1/ China and ASEAN just crossed the mark of $1 trillion in trade. Bilateral trade between China and ASEAN surged past $1.05 trillion in 2025, up 7.4% year-on-year, and jumped another 24.7% to $744.41 billion in the first 7 months of 2026. As a matter of fact, China has been ASEAN’s largest trading partner for 17 consecutive years, and ASEAN has held the same title with China for 6 years. This is the result of the “China+1 strategy” as we detailed here.

At the G20 Finance in Asheville starting August 31, US Treasury Secretary Scott Bessent called China’s $1.2T trade surplus a product of “distorted policies that privileged countries’ own exports“. China’s Central Bank Governor pushed back, saying “China never deliberately pursues a trade surplus,“ and separately argued that the US’ $750 billion Inflation Reduction Act subsidies weaken its case against Chinese industrial policy.

As President Trump and President Xi prepare to meet in Washington starting September 23, both sides are working toward a bilateral Board of Trade that would allow up to $30 billion in reduced-tariff trade per side in non-sensitive sectors. Meanwhile, it seems like President Trump is very busy renaming things.

2/ Speaking of the Hormuz Strait, European gas prices spiked above €70 per megawatt-hour as a result of this very Strait’s disruption, leaving Germany the most affected. Storage sat at just 51.5% full as of August 25, compared to 69% a year earlier, and the country is required to hit 70% by November 1.

As the gas-storage association INES’s managing director Sebastian Heinermann put it: “If insufficiently filled gas storage facilities coincide with a very cold winter, Germany may no longer be able to cover normal gas demand in full... If gas prices then rise above the level that industrial consumers can afford, companies will be forced to reduce production.”

Germany’s pharmaceutical & mechanical engineering associations have also both flagged the risk, since many industrial gas processes cannot be shut down or switched at short notice. Goldman Sachs analysts estimate that if Gulf exports normalise only gradually through 2027. We’ll keep track of how this would affect European manufacturers during Winter 2026, moving to 2027.

3/ On August 31, Nvidia is increasingly acting as a financial & infrastructure enabler of the AI race. In Texas, Nvidia agreed with Hut 8 to secure capacity at a data center under development in Nueces County and will hold the lease while supplying the facility with chips. That arrangement supports Lambda’s planned $35 billion cloud-computing deal with Anthropic. The agreement follows Anthropic’s roughly $45 billion deal with Nscale for about 460 megawatts of compute capacity at a planned West Virginia data center, expected to use Nvidia’s Vera Rubin chips, reported on August 26.

Beyond data centers, Nvidia’s physical AI division (cars, robots, drones) generates about $10 billion in annual revenue, and CEO Jensen Huang expects it to grow 10x within 10 years, as China’s boom in humanoid robots and industrial robots is projected to continue.

To give you an idea of how huge Nvidia’s business is, here’s a quick math: Fast Retailing, the Japanese parent of Uniqlo, is the world’s 3rd largest apparel retailer by sales, behind Inditex (Zara) and H&M. Its revenue was about $22 billion in FY2025, after growing 9.6% year on year (already remarkable growth). Nvidia, by contrast, reported $96.2 billion in revenue in the last quarter and $215.9 billion for FY2026. This means it would take Fast Retailing about 17 years at today’s revenue level to match what Nvidia is currently running at per year.

We’ll follow more on this race, and especially how it would affect the autonomous robotics sector and supercapacitors in particular.

Enjoy the rest of your week, stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Further Readings · Supply Chain & Manufacturing News · 09.2026

(Global 🌍) The wearable electronics market has surpassed 500 million annual shipments, and the challenge now lies with responsive materials. Our new briefing profiles the top 14 suppliers that let devices sense, conduct, and respond while staying flexible and washable. Read the full breakdown here.

(Global 🌍) The polymer nucleating agents market is projected to surpass $510 million by 2029, driven by demand for faster cycle times and stronger plastics. Adding just 300 ppm of these agents can cut injection moulding times by 14% and significantly boost polymer stiffness. Our new market map profiles top 6 verified suppliers of nucleating agents. Read the curated list here.

(China 🇨🇳) Chinese heavy industry is pivoting hard into B2B livestream sales, generating $3.12 billion in export revenue through factory-floor broadcasts. Over 16,000 industrial enterprises in Hebei province have adopted the format this year, often hiring foreign hosts to demonstrate machinery like grain processors and cold roll-forming equipment live to international buyers. Some manufacturers now report livestreams account for up to 30% of total overseas revenue.

(US 🇺🇸 / South Korea 🇰🇷) SK Hynix broke ground on a $4 billion advanced packaging facility in Indiana, backed by $458 million in CHIPS Act incentives. The West Lafayette plant will package high-bandwidth memory for AI GPUs, with mass production targeted for the 2nd half of 2029. It won’t fabricate the wafers themselves; those still ship from South Korea, but it brings one of the most complex stages of the AI hardware chain onto US soil.

(US 🇺🇸 / Japan 🇯🇵) SoftBank’s SB Energy issued $5.5 billion in warrants to OpenAI to lock it in as anchor tenant ahead of an IPO. Draft filings reveal what’s behind the AI infrastructure boom: SB Energy has zero operational data centres yet claims a $400 billion contracted backlog, built largely on OpenAI leasing 8 GW of unbuilt capacity in Ohio. Nvidia is backstopping the expansion with $3 billion in equity and residual value guarantees.

1/ Trade negotiations between the US and Canada collapsed on August 21, triggering 50% US tariffs on $20 billion of Canadian imports under Section 338 of the Tariff Act of 1930, unused since 1949. US Trade Representative Jamieson Greer posted on X saying Canada “declined to finalize the deal,” and there are no new planned talks. Canada Prime Minister Mark Carney said the changes were “unfair, uneconomic, and called into question the reliability of any deal.”

Without waiting around, on August 25, Canada announced new tariffs on US goods: tariffs of 15% to 50% on more than 700 U.S. products starting September 8. This is a move designed to reciprocate American tariffs on an equivalent dollar basis, according to Canadian officials.

The US is launching yet another trade mini-war at the exact moment 1) Total federal debt exceeded $40 trillion in August 2026 while 2) interest expense during the first 10 months of fiscal 2026 reached about $1.17 trillion - 15% higher than a year earlier (Interest costs have become the federal budget’s second-largest line item, behind Social Security). The statutory debt limit is currently $41.1 trillion, and analysts expect it could be reached sometime between late winter 2025 and mid-summer 2027. These developments suggest that the US’s fiscal flexibility is narrowing, potentially making it more difficult to cushion the economic effects of future trade or geopolitical shocks. We will follow this story closely in the upcoming weeks.

2/ Speaking of trade wars, we previously discussed the US Ban on Chinese Humanoid Robots. Despite hiccups, the global market for Autonomous Robots hit $47.3 billion in 2025, driven by 1) ageing populations (Japan projects an 11-million worker shortfall by 2040), 2) warehouse economics (US warehousing turnover exceeds 40% annually), and 3) new verticals like semiconductor cleanrooms where Autonomous Mobile Robot deployments grew 72.4% in 2025. For those who are in this space, our team published a deep dive into the Autonomous Robots market here.

3/ Still on trading, on August 13, the White House Office of Trade and Manufacturing Policy released a report titled “The Great Transshipment Scam,” placing Vietnam in Tier 2 of a transshipment-risk framework alongside Brazil, Indonesia, Malaysia, Thailand, and Türkiye. The report flags economies with high transshipment volumes and deep integration into China-linked supply chains, and estimates illicitly transshipped goods at roughly $75 billion annually, with $19–34 billion in associated tariff revenue losses.

Transshipment is quite a young term, meaning “routing goods through a third country with minimal transformation primarily to evade tariffs, quotas, or sanctions, then exporting them to the final market under the third country’s origin.” Some luxury brands like Loro Piana know this all too well, but it wasn’t called transshipment, as the purpose has nothing to do with evading tariffs, to be specific - in fact, it wasn’t called anything at all.

Anyway, we digress. Transshipment might be a very wrong thing to do, but China+1, Nearshoring or Friendshoring is not. Our team wrote about these 3 strategies here.

4/ Still on supply chain, on November 10, the suspension of China’s October 2025 rare earth export controls expires. If enforced, controls expand to 12 elements with extraterritorial licensing for any product containing as little as 0.1% Chinese-origin material. The IEA estimates $6.5 trillion in annual downstream production is at risk.

The Western response of opening new mines doesn’t see the bigger picture, either. China controls 91% of rare earth refining, 98.7% of gallium, 96% of refined graphite, and 83% of tungsten. The IEA finds non-Chinese refining projects face 20 to 150% higher CAPEX and 50% higher operating costs. Our team published an analysis of what to expect on November 10 here.

Enjoy your week. Stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Further Readings · Material & Manufacturing News · 08.2026

(South Africa 🇿🇦) Weirdest story out there - but it’s true: a mass sardine die-off forced South Africa’s only nuclear power plant to halve its output. After dead marine material clogged a seawater cooling intake, triggering an automatic pump shutdown. Investigators detected pilchard herpesvirus as the leading cause for the affected fish, but nuclear safety was not compromised.

(Vietnam 🇻🇳) Vietnam’s National Assembly approved a $3 billion cost increase for the Lao Cai-Hanoi-Haiphong railway, bringing the total budget to $11.1 billion for 426 km of track connecting China’s border to Vietnam’s northern industrial hubs and Haiphong port. Completion targeted by the end of 2030, partially funded through Chinese government loans.

(US 🇺🇸) New York City unveiled a $4 billion, 10-year plan to rebuild a crumbling 1.5-mile stretch of the Brooklyn-Queens Expressway. The section is 20 years past its design lifespan and carries 130,000 vehicles daily, more than double its intended capacity. Construction starts in 2030, with temporary bypass roads to keep 13,000 daily truck trips off local streets.

(Brazil 🇧🇷) Terranova broke ground on a $500 million hyperscale data centre campus outside São Paulo, backed by Actis. The first phase includes a 300 MW substation due online in December 2027, expandable to 1 GW. The facility uses closed-loop liquid cooling for AI and cloud workloads. Part of a broader $1.5 billion plan to build AI-ready campuses across Brazil, Mexico, and Chile.

(Vietnam 🇻🇳 / Malaysia 🇲🇾) Japanese silicon manufacturer Tokuyama is expanding polysilicon production into Vietnam and Malaysia to meet surging AI chip demand. A $60 million Ho Chi Minh City facility uses skilled manual labour to crush and clean polysilicon, avoiding machinery to minimise metal contamination. Combined with a $300 million joint venture in Malaysia with South Korea’s OCI, the expansion will boost Tokuyama’s semiconductor-grade capacity by 50% to 12,500 tonnes annually.

As the ending note, we love you Dolly.

Six stories that matter lately:

1. China’s exports rose 23.9% year-on-year in July to $397.85 billion, while the monthly trade surplus reached $112.5 billion. High-tech product exports increased 52.67% in value, and integrated-circuit export value surged 116.57%, despite export volume rising only 1.76%. The unusually large gap between value and volume growth suggests a major price and product-mix effect, alongside strong AI-related semiconductor demand.

   Meanwhile, China‘s rare earth exports dropped 29.54% by volume as Beijing tightens control over critical inputs to build their in-house capabilities. Despite new 12.5% US Section 301 tariffs, the global AI hardware boom is keeping China’s factories lights on (or off, thanks to their dark factories.) Both imports and exports are expected to maintain momentum through the second half of 2026, with the AI supercycle and green energy demand behind.

2. Speaking of the AI hardware, supercapacitors are emerging as a critical tech. The global supercapacitor market is expanding at 18.52% CAGR, growing from $7.65 billion in 2025 to $25.13 billion by 2032, more than 4x the growth rate of the broader energy storage market. Read our team’s full breakdown of supercapacitor markets by applications here.

3. Still on hardware, magnesium has crossed a historic threshold against aluminium. In early 2026, the magnesium-to-aluminium price ratio fell to 0.75 and hit a 20-year low of approximately 0.695 in April, far below the 1.3 threshold traditionally required for mass substitution. At identical volumes, 1 kg of aluminium becomes 0.64 kg in magnesium, a 30% weight saving that costs 25% less per unit volume. Global automotive magnesium demand is projected to reach 1.06 million tonnes by 2028 at a 36% CAGR. There’s a catch, though: China controls roughly 90% of global primary output. Read our team’s full analysis of magnesium 2026-2030 outlook here.

4. Big Tech is funding Small Modular Reactors (SMR) to bypass the grid. The global SMR market is set to grow from $6.54 billion in 2025 to $10.69 billion by 2033 at 6.8% CAGR, 3x faster than conventional nuclear. Some investments include: Microsoft signed a $16 billion, 20-year power purchase agreement to restart Three Mile Island. Google signed the first corporate SMR fleet deal with Kairos Power, targeting 500 MW by 2035. Amazon invested $700 million in X-energy for up to 12 reactor units. Meta announced plans for up to 6.6 GW of nuclear capacity. Meanwhile, China’s Linglong One entered commercial operation in 2026, giving them a first-mover export advantage. Read our briefing on SMR here for full picture of how this market will evolve, and what’s in it for you.

5. If this is the first time you’ve heard piezoelectric composite, you should take a closer look. The raw piezoelectric materials market sits at $1.73 billion, but the downstream device market it feeds is $32.9 billion and growing at 6.23% CAGR. The energy harvesting subsector alone is expanding at 11.2% annually. What is it used for? Two applications among several: 1) In automotive, flexible piezoelectric sensors sandwiched inside EV battery packs can detect cell swelling in under 10 milliseconds (much faster than normal sensors), 2) In civil infrastructure, cement-based piezocomposites embedded in aging bridges and tunnels are replacing periodic inspections with real-time monitoring. Read our analysis of this market here.

