Webinar Notes: Trade Wars & Supply Chains: Measuring and Managing the Impact
These webinar notes are based on an April 26th webinar presented by Resilinc and Hogan Lovells and hosted by Supply & Demand Chain Executive Magazine. Here is the link to the on demand registration page.
As I mentioned in my weekly webinar recommendations post, I trusted S&DCE as the host of this event because I’ve seen them cover equally ‘hot button’ topics with balance and a high degree of professionalism in the past. This event was no different – in fact, Resilinc CEO & Founder Bindiya Vakil opened the webinar by making the comment that the topic would be handled as a business issue – not a political one.
That said, dealing with tariffs is highly complex, and as Hogan Lovells’ Robert Kyle said, shifting supply chain conditions should be considered the new normal.
The focus of this webinar was the trade imbalance between the U.S. and China, $135bn in exports from the U.S. to China and $482 bn in the opposite direction. For an interesting visualization of U.S. Trade Balances, visit MIT’s Observatory of Economic Complexity (cited during the webinar).
My primary take aways are as follows:
- Don’t get distracted by the hype: One of the first points made in the webinar is that there is no trade war under way. Instead, there are a series of proposed tariffs on both sides that affect a range of products. Know the difference between which tariffs have officially be enacted and which are proposed, and which specific products are affected – not just high level product categories.
- There are a number of trade programs currently being negotiated around the globe (e.g. tariffs with China, NAFTA, TPP). None of them can be addressed in a vacuum as the status of each one affects the timing and conditions of the others. Instead, think of volatility and the need for flexibility as the new normal and prioritize them in contracts and supplier relationships.
- Neither the U.S. nor China ultimately wants a trade war, especially a protracted one. That said, because China already placed tariffs on such a significant portion of U.S. imports and the U.S. levies very few, the U.S. can place a number of new tariffs while China will have to change different conditions (such as permitting) in order to respond.
- Invest in supply chain mapping. Know where your tier 1 and tier 2 products come from. Have alternate sources identified and pre-qualified and know how long it will take to migrate sources if it should become necessary.
- Even the best supply chain managers and analysts are not geopolitical experts. Get help where you need it and understand the full range of available options.
This was an excellent presentation. Kudos to the team for highlighting important issues related to tariffs.