Trendwatch: Egypt says drone hit two ships at Mediterranean port as attacks on energy infrastructure widen; Trump’s Section 301 tariffs face lawsuit seeking removal, refunds; India refiner seeks oil that avoids Red Sea, Hormuz chokepoints

Drone attack caused fire on gas ships at Mediterranean port, Egypt says

Egypt's cabinet has confirmed that a drone attack caused the fire that broke out on Wednesday on two ships at the Mediterranean port of Damietta, a key liquified natural gas (LNG) hub.

"No party has claimed responsibility," a statement said, adding that authorities were continuing to investigate the incident and "take the necessary measures to preserve Egypt's interests and national security".

The drone reportedly hit a US-owned floating storage and regasification vessel, Energos Winter, sparking a blaze that spread to a Greek-owned LNG tanker, GasLog Salem.

Trump’s Section 301 tariffs face lawsuit seeking removal, refunds 

Two U.S. businesses are suing the federal government over new Section 301 tariffs imposed last week, adding another chapter of legal scrutiny for the Trump administration’s duty-reliant trade policy. 

The companies, spice importer Burlap and Barrel and watch retailer Collective Horology, are calling for the removal of the new levies and the payment of refunds, according to a lawsuit filed with the U.S. Court of International Trade on Friday. 

India refiner seeks oil that avoids Red Sea, Hormuz chokepoints 

India’s state-owned Mangalore Refinery & Petrochemicals Ltd. is seeking crude cargoes that sidestep the Red Sea and the Strait of Hormuz. 

The refiner is looking for as many as 1 million barrels for delivery until early September to New Mangalore port on the southwestern coast, according to a tender document seen by Bloomberg. Nearly 300 crude grades are eligible under the tender, including some Middle Eastern varieties, which could face loading disruptions due to the U.S.-Iran hostilities. 

Refiners in India, the world’s third-largest crude importer, are racing to secure alternative supplies amid uncertainty over the timely arrival of Middle Eastern cargoes. The Red Sea had emerged as a vital alternative for crude unable to pass through Hormuz. But attacks by Tehran-backed Houthi militants on ships have now put that route at risk as well. 

Separate US talks with Canada, Mexico test North America’s trilateral trade pact 

Separate U.S. negotiating tracks for Canada and Mexico are testing a trilateral free trade zone that has defined North America's economy for 32 years, with the U.S. potentially forcing concessions on Canada that Mexico agrees to in its more advanced talks. 

 President Donald Trump's decision not to extend the United States-Mexico-Canada Agreement for another 16 years on July 1 leaves the trade deal in force, but requires annual reviews until all three countries either agree on its renewal, or it expires in 2036. 

Trump ratcheted up pressure on Canada on Monday by imposing 50% tariffs on a wide range of goods, with his administration saying it was responding to Canadian policies on autos and dairy as well as provincial alcohol bans. The tariffs take effect August 19. 

US goods trade deficit shrinks, is still expected to weigh on Q2 GDP growth 

The U.S. trade deficit in goods narrowed in June amid a broad decline in imports, but the improvement was probably insufficient to prevent trade from again subtracting from economic growth in the second quarter. 

The report from the Commerce Department on Tuesday also showed exports dropping to a five-month low, pulled down by a sharp decline in shipments of industrial supplies, which include petroleum. The decrease likely reflected a pullback in crude oil prices amid a fragile ceasefire between the U.S. and Iran. 

With businesses ramping up investment in artificial intelligence and consumer spending resilient, last month's drop in imports could be temporary. The AI build-out is reliant on imports. The government on Monday reported a strong increase in orders and shipments for non-defense capital goods in June. 

How India is aiming to future proof its supply chains from global conflicts 

Building a deep manufacturing base spread across multiple sectors is emerging as a cornerstone of India's strategy to future proof itself against supply chain disruptions caused by geopolitical disruptions. Reports suggest that the government is working on identifying an extensive list of products for a fresh manufacturing push. 

The move comes at a time when the US-Iran conflict has impacted several industries and thrown fresh light on India's imports-driven supply chain vulnerabilities.