6. In other note, Shein is scaling back its Vietnam operations. Just over a year after leasing a 15-hectare logistics hub near Ho Chi Minh City, the company has cut its lease to 6 hectares and begun mass layoffs, with some teams retaining only 1 in 4 employees. Multiple chokeholds for Shein in Vietnam: 1) the US eliminated the de minimis exemption globally (dropping Shein’s US revenue 14% in Q1), 2) new 12.5% forced-labour tariffs hit both China and Vietnam equally, and 3) Vietnamese suppliers simply can’t support Shein’s signature ultra-thin margins.

   Shein’s CEO pledged $1.5 billion for Guangdong supply-chain infrastructure in February, but domestic suppliers are not reciprocating. Orders are stagnant, thousands of smaller factories are diversifying to Temu and Amazon, and Guangzhou authorities reportedly warned Shein against moving orders away from the region. For anyone concerns with the “China+1” strategy, if you are looking to build a more solid plan than Shein, and if you have nothing to do with fast fashion, contact us with your case at business(at)tocco.earth.

Enjoy your week. Stay sharp, and keep building.

Anh & Tri
On behalf of the Tocco team

Further Readings · Material & Manufacturing News · 08.2026

(US 🇺🇸) On August 14, Trump is imposing 100% tariffs on national-security-sensitive drone imports (over 25 kg or equipped with thermal imaging) and 25% on smaller drones, with allied supply chains also hit: 15% on drones from the EU, Japan, South Korea, Switzerland, and Taiwan, and 10% on UK imports. The tariffs take effect in 21 days for sensitive items. The stated goal: incubate a domestic drone industrial base.

(Europe 🇪🇺) Over 135 million Europeans are enduring temperatures above 35°C. The UK recorded 38.1°C in west London, its hottest day of the year, while Paris hit 38°C. Air conditioning remains largely uncommon across the continent, and UK hospital nurses are reportedly collapsing from heat exhaustion in uncooled NHS facilities. Prolonged heat has intensified drought conditions and sparked wildfires across the region. Read more on El Nino and its impact on global supply chain this year here.

(South Korea 🇰🇷) The KOSPI plunged over 33% in July, its worst month in history, surpassing the crashes of 1997 and 2008. The trigger: a violent unwinding of $19.7 billion in leveraged bets on AI chip stocks after China reportedly achieved mass production of domestic DUV chipmaking tools. Samsung lost 35% and SK Hynix 46% over the month.

(China 🇨🇳) Unitree Robotics priced its $9 billion Shanghai IPO at 150.8 yuan per share, raising 6.1 billion yuan ($848 million) as “mainland China’s first humanoid stock.” Strategic investors include DeepSeek, which committed 141 million yuan ($20 million) under a 3-year lock-up to co-develop embodied AI. Unlike many peers, Unitree is profitable: 1.7 billion yuan in revenue and 591 million yuan in adjusted net profit last year. Trading at nearly 36x price-to-sales, the listing sets the valuation benchmark for a wave of Chinese robotics IPOs, in the context of recent US ban on Chinese humanoid robots.

(US 🇺🇸) Alphabet’s Waymo is importing thousands of Chinese-built EVs for its U.S. robotaxi fleet. Data reveals that Zeekr has shipped over 3,200 units of its CM1e electric minivan to the Port of Los Angeles since 2024, with 2026 alone making up 2,600. Industry analysts suspect Zeekr is offering steep discounts against the 127.5% tariffs to maintain the partnership. To comply with US laws, Zeekr ships stripped-down vehicle shells for Waymo to install its proprietary autonomous driving hardware at its Arizona facility.

Four stories that matter this week:

1. On August 3, a coalition of 25 U.S. states sued the Trump administration in the Court of International Trade to block new Section 301 tariffs of 10% to 12.5% imposed on 60 economies. These states argue the duties exceed presidential authority and will raise costs for consumers and businesses. The tariffs took effect on July 24 and cover economies representing about 99.4% of U.S. imports.
   According to United States Trade Representative, the new tariffs was to pressure foreign economies to block imports made with forced labor and to enforce U.S. trade rules under Section 301. Yet, critics argue these new duties are a way to preserve Trump’s earlier tariff structure in a different legal form.

2. In China, netizens call Donald Trump “Chuān Jiànguó” (川建国 ), which means '“Build-the-Nation Chuan”. Which nation is “Chuan” actually building? To Chinese netizens, he is working to strengthen China. Thanks to the challenges, many new trade routes and innovations are being developed.
   This week’s example: ASML’s sales in China have been constrained since 2019 by U.S.-led export controls that the Dutch government has largely aligned with. Essentially, ASML cannot sell EUV (extreme ultraviolet) machines to China at all, and some of its most advanced DUV (deep ultraviolet) tools also require licenses or are blocked for certain Chinese customers. This opened new innovation routes for domestic makers in China.
   On July 28, Reuters reported that a Shanghai state-backed company (Shanghai Aishengna Electronic Technology Group) had begun limited production of domestically developed immersion DUV lithography tools, with plans to deliver about five units this year, and around 20 in 2027 to Chinese chipmakers including SMIC and CXMT.
   This development is important as DUV tools have long been dominated by the Netherlands’s ASML. ASML’s shares fell sharply after the news broke, wiping out $60 billion of its market value.

3. Still on protectionism, on July 28, the U.S. FCC banned the import and sales of new Chinese humanoid robots, effectively locking out Chinese leaders like Unitree (who currently controls over 25% of the global humanoid market).

   We discuss this and what it means for China’s lead position in this market in our piece “The US Ban on Chinese Humanoid Robots: What does it mean for non-US Buyers?” as, once again, new trade routes open when one closes.

   Looking for reliable global industrial components and materials?
   Tocco team provides full support for sourcing.
   

   Contact Our Team

4. On a closing note, the AI boom is on track to be the most resource-intensive buildout in human history. 61% of all global venture capital ($258.7 billion) was absorbed by AI firms in 2025. Likewise, 44% of total global greenfield FDI was funneled directly into physical infrastructure, data centers, semiconductors, and energy, nearly 3x the share from 5 years ago. The IEA projects that global data center electricity consumption will be 2x to 945 TWh by 2030, with the U.S. and China driving 80% of that growth. We dived into this in our piece “The New AI Physical Economy - A 2026 - 2030 Outlook” for a complete breakdown of 3 mega-trends that industries must look out for.

Enjoy your week. Stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Photo of the Week

Further Readings · Material & Manufacturing News · 08.2026

(Hong Kong 🇭🇰 / United States 🇺🇸) Shein has disclosed an ongoing FTC investigation that threatens its upcoming Hong Kong IPO. The consumer protection probe, revealed in Shein’s draft prospectus, reportedly targets the company’s reliance on design tricks like “fake countdown timers” and “gamified discounts to drive sales”. The regulatory pressure lands as Shein’s financials take a massive hit: the company posted a $99 million Q1 2026 loss. With its valuation already slashed from $100 billion to $40–50 billion and concurrent EU probes underway, Shein’s path to the public markets looks increasingly difficult.

(United States 🇺🇸) Microchip Technology is acquiring Israeli edge-AI chipmaker Hailo to strengthen its portfolio in power-efficient AI processing for robotics, advanced vision, and embedded edge applications. While financial terms remain undisclosed, reports indicate this is a fire sale for Hailo, which had previously raised around $340-$350 million and reached a $1.2 billion valuation as recently as April 2024. The deal provides Microchip with critical NPU capabilities and an established ecosystem to compete in edge computing.

(Global 🌍) Bio-based PET is now growing 3x faster than the conventional fossil-PET market, on track to reach to $7.9 billion by 2032. Driven by corporate decarbonization targets and strict incoming EU mandates, procurement teams are moving to bio-resins. Bio-based PET is a “drop-in” polymer, slotting into existing PET recycling infrastructure without extra financial investments. While fully 100% bio-PET remains a capital-intensive scaling challenge, the 30% bio-resin is already materially reshaping packaging economics.

(Global 🌍) Carbon nanomaterials have moved to being industrial scale, with the global market projected to surge from $7.81 billion in 2025 to $80.66 billion by 2035 at a 26.3% CAGR. Growing at 4x the rate of the broader advanced materials sector, global CNT production surpassed 11,400 tonnes in 2025, driven heavily by EV batteries where CNT additives reduce electrode resistance by 15% to 25%.

Four stories that matter in the last 10 days:

1. On July 23, Brussels fined Alibaba’s AliExpress a record €550 million ($629 million) under the Digital Services Act for failing to tackle sales of illegal, unsafe, and counterfeit products. The fine is more than four times the €120 million levied on Elon Musk‘s X and nearly three times the €200 million imposed on Temu, both for DSA violations. The European Commission found that AliExpress‘s own recommender and advertising systems further spread illegal products, that counterfeit goods including unsafe toys and dangerous cosmetics still remained online, and that penalised traders continued selling on the platform because enforcement was ineffective.

   AliExpress, which serves 193 million European users, called the fine “disproportionate” and said it will appeal. China’s Ministry of Commerce responded with a statement accusing the EU of erecting “digital barriers” under the guise of platform regulation and adopting “discriminatory measures to restrict and suppress the normal operations of Chinese e-commerce companies in Europe.”. The European Commission has set an October 20 deadline for AliExpress to propose remedial measures. Seems like the EU is trying its best to protect itself from China’s overcapacity, but even its citizens are questioning this decision.

2. The AI infrastructure boom is meeting physical reality. Oracle‘s “Project Jupiter“ a 2-gigawatt AI data centre for OpenAI in New Mexico, has hit repeated walls: a switch from gas turbines to a fuel-cell plan, at least one rejected pipeline route, significant opposition from the public, and an Attorney General investigation into allegedly fraudulent public comments/support letter. In Wisconsin, regulators are forcing tech firms to cover data center-related grid construction costs. New York enacted a statewide data centre moratorium. Over 300 data center-related bans or restrictions now exist across the US.

   AI datacenters consume three to five times the power compared to traditional facilities, and so requires tens of billions of dollars in CAPEX. S&P Global last week downgraded Oracle‘s credit rating, citing AI infrastructure spending and cash-flow pressure. We’ll cover more on this line of research - of what we call “the physical limitations of the AI infrastructure race”, and what it means for materials and manufacturing.

3. Speaking of physical barriers, major ocean carriers including MSC, CMA CGM, and Hapag-Lloyd are rolling out Panama Canal surcharges as El Niño droughts threaten to severely restrict shipping capacity. CMA CGM will charge an additional $320 per TEU on cargo headed to the US East and Gulf Coasts from July 25. Hapag-Lloyd is adding $130 per TEU for Far East to North America routes from August 15. MSC is imposing $100 per TEU from August 19.

   NOAA warned on July 9 that there is an 81% chance of a “very strong” El Niño this season. The Panama Canal Authority has already begun cutting the maximum authorised draft for Neopanamax vessels, dropping from 50 feet to 49.5 feet on July 3, with a further cut to 49 feet this Friday and to 48.5 feet by August 15. As we warned on tocco.earth regarding this year’s El Niño, climate volatility is now being actively priced into freight.

4. Still on the physical economy, our Tocco team published a deep dive last week on why trust, not capital or technology, remains the binding constraint in cross-border trade. Global merchandise trade reached $26.3 trillion in exports in 2025, and a single bulk cargo routinely involves $20 to $50 million at risk on one bill of lading. AI-assisted tools have improved document verification, but they cannot guarantee that a party will actually do what they promised.

   Two recent cases in Vietnam, just weeks apart, prove the point. Police uncovered a ring that smuggled over 30,000 diamonds worth $50 million from Hong Kong. The former director of PNJ Lab allegedly issued fraudulent certificates, costing PNJ $255 million in market cap. The probe then expanded to SJC, the country’s largest precious metals firm, where executives allegedly disguised 3,400 smuggled stones as customer buybacks. In both cases, the trusted verification layer was the fraud. Read our full analysis here to understand what it means for trading, and what is NOT going to change for the 5000-year-old profession despite AI evolution.

Enjoy your week. Stay sharp, and keep building.

Anh & Tri,

On behalf of the Tocco team

Further Readings · Material & Manufacturing News · 07.2026

• (China 🇨🇳) Chinese AI is now in heavy physical industry. The 2026 World Artificial Intelligence Conference (WAIC) in Shanghai broke records with over 1,100 exhibitors and 300 world-first product debuts of with a heavy focus on “agent-native” hardware and robotics. Standouts included StepFun‘s agent-native operating system, PrimeBOT‘s transforming humanoid robots, and Unitree’s unmanned factory sandbox where autonomous humanoid robots build and other robots. Read the full rundown of the six major trends defining China’s new robotics landscape on tocco.earth.

• (Saudi Arabia 🇸🇦 & United States 🇺🇸) The U.S. and Saudi Arabia have struck a multi-billion-dollar civil nuclear pact that bypasses standard UN nonproliferation safeguards. Under the new “123 Agreement,” Riyadh gains U.S. technology to build AP1000 reactors, enrich uranium, and reprocess nuclear waste. The deal also omits the IAEA Additional Protocol for unannounced inspections, unlike UAE’s 2009 U.S. agreement. While Washington sees the deal as a necessary wedge to keep Saudi Arabia from adopting Chinese or Russian nuclear infrastructure, experts warn that handing the world’s top oil exporter domestic enrichment capabilities without strict UN oversight risks accelerating a Middle Eastern arms race. Congress now has 90 session days to challenge the pact.

• (Ukraine 🇺🇦) Ukraine is building a €1 billion satellite constellation to separate itself from commercial providers. Following the sudden shutdown of Starlink services during a critical 2022 counteroffensive, Ukrainian satcom startup Stetman partnered with Danish manufacturer GomSpace to develop a 360-satellite low Earth orbit (LEO) network designed specifically to resist electronic warfare. The joint venture (named UASAT) plans to launch its first 120 satellites in 2027 and have the full constellation operational by 2030.

• (United States 🇺🇸) IBM is acquiring quantum R&D pioneer HRL Laboratories from Boeing and General Motors. While financial terms remain undisclosed, the deal brings HRL’s deep physical expertise in silicon-spin qubit engineering, quantum sensing, and advanced cryogenics strictly in-house for IBM. With IBM already pledging over $10 billion toward quantum infrastructure over the next five years, the acquisition highlights how tech giants are aggressively consolidating highly specialized hardware research to reach commercial-scale quantum systems.Both Boeing and GM will remain closely partnered with IBM to develop applied quantum use cases in materials science and industrial logistics.

