China Tariffs – Now What?

There is no end in sight for the tensions between the U.S. and China: the latest developments shows neither Trump nor Chinese President Xi Jinping are willing to back down:

“The U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” said Trump in a tweet on August 1^st, 2019.

Many manufacturers and supply chain partners are running into “now what” challenges, being caught on a “changing horses in mid-stream” scenario.

So, what should you do? Many discussions and considerations are being analyzed across the country.

Few steps companies can take now to minimize any negative effects from China trade tariffs later:

1. Start With The Big Picture

Before making any changes, analyze the import data from the Automated Commercial Environment system (ACE). Next, look into the Harmonized Tariff Schedule (HTS): not all products shipped from China necessarily originate from there.

2. Find Alternatives To Your Current Supply Chain Partners

Most companies tend not to reconfigure your supply chain: it is a challenging task, mainly when you’ve established a rate and consistent rhythm with your current partner. However, “drastic times call for drastic measures”, mainly if there is no sight for this deadlock to be over.

3. Rethink Technology In Your Product Design & Development

Changing suppliers and locations isn’t the only solution. It’s also possible to “stop needing” something that you can only get from China: this might be a good time to redesign and rethink your entire supply chain and consider alternative components while maintaining product quality. Since tariffs are sure to affect emerging technologies, such as artificial intelligence, companies must decide which innovations they want to make a priority.

How can Argos Global Partner Services help?

Argos Global Partner Services can help your company find excellent alternatives: from domestic to smaller partners, we’ll make sure they’ll be a good fit in terms of meeting production deadlines, guaranteeing quality control measures, and timely communication.

While the new tariffs may be forcing companies in new directions, diversifying supply chains is advantageous for global companies regardless of the trade climate as it enables them to strategically maneuver within the global marketplace.

This, in turn, can afford significant protection to their supply chains from the effects of natural disasters, geopolitical turmoil, and economic upheaval.

U.S. consumer-goods companies that are currently trying to move away from China-based manufacturing facilities have viable options.

After all, some of the challenges resulting from China tariffs can translate to competitive advantages for American businesses.

Source: http://www.supplychain247.com/article/us_china_tariffs_consider_changing_your_supply_chain

https://www.china-briefing.com/news/the-us-china-trade-war-a-timeline/