Trump, trade and logistics

Trump has been on Twitter and elsewhere saying he will continue to escalate his fight with China and its leadership has warned that it is prepared to react. This week Trump threatened $200 billion in tariffs on Chinese goods. We may soon see a full-scale trade conflict between the two nations and if we do you can expect it to impact economies big and small around the globe.

So how will all of this impact the supply chain and the logistics market? Recently, a German logistics think tank, ‘Logistikweisen’, asked community experts exactly that question. Their survey found that many believe:

• The current trade imbroglio has had only a limited impact on just a few products and industries and remains manageable. That may change though as Trump and China forge ahead. Today’s supply chains are highly integrated and cross-linked, and a long-term showdown will take its toll.
  
• How individual businesses are affected depends on where they do business, who they do business with and their own competitive position. The members surveyed felt that a company’s global footprint will ultimately matter in this environment though exchange rates may factor more than ever into a firm’s bottom line. For example, a weakened RMB may compensate somewhat for any increase in taxes.
  
• Supply chains, though robust and stable now, will become more difficult to manage as the trade war digs in. That could mean an imbalance in capacities and situations where companies see a surplus of some products and a shortage of others. 
  
• And finally, the members felt that all of this will lead to a growing uncertainty in the stability of the economy and a fall in economic outlook. That will lead to reduced investments and a skittish consumer.