• (Europe 🇪🇺) The EU’s ban on destroying unsold apparel and footwear has officially taken effect, threatening the manufactured scarcity that underpins the luxury fashion model. The legislation strips brands of their quietest inventory management tool just as a concluding Hong Kong trial revealed that Chanel used to routinely shred up to 20,000 unsold items every six months. With the European Environment Agency estimating that up to 594,000 tonnes of textiles are destroyed annually in Europe before use, high-end houses must now choose between having their name on discount or finally do proper demand forecasting instead of simply burning off excess stock.

Four stories that matter this week:

1. On July 15, China reported a 27% year-over-year export surge in June (hitting $412.4 billion), the fastest growth rate since late 2021. This export boom is timely in the context of a slowing-down domestic economy, where Q2 GDP growth is at 4.3%. This export growth relies on high-tech: semiconductor export surged 122% and auto exports surpassed 1 million units in a single month.

   Exports to ASEAN jumped 34.6%, led by exports to Vietnam ($22.7 billion). This is the “China +1” strategy laid bare: ASEAN in general and Vietnam in particular serves as a pass-through around the tariffs from the U.S. We addressed the “China+1” strategy extensively in our report “The China–Vietnam Industrial Corridor 2026”, as well as in this analysis “Vietnam’s Q1 2026 FDI Numbers: Where the Money Really Went?”. If this is something you’re interested in discussing, write to us anh@tocco.earth.

2. Still on China, Louis Vuitton is taking China’s trademark regulator (CNIPA) to court for not blocking a competitor from registering floral patterns. This move follows hot on the heels of last week’s $1.5 million lawsuit LV won against local chain Molly Tea, which sparked massive nationalistic backlash.

   By suing the State Regulator, LV seems to expose a large geopolitical blind spot, especially considering their financial situation. According to LVMH’s 2025 financial report, global revenue fell 5% to €80.8 billion, with the core Fashion & Leather Goods division dropping 8%. Asia (excluding Japan) accounted for 26% of LVMH’s revenue in 2025. In a market where LVMH is trying hard to regain local shoppers, doubling down on legal fights does not look sensible, but perhaps Bernard Arnault’s lawyers know best.

3. Speaking of industrial survival, on July 16, NVIDIA and Noetra Corp. announced a partnership to build Japan’s first national “Physical AI” infrastructure. Backed by $2.4 billion from Japan’s Ministry of Economy, Trade and Industry, the 140MW data center will house 27,500 GPUs and 13,750 CPUs to build foundation models for robotics and digital twins.

   As we previously covered back in May, this development continues Japan’s push for AI and robotics hardware, betting to capture 30% of the global AI robotics market by 2040 (a $133 billion opportunity). If you are in this space, read on our report “Industrial Robotics - Executive Outlook 2030”.

4. On the other side of the planet, the U.S is in the middle of a large, multistate cyclosporiasis outbreak, a parasitic infection causing severe gastrointestinal distress. There are nearly 7,000 potential cases nationwide, with over 3,300 in Michigan alone.

   Public health agencies have identified shredded iceberg lettuce from central Mexico (Taylor Farms de Mexico) as a likely source in at least one multistate outbreak, leading to a recall across 27 states. FDA and CDC note that cyclospora infections often occur via fresh produce exposed to contaminated irrigation water, wash water, or other environmental sources; contamination generally occurs when food or water contacts human fecal material.

   As these water-borne outbreaks become more frequent (443% increase in infections comparing 2016–2018 to 2021, though CDC cautioned this might reflect better detection as well as a true rise), agriculture as industry will face pressure from regulators in upcoming years. We will monitor this space to assess the implications for industrial equipment markets - particularly in cold chain logistics, food processing, and water treatment sectors.

Enjoy your weekend. Stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Further Readings · Material & Manufacturing News · 07.2026

• (China 🇨🇳) Xi Jinping warns against creating ‘new historical injustices’ in AI era. Speaking at the 2026 World AI Conference on July 17th, President Xi Jinping warned against “new historical injustices” in global tech access. To move past technological blockades, China is attracting the Global South, pledging 5,000 AI training programs over the next five years and establishing joint AI centers across ASEAN, the African Union, and Latin America. China’s domestic smart economy now valued at over 1 trillion yuan ($147.6 billion), bringing open-source models and hardware alternatives as the default AI infrastructure for emerging markets is a sensible move.

• (France 🇫🇷) Lululemon backed a $30 million Series A for French deep-tech startup Syntetica to build a commercial nylon recycling facility. While global nylon production reached 7 million tons in 2024, only 2% is recycled because traditional methods require separating complex mixed fibers. Syntetica’s patented chemical process breaks down both Nylon 6 and Nylon 6,6 simultaneously without pre-separation. We’ll keep track on the next development from Syntetica, as the road to scale for manufacturing facility of this type in Europe is long and windy (we wrote about this in our piece “Europe’s True Reindustrialisation: First, Look Into the Abyss”').

• (India 🇮🇳 & UK 🇬🇧) The India-UK Comprehensive Economic and Trade Agreement (CETA) officially entered into force on July 15, 2026, eliminating UK import tariffs on 99% of Indian goods. The pact aims to double India’s textile market share in the UK to 12% within five years and push total bilateral trade past $100 billion by 2030, while a companion social security agreement will save 75,000 Indian professionals in the UK from double taxation.

• (United States 🇺🇸) From Field to Fabric: Hemp Traders on the future of hemp textiles: LA-based Hemp Traders notes that new mobile decortication technology, which separates bast fiber and hurd directly in the field, is solving the cost issues that have historically kept hemp textile prices high. Hear it straight from Lawrence Serbin, the owner, on how fibre uniformity is the real barrier to scaling hemp textiles in the U.S.

Four stories that matter the past week:

1. The Suzhou Intermediate People's Court ordered Chinese milk tea chain Molly Tea to pay 10.3 million yuan ($1.5 million) to Louis Vuitton for trademark infringement, ruling that the chain’s four-petal flower logo directly copied LV’s registered monogram design.

   It might be too early to say how this story will turn out. The ruling drew over 400 million views on Weibo, with massive public support for Molly Tea. The brand’s American branch updated its logo to a question mark that became quite viral on social media. Molly Tea’s founder and the company have said they will appeal the first‑instance judgment, so the case is not final. After all, $1.5 million to be the center of attention doesn’t seem too high a price for a brand with over 2,300 global outlets.

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2. Speaking of disputes, President Trump ordered an immediate trade embargo on Spain during the NATO summit in Ankara. In his words: “[we] cut off all trade with Spain, including visits.” This stems from Spain’s refusal to commit to a 5% GDP defence spending target by 2035, along with its decisions during the Iran war to deny US forces access to joint military bases and close their airspace to American aircraft.

   Total two-way goods and services trade between the US and Spain is valued at $74.5 billion annually. Spanish companies have invested €97.2 billion ($111 billion) in the US, making it their largest investment destination worldwide, while US productive capital investment in Spain exceeds €116 billion, employing around 200,000 people. This can escalate quickly, as the EU sets trade policy for its member states and requires common treatment across the bloc, meaning any targeted action against Spain could trigger a broader EU response.

3. Still on Europe, we covered Volkswagen‘s initial job-cut plans last week. This week, the story sprang further. IG Metall, Germany’s most powerful industrial trade union, is staging nationwide protests across VW manufacturing sites after CEO Oliver Blume proposed expanding global job cuts to 100,000 along with closing three German VW plants and an Audi factory. The cuts would amount to a roughly 15% reduction in VW‘s global workforce of 630,000, eclipsing General Motors‘ 50,000 layoffs during its 2009 bankruptcy as the largest restructuring in automotive history.

   VW is not alone, though. The German Association of the Automotive Industry (VDA) issued a statement warning that Europe’s car production capacity now exceeds demand by more than 5 million vehicles a year, equivalent to 35 redundant production sites. VDA president Hildegard Müller went as far as suggesting that handing some German car plants over to foreign ownership could be a way to save jobs. The automotive sector is the backbone of the German economy, with an estimated 3 million people directly and indirectly employed across VW, Mercedes, BMW, and their suppliers.

4. Still on automotive, the tariffs on Chinese EVs in Western markets have somehow cemented Morocco’s position as Africa's leading manufacturing economy. Chinese manufacturers deployed over $6 billion in Morocco to build integrated EV supply chains. Morocco controls roughly 72% of the world's phosphate rock reserves, the core input for lithium iron phosphate batteries that the global EV industry is moving towards. Its investments in solar and wind generation give manufacturers a way to lower embedded emissions for compliance with the EU's Carbon Border Adjustment Mechanism. Labour costs in Moroccan automotive manufacturing average just $106 per vehicle, placing it among the world's lowest-cost production centres. Morocco also has FTA access to both the EU and the US, meaning it is not dependent on any single foreign market, or at all - it can export to Africa just as well. For more on the global automotive and EV landscape, read our Automotive and EV Design 2030 report.

Have a nice weekend. Stay sharp, and keep building.

Tri & Anh

On behalf of the Tocco team

Further Readings · Materials & Manufacturing News · 07.2026

(Europe 🇪🇺) Europe is ramping up their datacenter development. In southern France, the city of Pau is spending €3 million ($3.4 million) on a municipal 1 MW facility to keep data hosting under regional control. Meanwhile, Finland’s data center market is undergoing a multi-gigawatt expansion, with total pipelines exceeding 3.4 GW driven by its cold climate and reliable power grid. However, the country is still in two minds - grid operator Fingrid has capped new connections over 10 MW around Helsinki until 2027 to deploy a €7.2 billion infrastructure upgrade, while a proposed 40x jump in national data center electricity taxes has halted tech firms’ buildout efforts.

(Global 🌐) Bio-Based Plasticizers in 2026: Where the Market Is Going? The global bio-based plasticizer market is expanding at an 8.1% CAGR, nearly twice the rate of conventional plasticizers. This growth is made possible due to global regulatory crackdowns regarding plasticizer content in human-contact items, such as REACH Annex XVII and the US Consumer Product Safety Improvement Act (CPSIA). Read the complete bio-based plasticizer deep dive and find verified suppliers here.

(Global 🌐) Biocomposites in 2026: Definition, Materials, Applications, and Market Explained: The global biocomposites market is expanding at a CAGR of 16.5%, roughly double the 7% growth rate of the broader fiber-reinforced composites market. Driven by incoming mandates such as the EU’s End-of-Life Vehicles Regulation (ELVR) and the US USDA BioPreferred Program, biocomposites are fast becoming the default option for reducing vehicle carbon footprints. You can find top supplier profiles here, or the deep-dive report on next-gen biocomposites here.

(Global 🌐) Bio-Based Adhesives: Why the Market Is Moving Fast? As the August deadline is fast approaching, the bio-based adhesives market is valued at $6.8 billion in 2026 and is growing at roughly double the rate of the conventional chemical market. Adhesives are integral to global manufacturing, making the EU’s double whammy of regulations that much more impactful on the bio-based transition. Again, the top suppliers list is here, as well as the deep-dive report on this industry.

Five stories that matter this week:

1. Paris Fashion Week Men’s ran through a historic heatwave from June 24th to 28th, 2026, revealing a lot about luxury fashion as a whole. Louis Vuitton’s models emerged from a giant artificial wave in wetsuits made of neoprene and coats of cashmere and fur. Saint Laurent ran models through fog clouds in leather briefs and choker scarves. Timing is impeccable.

   According to experts, the luxury fashion world operates on the assumption that affluent consumers live in climate-controlled microclimates year-round, making a wool coat in June a desired purchase. However, Europe is a continent built to retain heat and still largely considers air conditioning wasteful or unecological amid a heat wave that has killed 1,500 so far.

2. Still on Europe, the UK fusion sector is entering what several industry leaders described as the “pre-deployment phase” as they plan a £2.5 billion investment in fusion over 5 years, a record-breaking figure for the nation.

   The UK is also seeing fusion’s commercial role differently. Compact fusion systems - onsite small-scale nuclear fusion reactors designed to generate 10 to 20 MW of power - are now being evaluated for sectors requiring continuous 24/7 power: data centres, maritime operations, and water treatment. The UK’s decision to regulate fusion under the Environment Agency and Health and Safety Executive and treat fusion as comparable to established chemical plants rather than fission also decouples them from nuclear site licenses and removes significant regulatory barriers for investors and operators.

3. Speaking of infrastructure, China’s Yarlung Tsangpo project in Tibet, which broke ground last July, has an estimated 60 GW of installed capacity and projected annual output of 300,000 gigawatt-hours - roughly three times as much electricity as the Three Gorges Dam, the world’s biggest hydropower project.

   Pumped storage is an important note here, as pumped hydro systems operate as closed-loop water batteries, storing and releasing electricity on demand without disrupting natural river flows. China has over 217.5 GW of pumped storage capacity under construction and an installed base of over 69 GW, a massive difference from Japan in the second spot (at 21GW). For context: India has made plans for 100 GW of pumped storage by 2035, while the United States has plans to double its current installed capacity of 19 GW.

4. Still on East Asia, Suzhou-based autonomous driving company Momenta opened investor orders for its Hong Kong IPO this week, aiming to raise HK$5.9 billion ($752 million). Backed by General Motors and Tencent, the company would be valued at nearly $9 billion at the offering price - comparable to Uber’s $8.1 billion valuation when it first went public.

   The capital going into autonomous driving platforms confirms that the sector has moved into commercialisation for mass-produced vehicles and robotaxi networks. For industrial operators in semiconductors, this accelerates demand for sensor arrays, edge-computing hardware, and specialised automotive chips. Dive deeper into navigating the current EV landscape with our report here.

