Recovery crews are still looking for four construction workers who were on the Francis Scott Key Bridge, the Port of Baltimore’s business has been put on hold, and a major traffic artery into and out of the city has been cut off.

In the wake of the disaster, other cities are wondering if it could happen to them. Given the sad state of America’s infrastructure, that’s the right question to be asking, according to a weekend report from the Associated Press.

A Bridge Too Far

Ships crashing into bridges are fairly rare events — from 1960 to 2015, there were 35 major bridge collapses worldwide due to collisions from a ship or barge, and 18 of those occurred in the US, according to the World Association for Waterborne Transport Infrastructure. The incident in Baltimore is just the latest in a growing list of recent infrastructure breakdowns and near-misses in the US.

Late last year, Rhode Island unexpectedly shut down traffic on a bridge over the Seekonk River on Interstate 195, and earlier this month the state’s governor announced the bridge would have to be destroyed and rebuilt. And in 2022, federal investigators found that inspectors failed to recognize the severity of structural corrosion on a Pittsburgh bridge that collapsed, causing several injuries.

While the Baltimore bridge was rated as being in “fair” condition after its most recent federal inspection, the disaster is certain to intensify scrutiny on the US’ most vulnerable infrastructure:

• The American Road & Transportation Builders Association (ARTBA), a trade group, says one out of every three bridges in the US, or 6,100 miles worth of bridge, needs repairs or to be replaced.
• The Infrastructure Investment and Jobs Act (IIJA) of 2021 dedicated $40 billion to bridge repairs over the next five years. Still, the ARTBA estimates the real price of fully modernizing America’s crossings at as much as $320 billion.

It’s a Public-Private Conversation: The $1.2 trillion IIJA spending package is out of character for Washington. Relative to other developed countries, the US invests very little — just 0.5% of GDP annually, according to the Organization for Economic Cooperation and Development — on infrastructure development. Meanwhile, China spends almost 5% of its GDP on infrastructure. 

In his latest letter to shareholders, BlackRock CEO Larry Fink argued public debts are “just too high” for governments to go it alone. He touted the success of Global Infrastructure Partners as a model for public-private partnership, noting it increased runway capacity and introduced ideas like oversized luggage trays for faster security checks after acquiring London’s Gatwick Airport. Of course, BlackRock just acquired GIP in January for $12.5 billion, so there’s some motivated reasoning in Fink’s public-private praise.

Will AI be to Mexico what the iPhone was to China? 

As US industry strategically uncouples from China, several tech heavyweights in the AI hardware game are urging Taiwan-based contract manufacturers to move production facilities to Mexico, a comfortable 7,700 miles from Beijing, according to a Wall Street Journal report this weekend.

It’s Fun to Stay at the USMCA

The last time major advancements in consumer technology spurred a manufacturing boom, when the iPhone debuted in 2007, much of the production process ended up centralized in China. This time around, with the rush of AI requiring all new specialized hardware, US tech players are attempting to re-draw the battle lines — especially amid increasingly protectionist policies. They have a new policy ace up their sleeve: the US-Mexico-Canada Agreement (USMCA), a free trade deal signed in 2020 that makes relocating manufacturing to Mexico much more attractive.

North American countries “hope to replace products imported from Asia as much as possible,” James Huang, chairman of the Taiwan External Trade Development Council, told the WSJ. “Based on this consensus, Mexico is poised to become the most important manufacturing base for the USMCA.” 

As the dawn of the AI era begins, the impact of the USMCA is already being felt:

• Hewlett Packard Enterprise and Dell, two major server manufacturers, have already asked certain suppliers to relocate some cloud computing production to Mexico, sources told the WSJ. Taiwan-based Foxconn, the world’s largest tech contract manufacturer, already has Mexico-based facilities producing AI servers for Nvidia, Google, and Amazon, sources also told the WSJ.
• In fact, Foxconn says it has invested $690 million in Mexico in the past four years, and Taiwanese officials now estimate there are more than 70,000 people in Mexico employed by around 300 Taiwanese firms. Last year, two-way trade between the two countries topped $15 billion, according to the Mexican government.

Last year, Mexico-made products accounted for more than 15% of US imports, besting China’s nearly 14% for the top spot. In 2015, China accounted for 21.5% of such imports.

Not So Fast: The shifts in business relationships have not gone unnoticed in Beijing, whose President Xi Jinping has launched a major charm offensive. This weekend, he hosted over a dozen high-profile US business leaders to persuade them to continue investing in the country. We looked, but no one posted anything on TikTok. 

SpaceX isn’t the only Elon Musk company producing spectacular fiery explosions. 

Investment firm Fidelity has once again cut the value of its Blue Chip Growth Fund’s position in X, née Twitter, according to a report posted Saturday listing the fund’s holdings. The firm now implies a 73% loss in valuation for the platform since Musk’s $44 billion acquisition in October 2022. 

X Marks the Flop

Earlier this month, sources told Bloomberg that a bank group led by Morgan Stanley held talks with the world’s sometimes richest man about refinancing the roughly $12.5 billion debt package employed in his take-private. Fidelity, which also aided Musk in his takeover while gaining a stake in the company in the process, has had a front-row seat to the site’s tanking value as well.

Saturday’s report, which tracked the Blue Chip Growth Fund’s performance in February, marked the value of the firm’s X stake at 5.7% lower than a month prior. The overall stake is now worth around $5.3 million. The devaluation is likely a reflection of X’s still-struggling ad business:

• X generated around $2.5 billion in ad sales last year, sources told Bloomberg in December, falling short of a $3 billion internal goal. In 2021, Twitter reported $5 billion in ad revenue.
• That makes X one of the few stragglers in an otherwise strong social media ad sales market. Last week, industry group Magna projected social media ad revenue to grow 14% in the US this year, past the $80 billion mark.

U-Turn: Musk’s problems aren’t isolated to his social media company. Tesla, which reports first-quarter earnings in a couple weeks, is hitting roadblocks, too. Its share price has plummeted 29% through the first three months of the year, making it the worst performer in the S&P 500, and bearish analysts are expecting delivery figures in the quarter to fall short of what they were a year ago. Dress appropriately. We’re anticipating a Muskian tweetstorm.