Shifts in supply chains are becoming more common as the tit-for-tat tariffs imposed between the US and China continue on without an end in sight. And China and the US are not the only countries imposing increased tariffs as well as non-tariff barriers to trade. Other countries that have a history of higher tariffs and non-tariff barriers to trade, may also be looking to make trade policy adjustments in order to adapt to the changing trade landscape.
How should suppliers respond?
Both China and the US and other governments have relatively quick processes in place for imposing new tariffs , however, most product suppliers need time to assess their options and re-plan their manufacturing processes and supply chains in order to respond to these measures and avoid the higher duty rates. Similarly, governments can also nimbly remove the higher tariffs, but product suppliers often have supply chains that cannot be changed as quickly and they need to determine the risk associated with creating new supply chain routes. It is not just product suppliers who are impacted. New tariffs disrupt many businesses in the supply chain and impact decisions made on product sourcing, routes to market and manufacturing.