5. Speaking of key industries, we published two deep dives this week on sectors where the August 2026 deadlines are now weeks away. Bio-based adhesives are growing at roughly twice the rate of the conventional adhesives market, reaching $6.8 billion in 2026 with a forecast of $15.26 billion by 2035. You can read the full analysis of this market here.

   Separately, the moulded pulp market has reached $6.7 billion, already equivalent to roughly half the size of the EPS packaging market it is replacing, and growing at nearly twice the rate. The cellulose foam market is growing at 18.5% annually, nearly three times the rate of conventional packaging foam. For a full analysis of these markets, it is over here.

Further Readings · Material & Manufacturing News · 06.2026

(Vietnam 🇻🇳) Nasdaq-listed AMC Robotics signed a lease for a 6,150 sqm facility in Bac Ninh, committing $3.5 million to produce its “NovaArm” robotic arm for warehouse sorting and industrial automation. Production targets the second half of 2026. Vietnam’s manufacturing base continues expanding beyond consumer electronics into advanced robotics.

(United States 🇺🇸) A $1.7 million “ozone nanobubbler” system has been permanently installed at the Lincoln Memorial Reflecting Pool to combat algae blooms. The technology injects 500 million microscopic ozone bubbles per teaspoon of water, with Ohio State and NOAA studies showing 90th-percentile effectiveness in open waterways. Long-term success depends on the National Park Service repairing decades-old underground distribution pipes.

(United States 🇺🇸) An unnamed tech firm is proposing an 800-acre, $1 billion data center campus in Solon Township, Michigan, negotiated through a shell company under an NDA. Some said it could be Microsoft, but the possibility has been ruled out. The township previously enacted a six-month moratorium on data center proposals in February 2026, highlighting growing animosity between hyperscale infrastructure expansion and local municipalities.

(Brazil 🇧🇷) Elea and AXIA Energia Announce Amazon’s First AI Data Center: Elea Data Centers, in partnership with renewable energy provider AXIA Energia, is developing “BEL1,” the first AI-neutral data center in the Brazilian Amazon powered 100% by renewable energy. Scheduled to begin operations in the second quarter of 2027, BEL1 will serve as a resilient network alternative to Fortaleza (Brazil’s primary submarine cable gateway), utilizing the “Connected North” infoways program to reduce digital inequality and establish a new strategic connectivity hub in the North.

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Five stories that matter last week:

1. Lululemon apologized in China after its Great Wall yoga festival sparked backlash. A drum performance with brand ambassador Zhu Yilong and the HiiKo Drum Group was criticised for using what users called a Japanese taiko drum at an event celebrating Chinese culture. Against tense China-Japan relations, the criticism spread fast, and Lululemon pulled all related promotional materials.

   From a business perspective, the stakes are high. China Mainland revenue rose 30% year-on-year in Q1 2026 to $478 million, with the region now accounting for 19% of total global revenue, up from 16% a year ago. Meanwhile, North American comparable sales fell 5% for the fifth straight quarter.
   China is increasingly the market keeping Lululemon’s top line moving. The company still expects roughly 20% growth in China for the full year, but a consumer boycott triggered by this cultural misstep could put that trajectory at risk. Previously, we discussed Lululemon’s PFAS lawsuit in the U.S.

2. Still on brands, BYD is preparing to bring its all-electric Great Tang SUV to Europe by late 2026 or early 2027, with over 150,000 orders secured in China since its April debut. To bypass European trade barriers, BYD is accelerating investment in its Hungarian factory and evaluating additional regional manufacturing sites. Chinese carmakers accounted for 15% of Europe’s EV sales in April and nearly 10% of overall unit volume.

   In a different mood, BMW issued a profit warning forecasting a “significant” decrease in pre-tax profit, slashing its automotive EBIT margin guidance from 4-6% down to 1-3%. Shares dropped over 7%. The company cited a sharp demand contraction in China and the economic fallout from the Middle East conflict, keeping energy costs elevated and consumer sentiment weak. Reuters reported that BMW’s positive sales trends in Europe and the US have not been enough to offset the decline in Asia. Meanwhile, Volkswagen plans to cut 50,000 jobs and reduce production by 3 million units by 2030.

3. Still in Asia, the OECD upgraded South Korea’s 2026 GDP growth projection to 2.6%, the only upward revision among G20 economies. Semiconductor exports surged 169.4% year-on-year in May, with chips now accounting for roughly 42.3% of total exports. Traditional manufacturing contracted in the same month: automobiles down 5.9%, general machinery down 6.3%, home appliances down 21.7%, and steel down 2.1%. South Korea also holds the highest reliance on Persian Gulf intermediate energy imports in the OECD, at 5% of gross output. Inflation has risen to 3.1%, temporarily buffered by a $17.7 billion stimulus package and fuel tax cuts. More to follow on South Korea’s economic growth towards the end of the year 2026, with perhaps more collaborations with China on major technologies to watch.

4. Things go south for Indonesia’s stock market, as global index provider MSCI is deciding this month whether to downgrade Indonesia’s stock market from emerging market to frontier market status. Analysts project that reclassification could trigger up to $13 billion in foreign capital outflows. The Jakarta Composite Index has already dropped nearly 31% this year, pressured by high oil prices, a widening budget deficit, and political uncertainty around state interventions in commodity exports.

   For Indonesia’s industrial and manufacturing sectors, a capital flight of this scale will weaken the rupiah, which increases the cost of importing essential industrial machinery, capital equipment, and raw materials, compressing manufacturing margins across the board. To stabilise the domestic economy, the Indonesian government may accelerate state intervention and enforce stricter export controls on critical commodities such as nickel and palm oil. Supply chain operators relying on Indonesian resources should prepare for a highly volatile pricing environment and unpredictable regulatory barriers in the coming months. Indonesia’s fiscal trajectory has been pretty bleak recently: interest payments consuming 19% of government revenue, the rupiah at an all-time low, and $6 billion in foreign capital already departed under Prabowo.

5. NOAA places an 82% probability on a strong El Niño emerging between May and July 2026, with CNN reporting it could become the strongest in 140 years. The WMO confirmed that the peak would land directly on Q4 procurement and Q1 production planning cycles.

   Agricultural raw materials are already under strain. The World Bank projects fertiliser prices to rise 31% in 2026, with urea hitting $725.6 per tonne in March. Farmers are already changing to less fertiliser-intensive crops, meaning yields will be lower before El Niño arrives. The energy situation makes it even worse: when El Niño reduces river flows, hydropower-reliant manufacturers must either save power or rely on expensive diesel backup. We’ll report more on this in next coming months.

Enjoy your week. Stay sharp, and keep building.

Tri & Anh
On behalf of the Tocco team

Leon’s Thoughts on Nantong (南通)’s Rise

Exploring Nantong (南通), the quiet $184 billion powerhouse that pioneered China’s modernization and is now poised to become Shanghai’s massive northern gateway.

This episode is also available on Spotify and Apple.

Further Readings · Material & Manufacturing News · 06.2026

(United States 🇺🇸) Algenesis: Replacing Polyurethane with Plants: Algenesis has developed Soleic, a plant-based polyurethane system where both material durability and the exact biodegradation rate are mechanically governed by a single variable: the precise ratio of hard-to-soft segments within the polymer chain. This material shift arrives ahead of the EU Extended Producer Responsibility (EPR) eco-modulation fee scheme, which is scheduled for implementation to penalize conventional petroleum-based polyurethanes while financially rewarding biodegradable alternatives. Material specification teams and footwear procurement leads should watch these tunable bio-polyurethanes to hedge against looming regulatory penalties.

(Europe 🇪🇺) CEFLEX Identifies 440,000-Ton Annual Deficit in Recycled Flexible Plastics. A new report by CEFLEX reveals that EU Member States must source an additional 440,000 tonnes of post-consumer recyclate (PCR) from flexible polyolefins annually to meet incoming PPWR mandates. According to the analysis, Europe requires a total of 2.5 million tonnes of PCR derived from flexible plastics by 2030 to satisfy mandatory recycled content targets, a figure projected to climb to 5.9 million tonnes by 2035 to meet comprehensive plastic packaging recycling rates. CEFLEX warns that packaging applications alone cannot absorb this volume. To prevent a market collapse, the value chain must develop non-legislated, open-loop secondary markets, which elevate total potential demand to 4.3 million tonnes by 2030.

(Global 🌐) What Digital Sovereignty Actually Means for Industrial Operators? In her interview with Tocco, Dr. Olga Ustyuzhantseva, Senior Researcher from the University of Johannesburg, outlines how the enforcement of the EU Carbon Border Adjustment Mechanism (CBAM) has officially transformed product emissions data from voluntary ESG paperwork into regulated trade infrastructure.

(Vietnam 🇻🇳) Vietnam’s Economic Boom, Explained. Vietnam's GDP expanded 7.83% year-on-year in Q1 2026, with registered FDI hitting $15.2 billion and disbursed FDI reaching $5.41 billion, the strongest first quarter since 2022. Electronics and component exports jumped 45.5% to $30.7 billion, anchored by Samsung's cumulative $24 billion footprint (including a new $4 billion semiconductor project in Thai Nguyen), Foxconn's $383 million printed circuit board plant, and LEGO's $1.3 billion automated clean energy factory. Total exports rose 19.1% to $122.93 billion, though surging demand for production inputs created a $3.64 billion trade deficit driven by imported machinery, raw materials, and electronic components. Vietnam is upgrading fast, but not equally across the regions. To navigate this, check out our report here.

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Four stories that matter from the past week:

1. Washington has set a July 4, 2026, deadline for the EU to fully implement its 2025 trade deal, with tariffs on European cars and trucks jumping from 15% to 25% if missed. A loss of €3.5 billion in 2026 and €5.7 billion in 2027 if this goes through is estimated for the European automotive industry. In fact, European auto suppliers are operating on average EBIT margins of 3.6%, meaning a 25% tariff would push many directly into losses.

2. How to counter-attack in a tariff war? Impose a tariff on another party. On May 28, the EU discusses potential restrictions on Chinese imports. Commissioners were asked to bring examples of Chinese activity across every area, from trade and agriculture to defence, health and digital. Indeed, Chinese imports are sometimes priced at 40% below local EU equivalents, as a result of what we call the “overcapacity strategy”. The surge in imports spans electric cars, machine components, medical devices, and foodstuffs.

3. On May 27, The Economist published an article called “Japan, South Korea and Taiwan are suffering industrial rot”. How come? Taiwan's economy is growing at 13.7%, and South Korea’s corporate profits are up 159%.
   This growth depends a lot on AI and semiconductors (15% rise in the region’s industrial output since 2019). In fact, they make up 80% of Taiwan’s exports and over 40% of South Korea’s, making the region 73% more concentrated than the rich-world average. Excluding chips, Taiwanese exports have fallen 40% since 2022, while non-AI industrial output in South Korea and Japan is also reducing, as Chinese manufacturers have moved from buying Northeast Asian intermediate goods to producing them domestically at lower cost.
   The argument of the Economist was that these 3 countries put all their eggs in one basket, and they should diversify before China or the US would soon take over with cheaper alternatives.
   We laughed a bit when reading this, and remember the Gen Z saying of “oh no, my lobster is too buttery, and my steak is too juicy”. What a champagne problem to have. And plus, what are the actual choices here to diversify? What else to bet on? Footwear? Phones? Spaceships?

4. There might be other parts of East Asia that are worth betting on. We previously published the report on the China-Vietnam Industrial Corridor, mapping out the interesting dynamics of “China+1” under Trump’s reign. We continued to monitor this corridor, and published another analysis on Vietnam alone, explaining Vietnam’s economic boom, and what it means for Investors. Next week, a private delegation will move through 8+ industrial parks and zones in North of Vietnam with our team, with more delegations planned in July and August. We’ll keep you posted on more developments on the ground.

Have a nice week ahead. Stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Leon’s Thoughts on Vietnam’s Economic Boom

Leon, Tocco Founder & CEO, explained why the narrative of “Vietnam replacing China” is lazy, what the unspoken challenges are for investors and industrialists, as well as the opportunities for those who know how to use Vietnam’s “balancing act”.

This episode is also available on Spotify and Apple.

Further Readings · Material & Manufacturing News · 06.2026

• (Southeast Asia 🌏) After Hormuz: The Case for ASEAN Energy Sovereignty. Following the March 2026 blockade of the Strait of Hormuz, Southeast Asia is experiencing severe energy shocks. The region’s limited fiscal space (tax-to-GDP ratios of 10-16%) means governments are bleeding emergency funds to stabilize prices. While geographic diversification (buying non-Gulf LNG) is a band-aid, the structural solution is accelerating the ASEAN Power Grid, which could cut regional decarbonization costs by $800 billion compared to siloed national approaches.

• (China 🇨🇳) China’s industrial profits surged 24.7% year-on-year in April, marking the fastest growth since late 2023. Computing and electronics earnings more than doubled, and upstream oil and mining sectors surged due to higher crude prices, while downstream sectors like furniture manufacturing plunged 54.4%. With the Producer Price Index also jumping 2.8%, the most since July 2022, operators should anticipate rising input costs squeezing margins across lower-tier manufacturing.

• (UK 🇬🇧) Scottish designer Elis Blackwood is scaling a slow-craft methodology that uses industrial waste streams and transforms them into highly durable architectural surfaces and art pieces. Blackwood’s approach treats durability as the primary strategy, utilising mechanical fixing and tension rather than permanent adhesives to ensure components remain fully reversible and separable at the end of their lifecycle.

• (France 🇫🇷) Michelin announced plans to eliminate up to 1,500 French roles (nearly 10% of its workforce) between 2027 and 2029, following two factory closures and 1,246 cuts last year. Q1 sales dropped 5.4% to €6.2 billion. The company stated plainly that labour costs, energy prices, and tax burdens in France are “significantly higher than other industrialised nations,” rendering domestic operations unprofitable despite €3.5 billion in local investments over the past decade. Renault is also laying off engineering positions.

