The tariff situation changes rapidly. As of today, the Trump administration has imposed about $250 billion in tariffs on imported Chinese products due to China’s intellectual property practices. China has retaliated by placing $110 billion in tariffs on US products.This latest round of tariffs will add another $500 a year in costs for the average American household. - Katheryn Russ, Professor Economics, University of California at Davis Click To Tweet
Companies carefully make expensive and strategic decisions about location and sourcing, invest millions of dollars in technology to help optimize their supply chains, and then…. with a few strokes of a pen, tariffs turn these decisions upside down and impose massive new costs on companies and consumers.
What can companies do to reduce costs and insulate themselves from risk in these turbulent times?
It doesn’t make sense to simply reverse previous decisions as trade regulations can evaporate or change on a whim.
Instead, companies can look at ways to economize without compromising service levels, and to focus on developing superior agility and resilience to weather the trade war. A real-time, digital network provides rapid access to information, the ability to plan, execute and collaborate with global business partners, and much more.
According to Deloitte’s report, “Building Business Resilience to the Next Economic Slowdown”:
“Empirical evidence shows that organizations that establish and leverage an external network are also more resilient to challenges and shocks… Furthermore, collaboration among organizations within a network increases the resources that can be tapped and therefore the capacity of each individual company to respond.”
Read Streamlining Global Trade in Global Trade magazine (PDF) to learn how companies can leverage business networks to digitally transform and achieve greater agility, efficiency and resilience in global trade.
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- Supply Chain Trends 2021 - November 19, 2020