. For example, Russia is the world’s first exporter of wheat and Ukraine’s fifth.
This means that other major wheat exporters will have to make up for the difference as countries around the world impose sanctions on Russia and make it impossible to import their products. As the world is short of wheat, foods that use this grain as bread can expect a huge jump in prices.
The more sanctions are imposed against Russia, the more the world will see the effects. Ultimately, the longer the conflict lasts, the more shaky the global supply chain.
Chip shortage
Chips housed inside computers have long faced a massive shortage that has caused a shortage of electronics supplies. Everything from TVs to tablets was affected.
The main component of chips is a compound called palladium, and as you may have guessed, Russia supplies just under half of world supplies. This means that the ability to produce more chips is greatly reduced the longer the conflict lasts and the more US sanctions are imposed on Russia.
As listed above, one can expect an immediate and long-term impact on the availability of chips for electronic production. But what exactly does this affect? Well first, computers.
High-end technologies such as Apple’s latest iMac will no longer keep up with demand, and long delivery times can be expected. The same goes for tablets.
Many companies, such as Apple, have started producing fewer tablets to adapt to the global shortage of chips, so there has already been a delay in delivery and a shortage of tablets. This will only be exaggerated with the current conflict.
Food and household goods
As Russia and Ukraine supply most of the world’s wheat, barley and rye, foods such as cereals, bread and snacks (think these delicious snack cakes hostesses) are likely to increase in price along with big deficits in the long run.
Due to the shortage of materials such as aluminum, copper and nickel, common household goods and resources for your home, think that copper wire and components of your electrical systems will see a surge in value and a long-term shortage.
What else?
The short answer is everything. Both Russia and Ukraine are major exporters of components that are key in manufacturing processes for things like electronics and cars.
In addition to wheat shortages, Russia supplies a significant portion of the chemicals that create fertilizers, which means it will affect crop production worldwide.
In addition, of course, there is an impact on natural resources: Russia supplies much of its oil to the United States. Some experts expect a price increase of 50-150% in the coming months. This means that driving a car can quickly become one of the most significant monthly bills.
What can you do now?
With the information that inflation is likely to rise sharply, there are a few things you can do now to prepare.
First, if you need to make any major e-purchases, such as computers, TVs or tablets, do so now. You will fix a cheaper price and hopefully overcome the more significant shortage of chips that awaits us.
The same goes for cars. Due to the fact that Russia is responsible for many materials involved in production, the shortage of some cars and inflation are not far off. If you see that in the next few months you will need a new car, it may be time to pull the trigger.
There is nothing we can do to prepare for rising food and gasoline prices other than the hope that the economy will recover soon. So far we can only observe and hope that the conflict will end sooner rather than later.
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