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Four stories that matter this week:

1. Shein is acquiring Everlane for $100 million. Everlane built its entire identity on “radical transparency,” ethical supply chains, and what it called “Cleaner Fashion,” while Shein is definitely not anywhere close to that. They produce an estimated 1 billion items per day, and their Scope 3 emissions increased 170% in 2023 and 2024. They have already acquired stakes in Forever 21 and Missguided, and shown interest in Topshop. The pattern? Shein absorbs struggling Western fashion IP to acquire brand equity, customer data, and geographic preferences that feed its algorithmic production engine (a practice that Zara made famous).

   We covered Allbirds’ collapse (and rebirth into an AI company) a few weeks ago, and now it’s Everlane. Another moment of “you’re supposed to fight them, not join them”. But it was true before, and it’s still true now: “sustainability” brands that don’t make money will get bought by the rivals they set out to defeat.

   To receive new posts and support our work, consider becoming a free or paid subscriber.

2. Speaking of capital, Vietnam posted its strongest FDI numbers in five years, with $18.24 billion in registered foreign capital across 1,249 projects. But the headline hides a deeply bifurcated landscape. We found 5 interesting graphs and numbers to depict the picture. One of those is how Thai Nguyen Province topped the country with $6.07 billion across just 12 projects. Meanwhile, Ho Chi Minh City pulled in $3.75 billion but across 656 projects, roughly only $5.7 million each. Read our full analysis here.

   With these readings, we are excited to bring a private delegation to Vietnam’s industrial corridors in summer 2026. If you have a specific project or agenda for Vietnam, send us your case at anh@tocco.earth, and we’ll see if it’s a fit.

3. Moving up North. In China, sodium-ion batteries reach mass production viability with a 60 GWh storage deal. By eliminating the need for lithium, cobalt, and nickel, sodium-ion offers a structurally different cost and safety profile. Procurement teams evaluating grid and cold-climate storage should treat the second half of 2026 as an active evaluation window, as this proven alternative will soon place significant pricing pressure on the default lithium iron phosphate (LFP) market. More details are found here in our analysis.

4. On the other side of the world, the US Environmental Protection Agency announced plans this week to rescind Biden-era drinking water limits on four PFAS “forever chemicals” and delay compliance deadlines for two others until 2031, claiming the previous rules were rushed and legally vulnerable. The timing creates a rather confusing regulatory landscape:

   • While the US federal government is rolling back water standards, state attorneys general are pursuing PFAS in consumer products, as we covered with the Texas investigation into Lululemon’s apparel just weeks ago.

   • The EU, meanwhile, is moving forward with a broad restriction process covering over 10,000 PFAS substances across multiple industrial sectors.

   We’ll keep covering these PFAS restrictions in the upcoming months.

Have a nice week ahead. Stay sharp, and keep building.

Tri & Anh

On behalf of the Tocco team

Conversation with Janet A. Ginsburg 🦋

This week on Long Game: Leon, Tocco CEO, had a chat with a strategist, systems thinker, and award-winning journalist on:

• Why the world’s singular focus on “net zero” and “circularity” is not enough

• Why we are quietly undergoing a massive, planet-altering “material transition”.

• Why fresh water and phosphorus are the two ultimate limiting factors for human survival

• The devastating impact of U.S. political instability on long-term science and innovation funding, and how it is crippling the research pipeline.

And so many more fascinating topics. This episode is also available on Spotify and Apple.

Follow Janet’s Substack here :

Further Readings · Material & Manufacturing News · 05.2026

• (China 🇨🇳 / Vietnam 🇻🇳) Tocco Report: The China-Vietnam Industrial Corridor: 2026 Edition. The China-Vietnam border increasingly functions as a single, highly integrated manufacturing system. Our latest report breaks down the operational logistics and current cost structures to watch over the next few months to determine if this tariff-arbitrage model remains viable.

• (China 🇨🇳 / Global 🌏) Definitive Guide to Chinese Service & Humanoid Robots 2026: Top 12 Leading Makers. Chinese vendors accounted for nearly 85% of global commercial service robot shipments in 2024. Fascinating space to look at in Q2 2026. If you are working with industrial-grade robots, also check out this report: Industrial Robotics·Executive Outlook 2030.

• (Global 🌏 / Israel 🇮🇱) Cooling Earth with Silica Particle? Israeli-U.S. startup Stardust Solutions has unveiled its proprietary solar geoengineering technology, which involves spraying 0.5-micron amorphous silica particles 11 miles into the stratosphere to reflect sunlight. Backed by colossal $75 million in funding, the company is aiming for full-scale commercial deployment by 2035 and projecting $1.5 billion in annual revenue from government contracts. We can only hope they had done a thorough test of what this might imply for the biosphere.

Four stories that matter this week:

1. Trump visited Beijing from May 13 to 15. The headlines were big, but the actual deals? Nothing much. The US side said China agreed to buy about 200 Boeing jets, plus agricultural and energy packages. China’s official statements described these as “preliminary” or “intention” rather than finalised contracts. Both sides announced a willingness to set up trade coordination bodies, which is more institutional than transactional. On Hormuz, the White House readout said both leaders agreed the Strait should remain open.

   So what did the visit actually produce? Perhaps something arguably quite valuable right now: the signal that there won’t be an imminent major conflict between the two largest economies. We’ve said it before: certainty is the new trade currency, and last week, a small deposit was made. Next week, Putin will visit Beijing. We’ll cover what it means for industries & manufacturing sector.

2. Speaking of China, Shein is accumulating lawsuits lately. The Texas attorney general sued in February on two simultaneous claims: product safety (independent testing found PFAS in Shein garments at concentrations up to 3,300 times EU safety limits) and data privacy (whether the company’s data handling exposes consumer information to the Chinese government). In London, Shein accused Temu of copying roughly 2,300 product photos. Temu conceded that claim almost immediately, but then counter-claimed another case: Shein locked fast-fashion suppliers into exclusive manufacturing agreements to block competitors from accessing the same factories. That part goes to a separate trial next year. If it holds, Shein’s market dominance gets reframed not as efficiency but as a competition law violation. All of this lands while Shein, perhaps, is still trying to IPO, first blocked in the US in June 2024, and faced resistance in London in 2025.

3. Speaking of capital, Vietnam just posted its strongest FDI numbers in five years. Total registered foreign investment in the first four months of 2026 reached $18.24 billion, up 32% YoY. Manufacturing and processing absorbed 69% of total registered capital. Singapore led with $7.4 billion (39.9%), followed by South Korea at $4.8 billion (25.7%). China led in the number of new projects (33%).

   On the trade side, total export-import turnover for the first four months of 2026 reached $344 billion, up 24.2%. The trade surplus with the US grew 24.4% to $46.9 billion, while the trade deficit with China widened 33.4% to $46.4 billion. The pattern we’ve covered before in packaging and electronics: supply chains move, but dependency cannot change fast. Meanwhile, exciting developments cannot be denied: business registrations are surging too; 77,800 new enterprises in the first four months, up 50.7%.

   IMP: We are bringing a private delegation to several Vietnam’s Northern industrial parks starting June 8. It’s a small group, invitation only. If you have a concrete project or agenda for Vietnam, send us your case at anh@tocco.earth, and we'll see if it's a fit for this cohort.

4. And this week’s premium read from Tocco Editorial team: “How Europe lost the Tech Race”. We looked at one number first: Venture capital deployed in Europe in 2025 reached €66.2 billion, only 22% of the US figure despite comparable economic size. Europe produces more tech startups than America, but has 80% fewer scaleups and 85% fewer unicorns. The energy crisis compounded the structural problem for the European market: EU industrial electricity prices in 2024 were €0.199 per kWh, versus €0.082 in China and €0.075 in the US. Read the full analysis here.

Enjoy your weekend. Stay sharp, and keep building.

Anh
On behalf of the Tocco team

Further Readings · Material & Manufacturing News · 05.2026

(Colombia 🇨🇴) OffMatter: A Neotropical Material Language. A conversation with OffMatter founder David Cabra Jaramillo on algae, cassava starch, Colombian botanical pigments, and what it means to design the material before the object.

(China 🇨🇳) Color, Material, Finish: 10 Chinese EV Brands Taking CMF Seriously - A look at ten companies and the specific material, colour, and finish strategies they’re applying across their current ranges.

(UK 🇬🇧) Starting July 1, Britain plans to slash tariff-free steel import quotas by 60%, with some categories cut up to 90%, and raise out-of-quota tariffs from 25% to 50%. The British Chambers of Commerce (BCC) warned this could push manufacturers to rely on specialist steel grades not produced domestically, with some facing millions in additional costs or production halts. The goal is to rebuild domestic share from 30% to 50%, but the BCC argues the unintended consequences could push firms toward cheaper overseas suppliers.

(China 🇨🇳 / Global 🌏) China has banned exports of sulphuric acid, the world’s most used industrial chemical, after its imported sulphur supply was disrupted by Hormuz. Roughly half of the global sulphur supply came from the Middle East in 2025. Sulphuric acid is used in batteries, textiles, fertilisers, petroleum refining, drinking water treatment, and chip manufacturing. We will cover more on this story next week.

Between hantavirus headlines and everything else this week, we considered just sending you a blank email with “go touch grass, stay healthy” as the subject line.

But the world goes on, and there are important signals this week:

1. In one week, engineered/lab-grown meat made so much noise:

   • On May 5th, Californian startup Biosphere received a $9 million grant from the US Army to build portable bioreactors producing gas-fermented proteins for “remote and logistically constrained environments”.

   • One day before, May 4th, the US Army is calling on companies and researchers to develop alternative proteins for Meals Ready-to-Eat (MREs), covering precision fermentation and novel biomanufacturing methods. From 2027, vegan options will replace the current vegetarian dishes. For context, the US military issues over 37 million MREs every year, and they are one of the world’s largest food procurement operations.

   • Across the Atlantic, on May 7th, UK startup Meatly raised $14 million to build Europe’s largest cultivated meat facility in London, with pet food launches planned for 2027.

   • Meanwhile, Amsterdam became the world’s first capital city to ban advertisements for meat and fossil fuels in public spaces, effective May 1.

   Now, hear me out. I’m a vegetarian, so perhaps I should be very happy about this. But I can’t help thinking: why specifically lab-grown meat? What about tofu or tempeh, which have been around for thousands of years?
   Anyhow, it seems like the second spring for lab-grown protein is here, after a very tough 2024-2025 period. This time, the push is definitely coming from institutions, not just startups in previous waves. If we dig deeper, on February 14th 2021, Bill Gates did an interview with MIT Technology Review and declared, “Rich nations should shift entirely to synthetic beef”. Things seem to be falling into pieces indeed.

2. Some will win, some will lose. US inflation hit 3.3% in March 2026, up from 2.4% in January and the highest reading since May 2024. Energy prices rose 12.5% year-on-year, with gasoline up 18.9% and fuel oil up 44.2% as a direct or indirect result of Hozmuz. The IMF now doesn’t expect inflation back at the Fed’s 2% target until 2027 at the earliest.
   This affects the manufacturing sector massively; the ISM Prices index surged to 84.6 in April, its highest since April 2022 (Covid time with supply chain disruption). For context: an ISM Prices Index reading above 50 means prices are rising, 84.6 indicates a broad, sharp increase in input costs across manufacturers. Manufacturing is still expanding (PMI at 52.7 for the fourth straight month), but it’s expanding on rising input costs and lengthening lead times, the combination that compresses margins fastest.
   Among all manufacturing sectors, chemical and petrochemical producers are taking the brunt, with crude- and polyethylene-linked product lines already running through multiple price spikes. We wrote an in-depth analysis here for those who are watching how this will unfold for the manufacturing sector in the US in the upcoming months.

3. Speaking of where money is flowing, Singapore pulled in $197 billion in FDI in 2025, up 8.4% year-on-year. The US, Netherlands, Ireland, Mainland China, and the UK accounted for 46.8% of total inflows. Finance and insurance alone received 63.9%. For context, in comparison: Indonesia got $53 billion, Vietnam $38 billion, and Malaysia/Thailand combined for around $21 billion. Singapore continues to punch absurdly above its weight as a capital magnet in ASEAN. As for manufacturing sector, Singapore remains the “leader” in high-end industrial value (Precision Engineering, Pharma, Chips etc.), though in sheer physical volume and total manufacturing output, Indonesia (Resource Processing, EVs, Food etc.) and Vietnam (Smartphones, Textiles, Electronics etc.) have overtaken Singapore. If you’re in this space, dive into our Guide “Sourcing in China & Vietnam 2026” which gives context around China-ASEAN’s industrial ecosystem.

4. Back to Europe, on May 5th, the EU confirmed this week that the EUDR will be enforceable from December 30, 2026, with no further delays. Implementation for most micro and small operators begins June 30, 2027. This follows two rounds of delays since the regulation was first set to take effect at the end of 2024.

   The timing is interesting. Just a week earlier, 32 US Congress members wrote to Commission President von der Leyen, urging her to “hold the line and implement the EUDR as currently written.” Their letter directly called out the Trump administration’s efforts to weaken the regulation, noting that the USDA has been lobbying European capitals to introduce a “no risk” classification for certain countries, including the US. The Congressional representatives argued that the Trump administration, having repealed domestic forest protections, “cannot be seen as a credible negotiator on the EUDR.”
   UN data shows the US is responsible for 120,000 hectares of forest loss annually over the last decade. Globally, over 10 million hectares are deforested each year, accounting for up to 21% of greenhouse gas emissions.
   But that’s fine, because according to Bill Gates again, planting trees for climate change mitigation is“complete nonsense”, and he asked, “Are we science people or are we the idiots?” To which I’d answer: planting trees is for idiots because it doesn’t make any money. For others, I guess they do engineered meat.

5. Still on regulation, a broad coalition of food, beverage, and packaging companies, including Coca-Cola, Heineken, Carlsberg, Ball Corporation, and Ardagh Group, has written to EU leaders asking for parts of the PPWR to be delayed.
   The regulation is due to apply from August 12, 2026. The signatories say they support the objectives but warn that key provisions remain unclear, less than four months before implementation, and that divergent national interpretations could fragment the Single Market.
   Zero Waste Europe has pushed back strongly, arguing that the PPWR went through a full co-decision process and should now move to implementation as planned.

   The deregulation push in the EU has gained momentum since the end of 2025. REACH revision was dropped. PPWR is being challenged. EUDR has already been delayed twice. The pattern is quite clear: regulation in the EU gets announced with ambition and runs headlines, then meets downsizing. We’ll keep tracking what actually sticks.

Enjoy your weekend. Stay sharp, and keep building.

Anh

On behalf of the Tocco team

Who Made Our Curated Materials Lists This Week?

The materials landscape is getting noisier. More suppliers, more claims, more labels that don’t always hold up under scrutiny. Finding the right partner in any of these spaces takes time that most teams don’t have.

That is why our team has been building curated supplier maps across the material categories where we see the most activity and the most confusion. Each one is handpicked, validated, and updated weekly as new information comes in.

Currently live on MatterDrop: PHA (top 20) , Low-VOC Coatings and Paints (top 30), Seaweed-Based Materials (top 27), Bio-based Adhesives (top 15), Leather Alternatives (top 35), Cellulose Foams and Moulded Pulp (top 26), Bio-based Pigments and Natural Dyes (top 15), and Mycelium-Based Materials (top 29). Twenty more categories are coming next week.

If you’re sourcing in any of these spaces, take a look. If you produce and supply - and think you should be nominated in these lists or other ones, submit your information, and our team will validate if relevant within 24 hours.

Check All Themes Here

Conversation with John Gibson, Biomechanics Designer on Footwear & Joint Pain

This week on Long Game: Leon, Tocco CEO, sat down with John Gibson, a movement scientist, computational designer, and footwear researcher who builds what the industry hasn’t thought to make yet.

The conversation goes places you wouldn’t expect from a footwear episode:

• why the modern shoe industry work like processed food for our musculoskeletal system?

• why standard consumers shouldn’t be wearing the same ultra-performance gear as elite marathon runners?

• and why the future points toward hyper-personalised, 3D-printed shoes created from a phone scan?

• they also get into biomimicry, biodegradable PHA-based knitted materials, zero-waste production, and the unglamorous reality of being a young entrepreneur pushing through constant cycles of failure?

Available on YouTube, Spotify, and Apple Podcasts.

Further Readings · Material & Manufacturing News · 05.2026

(Global 🌏) 10 Brands Using Natural Pigments and Dyes in 2026. Our roundup of consumer brands moving away from synthetic colorants toward plant-, mineral-, and waste-derived alternatives. See what’s working at scale for these brands.

(UK 🇬🇧 / Italy 🇮🇹) Naturbeads Gets €4.1M EU Funding to Replace Microplastics with Cellulose Materials. The University of Bath spinout will use European Structural Fund money to scale its first commercial plant in Puglia, Italy. Output starts at 20 tonnes/year with a path to 500 tonnes. Naturbeads is targeting cosmetics, paints, detergents, and biomedical applications ahead of EU rules banning microplastics in rinse-off cosmetics from 2027, leave-on cosmetics from 2029, and makeup from 2035.

(Europe 🇪🇺) How is the Strait of Hormuz Crisis Impacting European Plastics Recycling? ICIS analysts walk through how the conflict is reshaping virgin–recyclate spreads across PET, rPP, and rHDPE. With over 80% of Middle East PE export capacity routed through the Strait, soaring virgin prices have temporarily improved the economics for recycled materials in Europe. Also read up on our coverage of the broader Hormuz fallout here for full context.

(Finland 🇫🇮)ASK Scandinavia: Building a Responsible Luxury Accessories Brand. Founded in 2017 by Karoliina Bärlund, the premium accessories label has built its product line around alternative materials. Dive into their story and learn how they did it in a featured interview with us.

Four stories that matter this week:

1. On April 28, the UAE announced to leave OPEC and OPEC+ (the latter includes Russia) on May 1. OPEC was founded in 1960 to give leading oil producers collective control over global prices through the management of supply limits. Since 2020, the UAE and Saudi Arabia have clashed over oil policy, with tensions surfacing during OPEC+ summits in 2020 and 2021. While the UAE wanted to increase production post-pandemic, the Saudis pushed for lower output to sustain high prices. This divide stems from different economic needs: Saudi Arabia requires high oil revenue to fund its massive Vision 2030 projects, whereas the UAE’s more diversified economy is less reliant on crude prices.
   The UAE's departure from the oil cartel means that Abu Dhabi no longer finds value in the Saudi-led group. As Energy Minister Suhail Al Mazrouei told the New York Times: “The world needs more energy. The world needs more resources, and [the] UAE wanted to be unconstrained by any groups.”
   This shift may trigger a broader withdrawal from organizations like the Arab League, the Organization of Islamic Cooperation, or the Gulf Cooperation Council, as regional players prepare for, as experts call, “an unpredictable post-war landscape.”

2. Some disbanded, and others flock together. On May 1, China extended a zero-tariff policy to all 53 African nations it has diplomatic relations with, becoming the first major economy to do so. The policy rolled out in two phases: 1/ the first phase, in December 2024, covered 33 least-developed African countries across 100% of tariff lines; 2/ the second, effective this week, extends to the remaining 20, including South Africa, Nigeria, and Egypt.

   The motives are straightforward. Western markets are closing to China-made goods (US tariffs, EU countervailing duties on EVs, to name a few), and China needs alternative export channels. Meanwhile, Africa has been the fastest-growing destination for Chinese exports since 2018. At the same time, Africa needs industrial goods for its infrastructure buildout, and China is currently overproducing exactly those goods.
   We wrote a deep analysis of this zero-tariff deal between China and Africa in our article “China-Africa Zero-Tariff Policy: What It Means For Supply Chain and Sourcing” and what it entails for the rest of the world.

3. Some pushed forward, others deferred. On April 27, the European Commission decided NOT to propose a major revision of REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals), which aimed at tightening legal requirements on chemicals used in products in Europe. After six years of postponement, Environment Commissioner Jessika Roswall confirmed that “now is not the time” and that Europe is “at a point where we need certainty and predictability.” (indeed, as high production and energy costs due to the Iran War are hurting European manufacturers since February this year)
   The REACH revision was first announced in 2020 as one of the most ambitious chemicals reforms of the European Green Deal, and it has been postponed on multiple occasions since. The Commission is now working on “a minimal reform of the current framework”. Roswall also said the upcoming EU PFAS restriction proposal could arrive by year-end. Until year-end, it’s still a long way to go, and anything could happen to this EU PFAS proposal, given the trend of deregulation in Europe since the beginning of 2026 (the first shot was the EU Omnibus Package). For teams who need to stay close to this development of the PFAS ban in the EU and other regions, check out our report “The 2030 PFAS-free Roadmap: Viable Alternatives” and prepare your industrial strategy.

4. Speaking of strategy, our team published an essay called “Overcapacity is the Strategy”, covering China’s industrial overcapacity, and why the standard media’s reading of it misses the point. They keep quoting these numbers: nearly 24% of Chinese industrial firms operating at a net loss by the end of 2025, and manufacturers pricing products at a loss for 37+ consecutive months.
   Yes, numbers don’t lie, but the interpretations often do. In this essay, we explained how China’s industrial system uses excess capacity to reduce component costs, accelerate product iteration, and stress-test industries through brutal competition, creating survivors across major industries (EV, steel, solar, batteries, waste-to-energy, etc.). For industrialists and investors, if you have to read one thing next week, read this essay. For others, it’s simply an important read for your view on manufacturing and supply chain.

Enjoy the rest of your weekend. Stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Help Us Find The People Worth Listening To

The industrial world is becoming harder to read. Geopolitics, energy, regulation, AI, materials, manufacturing, and supply chains are now one connected story.

That is why we are expanding our conversations through Long Game with Leon Ge (available on YouTube, Spotify, and Apple Podcasts) and Remake by Tocco.

If you are building, researching, designing, investing in, manufacturing, regulating, or explaining something that helps the rest of us understand this moment, we would like to hear from you.

You can nominate yourself, recommend someone else, or send us a topic we should cover.

A recent example: Leon’s conversation with Tu Minh Tri, Cambridge and LSE alumnus and young Vietnamese political scientist, on what is happening in the world and how to think more clearly in unstable times.

Pitch a Guest or Join Us

Have An Industrial Problem We Should Look At?

Before we open MatterBrief more widely, we want to hear what is already breaking, blocking, or becoming urgent in your world.

Supplier risk, material substitution, regulatory deadlines, cost shocks, sourcing uncertainty, manufacturing bottlenecks, geopolitical exposure, hard-to-find technologies - send us the problem.

We are building Tocco to help industrial teams make sense of exactly these questions, using our network, research workflows, data, and AI-assisted tools.

Tell Us What You’re Trying to Solve

Further Readings · Material & Manufacturing News · 05.2026

(China 🇨🇳) China’s First All-Electric 10,000-Tonne Container Ship Enters Service. The Ning Yuan Dian Kun is now operating commercially on the Ningbo-Zhoushan to Jiaxing corridor. 742 TEU capacity, roughly 20 MWh battery power delivered through containerized battery packs, shore charging, plus battery swapping.

(Global 🌏) Less Than 1.7% of People Use 33% of Global Energy. A new article in Science breaks down the asymmetry. One third of final energy is consumed by only 1.7% of the population in the “excessive high energy consumption” category. While half of the world uses only 9%. Decent living standards require 13 to 18 GJ per capita per year. The average in Western Europe is about 100.

(USA - Europe 🇺🇸 🇪🇺) On May 1, President Trump announced plans to hike tariffs on EU-imported cars and trucks from 15% to 25%. He said at the White House, “We have a trade deal with the European Union. They were not adhering to it. So I ​raised the tariffs on cars and trucks to 25%, that’s billions of dollars coming into the United States, and it forces them to move their factory production much faster.” We previously discussed how tariffs didn’t work (at least, not the way President Trump wanted). Let’s see if this time will be different.

(Global 🎙️) In the latest episode of Long Game, Leon discusses his journey from a Chinese village with a $250 GDP per capita to travelling across 50+ countries, and his take on the extreme danger of algorithm-driven echo chambers, why democracies in declining economic cycles are vulnerable to populism, and societal-technological disruptions we are unprepared for. Available on YouTube, Spotify, and Apple Podcasts.

Five stories that matter this week:

1. Climate advocates in Europe are rejoicing, and I quote one from World Fund VC, “The Hormuz disruption is doing something that a decade of sustainability arguments never quite managed: it is making the business case for petro-alternatives impossible to ignore.” Besides this weird, joyful tone (mind you, it is a warzone with actual people dying, while millions of businesses are being affected), this is nothing close to a business-as-usual case.

   Speaking of electrification, electricity is only 23% of Europe’s total energy use. The rest: transport still runs on 92% fossil fuels, buildings on 71%, and industry on 61%. Worse, in 2024, 95% of oil and 88% of natural gas used in the EU were imported. Switching from Russian gas to US LNG doesn’t fix this, given the latest developments in the Middle East. The vulnerability is structural.
   Furthermore, the machines at the centre of Europe’s electrification (aka EVs, heat pumps, wind turbines, grid infrastructure, etc.) are built from critical minerals. And the supply chains for these are concentrated in a small number of countries that do not have the incentives to sell their resources to Europe easily. We break down this critical mineral supply problem in our latest premium piece, “Europe Electrification and the Critical Minerals Gap: What Is at Stake Before 2030” for those who want to see the full picture.

2. Speaking of structural vulnerability, within a window of thirty months, the Strait of Hormuz, the Panama Canal, and the Suez Canal have all been impaired or seriously stressed. Each disruption has left quite a lasting premium on ocean freight, marine insurance, feedstock pricing, and inventory costs. The World Bank calculated that the Red Sea crisis raised shipping costs 141% by the end of 2024, which is now a permanent addition to the global manufacturing costs.

   We wrote more extensively on these chokepoints and their economic implications in our premium piece, “The Hidden Tax on Industrial Manufacturing: Energy Chokepoints and What They Cost”. Inside, you’ll also find structural responses for businesses, as we believe these occurrences are no longer once in a blue moon.

3. Moving on to public policies, Laurence Tubiana, President and CEO of the European Climate Foundation, made an argument on April 23: a 20% surtax on the annual profits of the world’s 100 largest oil and gas companies would have raised $1 trillion since 2015. Instead, that money funded share buybacks and fossil fuel infrastructure, locking in the very dependence that leaves Europe exposed to crises. The European Commission’s emergency energy package, she says, falls short by not pursuing a “windfall profit tax” (i.e., one-time, higher tax rate levied on a specific company or industry that has benefited from a sudden, massive increase in profits without extra effort or investment of their own).
   Before we even discuss the effectiveness of this proposal, we have to look at the reality: under normal EU law, any proposal involving taxation requires the unanimous agreement of all 27 member states. By the time a levy is negotiated, the profits may have already moved. The ambition is right. The execution challenge is, as usual, almost immovable.

4. Speaking of ambitions, two stories landed in the same week on hydrogen. On April 16, Russia and China signed a memorandum to create the first cross-border “hydrogen corridor,” with plans for localized hydrogen production and refuelling infrastructure along major highways in the Far East. Days later, on April 21, UK-based startup Rivan Industries raised $34 million to build what it calls the “largest synthetic natural gas plant in Europe,” using a Sabatier reaction system that combines green hydrogen with CO2 captured directly from the air to produce synthetic methane, chemically identical to natural gas and supposedly injectable into the existing UK grid without modifications.

   commented on the latter, “Europe’s looming fuel shortage does what pitch decks failed to do recently: revive uneconomic hydrogen fantasies. Taxpayers are on the hook, of course.” Whether this is visionary infrastructure or expensive experiments (backed by strong political will), it depends on whether the tech and the economics work.

5. Speaking of closing the economics, on April 22, CATL announced it will begin mass production of sodium-ion batteries in Q4 2026. The batteries have completed verification and can support roughly 300 km of range in extended-range vehicles and 500 km in battery electric vehicles. Sodium-ion won’t replace lithium. The energy density sits at about 160 Wh/kg, making them better suited for vehicles priced below 100,000 yuan (around $14,660) or for energy storage. But the performance in extreme cold is striking: at -30°C, sodium-ion delivers nearly three times the discharge power of lithium iron phosphate batteries, retaining over 90% capacity at -40°C. CATL’s chairman Robin Zeng has said the technology could eventually capture 30 to 40% of the battery market. We previously covered CATL’s expansion beyond cells into automotive chips. The pattern for China's industrial competitive landscape is clear: develop a fully vertical stack. Read more on China’s New Five-Year Plan and/or the EV race in China to understand what that means better.

Enjoy your weekend. Stay sharp, and keep building.

Anh & Tri

On behalf of the Tocco team

Help Us Find The People Worth Listening To

The industrial world is becoming harder to read. Geopolitics, energy, regulation, AI, materials, manufacturing, and supply chains are now one connected story.

That is why we are expanding our conversations through Long Game with Leon Ge (available on YouTube, Spotify, and Apple Podcasts) and Remake by Tocco.

If you are building, researching, designing, investing in, manufacturing, regulating, or explaining something that helps the rest of us understand this moment, we would like to hear from you.

You can nominate yourself, recommend someone else, or send us a topic we should cover.

A recent example: Leon’s conversation with Tu Minh Tri, Cambridge and LSE alumnus and young Vietnamese political scientist, on what is happening in the world and how to think more clearly in unstable times.

Pitch a Guest or Join Us

Have An Industrial Problem We Should Look At?

Before we open MatterBrief more widely, we want to hear what is already breaking, blocking, or becoming urgent in your world.

Supplier risk, material substitution, regulatory deadlines, cost shocks, sourcing uncertainty, manufacturing bottlenecks, geopolitical exposure, hard-to-find technologies - send us the problem.

We are building Tocco to help industrial teams make sense of exactly these questions, using our network, research workflows, data, and AI-assisted tools.

Tell Us What You’re Trying to Solve

Further Readings · Material & Manufacturing News · 04.2026

(Netherlands 🇳🇱) Foamlab Raises €3M to scale production of high-performance foams made from bacterial cellulose. The round was led by Icos Capital, with participation from Capricorn Industrial Biotech Fund and others.

(Global 🌏) Metamaterials - the invisibility cloak never quite materialised. What did materialise is a $2.5 billion global industry growing at over 30% a year, building from smartphone cameras to satellite antennas. The gap between the original hype and the actual outcome is one of the more interesting stories in modern materials science.

(Spain 🇪🇸) Turning Sea Lettuce into Weavable Materials in Galicia. Biodesigner Paula Camiña Eiras is partnering with traditional basketmakers to turn sea lettuce, an invasive algae pulled from shellfish farms, into a weavable biomaterial.

(Global 🎙️) The Belgian CEO who spent 20 years inside China returns for round 3 with Leon, Tocco Founder. This time: why the Iran conflict might be “the Waterloo of America,” Europe’s shift from pragmatic statecraft to what he calls “hypocrisy”, the truth about the “China threat. Available on YouTube, Spotify, and Apple Podcasts.

1. On April 13, Texas Attorney General Ken Paxton launched an investigation into Lululemon over the potential presence of the “forever chemical” PFAS. The Canadian activewear brand generated over $11 billion in 2025 alone. The investigation will also look into the brand’s "restricted substances" list, testing protocols, and supply network practices to determine whether its products comply with Texas’s laws. Lululemon responded that PFAS were fully phased out of their products in 2023. As PFAS regulations continue to tighten globally, expect these investigations to occur more frequently across different jurisdictions. In case you want to dive deeper, we previously covered the PFAS ban globally and how to find alternatives, and also specifically the PFAS ban in packaging.

2. Speaking of sportswear, on April 5, we covered Allbird’s $39 million fire sale (while once valued at $4 billion). Only 10 days later, on April 15, their stock surged 582%, as the company announced its pivot to AI compute infrastructure. Allbirds, now NewBird AI, announced a deal to raise up to $50 million in funding, expected to close in Q2 2026. Given the unprecedented nature of this pivot and the AI fever globally, we are quite confident that the raise will be a success. The next question is: what will NewBird do with this money afterwards - as we rephrase Kanye West’s remark - we like some of Allbird’s shoes, what do they know about AI infrastructure?

3. Speaking of switching up, on April 14, Microsoft announced that it’s pausing all Carbon Dioxide Removal purchases for a “reassessment” of its portfolio. As a result, the CDR market it helped build is now on the verge of a shakeout. Industry voices say not to worry, since Microsoft accounts for only 25% of the total CDR market. Yes… and no? Losing a quarter of demand is quite detrimental to any market, especially one still trying to prove commercial viability. We previously covered biochar as a carbon removal instrument, as well as the failed precision fermentation industry, where too many startups depend on a handful of incumbent players for their commercialisation.

4. Speaking of dependence, the Hormuz blockade 50 days ago has added €22 billion to the EU’s energy bill. Experts argue that the dual energy crises for the EU (Ukraine and now Hormuz) will speed up the energy transition. It will, in the long run. In the short run, some industries cannot move that fast and still be very dependent. Examples are high-temperature process industries such as cement, steel, and chemicals. Our team will track more signals on this story in the weeks to come, especially on what it means for SMEs in Europe.

5. Speaking of pressure, diversification to “China +1” destinations - such as Vietnam - has been the new normal since Trump Term 2. Yet, supply chain rerouting is among the hardest puzzles to solve. This week, we focus on electronics and the consumer hardware industry, and explain how rerouting from China to Vietnam in this space has a lot of complications, yet is not impossible. You can download the report here if this is part of your world.

Enjoy your weekend. Stay sharp, and keep creating.

Anh & Tri

On behalf of the Tocco team

MatterDrop with more Samples available

Our team is quietly opening early access to MatterDrop - our new flagship product designed to change how industrial teams discover, compare, and request next-gen materials, supplies and manufacturing solutions.

Instead of jumping between supplier sites, trade shows, PDFs, and cold outreach, MatterDrop is being built as a more curated, higher-signal experience: digital pavilions organised by theme, with samples, brochures, and supplier access requestable in one place.

Application open now - grab your seat here

Grab your samples

(For teams with a concrete sourcing need, we are also opening the first buyer brief requests. Submit a brief by writing to product(at)tocco.earth)

Further Resources · Material & Manufacturing News · 04.2026

(Global 🌏) VOC-Free Coatings: What’s Available? VOC-based coatings are being regulated out of the EU and the US market. If you’re in coatings, paints, or surface treatment, get your list of VOC-free alternatives currently on the market.

(Global 🌏) 10 Brands Using Monomaterials to Watch. From The North Face and Puma in apparel to Polestar and XEV in automotive, here are ten brands and their monomaterial product design that our team has tracked. Did we miss out on notable products? Let us know through comments or email reply.

(Global 🌏) In case you missed it - we discussed the Charts of The Week and dived deep on Trading & Sourcing, with analysis on what we called “extra industrial taxes” and on how to deal with fickle trade partners.

(Global 🎙️) Sven Agten came back with Round 2 in the Long Game Podcast with Leon Ge. The Belgian CEO discussed why the Iran conflict might be “the Waterloo of America” and the industrial trends defining the next 20 years. Episode available on Youtube, Spotify, and Apple Podcast.

Share FutureMatters by Tocco

In our own materials/manufacturing/industrial world, fundamental changes are also happening. The industrial formula used to be straightforward: minimise unit cost, stretch your supply chain across the globe, and assume that lanes stay open and energy is stable.

That math is now being challenged by a chain reaction of the 3 following events.

1. Several chokepoints → supply chain rerouting

The industrial world has been closely monitoring the closure of Hormuz since February 28. The first impact has been observed: oil prices surge, then raw materials and feedstock prices surge.

In the study “The Cost of Closing the Strait of Hormuz: Energy Bottlenecks and Global Food Security”, researchers from Kiel Institute for the World Economy (Germany) stated that “A prolonged closure allows some market adjustment, but structural damage persists - and the timing during peak Northern hemisphere planting season compounds the food security risk.”

Interestingly, researchers from Kiel stated that “At every point in the value chain, some substitution is possible, which is precisely why the long-run scenario shows smaller effects.” This is what we call the Dangerous Calm of Hormuz - where the structural cost of rerouting supply chains will settle in the next 2 to 6 months.

Yet, rerouting supply chains is much more complex, given other complications elsewhere. The Bab-el-Mandeb Strait / Red Sea crisis due to Houthi attacks on commercial vessels has rerouted global logistics since late 2023. Despite a reduction in attacks in 2025, thanks to ceasefire arrangements, traffic through the Red Sea and Suez Canal remains below pre-crisis levels: transits in 2025 fell to around 35–40% of 2023 volumes, and Suez Canal traffic in early 2026 remains around 60% lower. The Cape of Good Hope is now the new route for Asia-Europe freight, which means +10 to 14 days, and +20-30% fuel consumption.

On April 9, Time reported that Iran is considering restrictions on the Bab-el-Mandeb Strait again, amidst negotiations with the Trump administration.

2. Tighten Regulations: Extra industrial taxes → thinner margins

On April 7, 2026, the European Commission published the first official CBAM certificate price, €75.36 per tonne of CO2 for Q1 2026. The CBAM definitive phase began on January 1, 2026, covering iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity, but certificate purchasing starts in February 2027.

Who is winning and losing with CBAM?

From 2026, free allocations under the EU ETS (Emission Trading System) are being phased out. By 2031, European producers will pay for roughly 64% of their scope 1 emissions out of pocket (see the chart above). What CBAM does is ensure non-EU exporters face the same trajectory at the border. Without it, cheap, carbon-heavy imports would undercut producers already paying into the system. So European producers do get protection from foreign competition and a rising cost burden at the same time. The playing field levels - but at a higher floor for everyone.

3. Fickle Trade Partners vs Calm Ones → Certainty is the New Currency

In trading, the most important thing is trust.

And it is not easy to trust a trade partner that unilaterally imposes “reciprocal” tariffs with no notice, and on another random Monday, self-imposed an online feud with Pope Leo XIV, head of the Catholic Church. (The list could be much longer, but was kept short for the sake of noise reduction.)

When facing such a trade partner, one naturally will diversify and look for calmer, more predictable ones. From April 11 to April 14, Spain’s PM Pedro Sanchez paid an official visit to China, the 4th time within 4 years, as he sought to "narrow Spain’s trade deficit of nearly $50 billion with Beijing. The exact measures are to be communicated.

On April 14, General Secretary of the Communist Party of Vietnam (CPV) Central Committee and State President To Lam arrived in Beijing, beginning the state visit to China. Key areas of discussion will include trade, investment, supply and production chains, education & training, and science & technology.

In an increasingly uncertain world, certainty and trust are the new currency of trade and collaboration. Not cost, not trade volume.

This is what our team believes in.

And we do our own effort of building trust in our global network of material and manufacturing.

Our effort of trust building: Verified Buyers matching with Verified Suppliers

Instead of bouncing between supplier sites, trade show floors, PDFs, and cold outreach - none of which truly build trust and certainty - MatterDrop is being built as a more curated, higher-signal experience: curated material themes, with available samples, brochures, and supplier profiles available in one place.

Every week, “fresh” new sample (and/or brochure) Drops of the Week are made available to MatterDrop’s approved early users.

Access is opening gradually. The first wave is intentionally limited. Application open now. Check out to claim your free (verified) samples.

Get Your MatterDrop Pass

A Step Further ⋅ Private Executive Immersion into China’s Industrial Frontiers

If China is part of your strategic horizon, the natural next step is FutureMade China - a private, curated, executive immersion for those who want to see the terrain directly.

The current concept for the next cohort is a 5-day route through Beijing, Suzhou, Shanghai, Nantong and beyond, designed for founders, investors, and senior operators seeking direct access to China’s industrial frontier across advanced manufacturing, robotics, AI, biomanufacturing, industrial policy, and the systems shaping what comes next. Applications are now open for the June and October 2026 cohorts.

Take a Sneak Peek here

FutureMade is not a tour. It is a private executive immersion into China’s industrial frontier. Each cohort is intentionally kept very small to preserve the quality of access, conversation, and fit.

Even More Resources for You

• (Global 🌏) “Sourcing Electronics from China and Vietnam in 2026”, a report by Tocco on consumer hardware, PCBs, and EV batteries across both countries, with verification procedures, tariff analysis, and risk & compliance checklists for procurement teams.

• (Global 🌏) “The New Twin Fossil Shock”, a report by Ember on “how the energy crises of the 2020s speed up the electric age”. More developments to be observed still - we keep a close look at this in the next quarters.

• (Global 🌏) Top 10 Brands Embracing Monomaterials in 2026. Monomaterial design is moving to a compliance requirement; our team looks at 10 brands across industries that have started to make the shift.

• (US 🇺🇸) John Deere to pay $99 million in a right-to-repair lawsuit. The tractor maker is paying for its years as the central opponent of right-to-repair. Consumer advocates say it’s still not enough.

• (China 🇨🇳) China to ban Sulfuric Acid exports as War hits supply. Sulfuric acid is both produced by smelters and consumed in the mining industry

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Four stories that matter this week:

1. On March 30, Le Monde wrote this piece about a young French researcher who concluded that ‘Climate change will cost 50% of GDP by 2100’. Commentators explained that this mathematical formula is better because, instead of measuring climate damage using local thermometers, it looks at global temperature, oceans included.
   Your grandma at this point would say, “Thank you, Captain Obvious”. She would also continue to say how arrogant we are to think we could fully model the global climate. Inward, we cannot yet model the human body and its trillions of interactions with full accuracy. Outward, we cannot yet model a single forest ecosystem and how it acts as a carbon sink, nor the inner workings of its mycelium network alone.
   Does that mean we should give up? Certainly not. On the contrary, we should very much continue to map out the unknowns, while self-reminding that any oversimplification is oftentimes a lie. We talked about this with the case of Biochar or previously Plastic Credits, and how they are likely to only serve as financial instruments for now.

2. Speaking of oversimplification, the precision fermentation startups sold a beautiful story: lab-grown dairy and proteins on an industrial scale. The science indeed worked well in a 10- or 50-litre bioreactor.
   Between 2020 and 2022, they raised billions of dollars, and started looking for a contract manufacturer that could run the process at 10,000 or 50,000 litres. This is where most of them failed.
   The world has enormous fermentation capacity, but most of it is configured for pharmaceuticals, ethanol, or established industrial enzymes. Food-grade precision fermentation requires specific equipment and regulatory clearances. Plus, large incumbent ingredient companies - ADM, Cargill, DSM-Firmenich - have very little incentive to lease their infrastructure cheaply to startups trying to disrupt their core business.

   This stalemate will continue to be the status quo in Europe and North America for now. Another model is observed in China, with a more top-down approach but cannot be replicated easily. We’ll continue to report on this space in the next few years.

3. Speaking of going from lab to grid, Denmark is to build the world’s first green ammonia plant powered entirely by wind and solar. The plant is to produce over 5,000 tonnes of green ammonia annually, preventing 8,200 tonnes of CO2 emissions per year. Green ammonia has been highlighted as a candidate to decarbonise international shipping (currently accounts for around 2% of global energy-related CO2 emissions). The challenge remains cost: green ammonia is still significantly more expensive than its fossil-fuel equivalent.

4. Speaking of expensive-ness, on March 27, Toray Industries announced emergency surcharge pricing on performance chemicals, carbon fibre composites, and fibres and textiles - citing soaring crude oil and naphtha costs from the Hormuz disruption. The surcharge is framed as temporary, but Toray is also accelerating supply chain restructuring and diversifying sources for the medium term. Toray is not the only one impacted. Expect Hormuz and the new extra “industrial tax” as a new normal in 2026. We’ll report on this story weekly, so that teams can prepare accordingly for their quarters.

Enjoy your weekend. Stay sharp - and keep building.

Anh
On behalf of the Tocco team

MatterDrop is now opening Early Access

Our team is quietly opening early access to MatterDrop - our new flagship product designed to change how industrial teams discover, compare, and request next-gen materials, supplies and manufacturing solutions.

Instead of jumping between supplier sites, trade shows, PDFs, and cold outreach, MatterDrop is being built as a more curated, higher-signal experience: digital pavilions organised by theme, with samples, brochures, and supplier access requestable in one place.

Access is opening gradually. We are keeping the first wave limited so the experience stays sharp, the curation stays strong, and the earliest users are people who will actually use it. Application open now - grab your seat here

Apply for early requester access

(For teams with a concrete sourcing need, we are also opening the first buyer brief requests. Submit a brief by writing to product(at)tocco.earth)

Further Readings · Material & Manufacturing News · 04.2026

(Global 🌏) Monomaterials in Packaging - Regulators are pushing for monomaterial structures that can enter existing recycling streams. The manufacturing shift isn’t trivial (same-plastic structures melt at the same temperature, requiring precision sealing equipment), here’s a quick look.

(Global 🌏) Sourcing in This Economy? Charts of the Week are here: 1/ China still dominates global sourcing. 2/ US tariffs on Chinese exports hit 47.5%. Buyers shifted volumes to Vietnam, but 3/ Vietnam’s imports from China have nearly tripled since 2017. The supply chain moved; the dependency didn’t. If this is your space, download our free Guide to Sourcing in China & Vietnam 2026.

(Global 🌏) A small note on things that didn’t happen - only on social media. Hundreds of posts claimed that Singapore had installed “vertical panels filled with living algae” along major roads to improve air quality. If one stops and wonders, why would a tropical country generating an extraordinary amount of biomass - for free - need panels made of imported materials, powered by a grid that’s 93.1% natural gas for air quality? As Gen Z would say, “the math is not mathing”. Same vibe, viral posts about Balenciaga making “cardboard clothing” are also fake. Beware, AI-generated posts are meant to bait you into engagement with the posts. If you argue, chances are you’re arguing with a bot. Stay calm, and direct your attention to the right signals.

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If it were 5 years ago, we collectively could have paid more attention to this.

But as the Gen Z told us to “read the room”, one simply has very little attention left for this great Moon endeavour, while a lot else is at stake on Earth.

In our own world of materials, manufacturing and procurement, the stakes include unstable tariffs, supply chain chokepoints (such as the Hormuz shutdown), changing regulations, loss of manufacturing competitive edge in Europe or the U.S., to name a few.

Among all of these angles, procurement and sourcing are definitely at the frontline. And this week, we want to focus on packaging sourcing in China and Vietnam.

Now, not everyone sourcing today is buying from China and Vietnam. But it would also be quite dishonest to pretend those two countries do not still sit at the centre of an enormous share of global sourcing decisions, directly or indirectly.

Here are 3 important datapoints for you:

Sourcing in China & Vietnam since Trump Term 2

1. China dominates global sourcing 2020-2024

North American and European buyers still source the overwhelming majority of their goods from a handful of countries - namely China, Vietnam, India, and Bangladesh. Among these, China is the backbone of global supply chains for physical goods.

2. Tariffs changed the math in 2025

Then came the tariff escalation. What started under Trump Term 1 crept up gradually - but Trump Term 2 sent rates spiking to levels that made business-as-usual untenable. US tariffs on Chinese exports hit 47.5%. China retaliated at 31.9%. The cost of doing business through traditional channels changed dramatically and fast.

3. Diversification from China that isn’t really diversification in 2025-2026

Buyers responded by shifting volumes - primarily toward Vietnam. On paper, China's share fell. But look more closely: Vietnam's imports from China have nearly tripled since 2017, and a growing share of those imports is Chinese value-added being re-exported to the U.S (and to some extent, Europe). The supply chain moved, but the dependency didn't.

To some analysts, this sourcing story is fascinating from a purely intellectual point of view. But we, people on the ground, know the enormous hassles and challenges of navigating this. Our team has pulled together a quick Guide to Sourcing in China & Vietnam 2026 - Packaging Edition, and we’d love to give it for free for the next 72 hours to those who actually need to navigate this environment.

Download: Guide to Packaging Sourcing in China & Vietnam 2026

The guide is designed for packaging procurement teams in particular, but the broader logic applies much more widely. You’ll see:

• China remains the deepest and most diversified manufacturing base for packaging globally. This is where the compounding effect happens: automation, tooling speed, component density, and access to materials.

• Vietnam, by contrast, has become increasingly attractive in labour-intensive packaging categories and certain paper-based formats, helped by materially lower labour costs.

But (there is always a “but”) - Vietnam is not a frictionless replacement for China. In most cases, it is better understood as part of a complicated China+1 reality - where skills gap and the lack of a full supply chain will affect lead time and eat up margins. Download the Guide for full analysis.

Download Our Guide

Free for the next 72 hours. After that, the guide returns to its full-access status.

A Step Further ⋅ Private Executive Immersion into China’s Industrial Frontiers

A report can give you a map. It cannot replace being in the room.

If this topic is close to your work, and if China is part of your strategic horizon, the natural next step is FutureMade China - a private, curated, executive immersion for those who want to see the terrain directly.

The current concept for the next cohort is a 5-day route through Beijing, Suzhou, Shanghai, Nantong and beyond, designed for founders, investors, and senior operators seeking direct access to China’s industrial frontier across advanced manufacturing, robotics, AI, biomanufacturing, industrial policy, and the systems shaping what comes next.

For those making meaningful sourcing, manufacturing, investment, or market-entry decisions, the more valuable move is often to see the landscape first-hand, with context and access that are difficult to assemble alone. Applications are now open for the June and October 2026 cohorts.

Apply For Invitation

FutureMade is not a tour. It is a private executive immersion into China’s industrial frontier. Each cohort is intentionally kept very small to preserve the quality of access, conversation, and fit.

Even More Resources for You

• (Global 🌏) It’s an understatement to say that Packaging Regulations are complicated. It is nightmarish. Download The Global Packaging Compliance Handbook for 2026 - we talk about packaging regulations across 5 regions and 120+ distinct legislative updates (took us a while to do this, as you can imagine).

• (China 🇨🇳) To understand the 5 major industrial hubs of China and how this density drives the speed up and the cost down, download available on China Manufacturing in 2026, prepared by our team in China.

• (Vietnam 🇻🇳) Arguably one of the “hottest” places right now in terms of economic growth, our team in Vietnam created a map of two manufacturing corridors in Vietnam for those who are curious about what they can do here in the next 5 to 10 years.

• (China 🇨🇳) China’s New Five-Year Plan, according to Leon, Tocco’s Founder, is probably the most important industrial document of 2026. Not reading it when you want to work with the ecosystems, is a grave mistake. You can read his analysis here.

• (Vietnam 🇻🇳 and Global 🌏) For those who love Podcasts, Leon sat down with Tu Minh Tri, a Cambridge political scientist from Vietnam, to discuss the collapsing global order, Vietnam’s rise, and more. Available on Youtube, Spotify and Apple Podcast.

• (China 🇨🇳 and Global 🌏) Still a Podcast, Leon this time chatted with Sven Agten, a Belgian CEO who has spent 20 Years Inside China. They discussed China’s development, Europe’s recent economic decline, and the future of the global economy. Available on Youtube, Spotify and Apple Podcast.

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Five stories that matter this week:

1. EIT Manufacturing, the EU-backed body tasked with digitising Europe’s industrial base - filed for liquidation on March 27.
   Over 200 companies are now waiting for the grants they were promised, half of them SMEs and startups. EIT Manufacturing ran grant programmes ranging from €50k to €500k since its launch in 2019. Its funding was frozen in 2024 after the European Anti-Fraud Office found “serious irregularities.” A €163 million lifeline was approved last October 2025, yet in February 2026, another investigation came as “irregularities went well beyond those identified initially”. At the same time, the EU’s proposed 2028–2034 budget makes no mention of the EIT.
   Leon, Tocco’s Founder, warned March 25 (two days before EIT Manufacturing’s announcement), that if Europe wants to succeed in the great reindustrialisation, it first needs to look into the abyss.

2. Speaking of broken promises, Allbirds, once valued at $4 billion, just agreed to sell its IP and most of its assets for $39 million. The company built its brand on the idea that consumers would pay a premium for sustainably made products. Analysts argued that the Allbirds case showed once again that sustainability comes well behind style, price, and comfort in the buying decision.
   We wouldn’t jump to that conclusion that fast, as there are so many ways to die in business. What we know for sure is that Allbirds has lost its competitive edge over the years - and its loyal customers have moved on to On and Hoka. With nothing to hold on to, its shares have lost 95% of their value since the IPO.

3. Speaking of demand shifts, the Trump administration eliminated the $7,500 federal EV tax credit at the end of September 2025, leading to these EV lines being cancelled: Ford's three-row electric SUV, the Maserati MC20 Folgore, and sedans from Nissan and Infiniti. Porsche's flagship electric K1 is being reworked with combustion and plug-in hybrid powertrains instead, while Honda just pulled its US EV projects entirely (Data as of March 27).
   On April 3, Leon wrote an analysis on the US Manufacturing scene and how it does not have a skill gap problem, but a bad business model problem. The latter is much less discussed, perhaps because it’s much tougher to solve?

4. Speaking of tough problems - two chemicals widely used to make plastic more flexible - DEHP and DiNP - are linked to nearly 2 million premature births and 74,000 newborn deaths worldwide in 2018, according to a new study led by researchers at NYU Langone. These are phthalates - so-called “everywhere chemicals” found in children’s toys, food packaging, vinyl flooring, medical devices, and personal care products.
   If you work in materials or product development, this is the kind of crucial data that moves regulation forward - and the researchers are explicitly calling for limits in a global plastics treaty.

5. And one for the regulation shelf: on March 30, the European Commission released its official guidance document on the Packaging and Packaging Waste Regulation - the PPWR. This is the implementation layer: how the PPWR actually applies to your business, your packaging formats, your compliance timelines.
   We’ve put together a full set of resources: our PPWR implementation guide, a visual roadmap (aka deadlines), and an overview of Extended Producer Responsibility in the EU.

Enjoy your weekend. Stay sharp - and keep building.

Anh
On behalf of the Tocco team

FutureMade 2026 · Expedition to China’s Industrial Frontier

If China is part of your strategic horizon, you might want to pay close attention to FutureMade. The next cohort is being shaped as a 6-day route through Beijing, Suzhou, Shanghai, Nantong, and beyond for leaders seeking direct access to operators, founders, industrial leaders, and policy voices across advanced manufacturing, robotics, AI, biomanufacturing, and the systems shaping what comes next. Applications are now open for this year.

Apply For Invitation

FutureMade is not a tour. It is a private, curated executive expedition into China’s industrial frontier, limited to a very small cohort to preserve the quality of access, conversation, and fit. Applications are reviewed on a rolling basis.

Further Resources · Material & Manufacturing News · 04.2026

• (US 🇺🇸) Goldman Sachs’ chief economist says AI contributed “basically zero” to US GDP growth in 2025. The reason: much of the AI hardware investment flows to the Taiwanese and Korean GDP, not American. Goldman still projects AI could raise US labour productivity by 15% when fully adopted - but a measurable GDP impact isn’t expected until 2027 at the earliest. Heavy investment, not yet heavy returns.

• (Vietnam 🇻🇳 and Global 🌏) For those who love Podcasts, Leon sat down with Tu Minh Tri, a Cambridge political scientist from Vietnam, to discuss the collapsing global order, Vietnam’s rise as a new manufacturing hub and more. Available on Youtube and Spotify.

• (China 🇨🇳 and Global 🌏) Still for Podcast lovers, Leon this time chatted with Sven Agten, a Belgian CEO who has spent 20 Years Inside China. They discussed China’s development over the last decades, Europe’s recent economic decline, and the future of the global economy. Available on Youtube and Spotify.

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