Tariffs Shake Up the Supply Chain

Tariffs Shake Up the Supply Chain

December 9, 2018

U.S. tariffs on $200 billion of Chinese goods may lead to a permanent relocation of manufacturing companies from China to other Southeast Asian countries.

Some American businesses are looking at relocating manufacturing facilities to places like Thailand or the Philippines.  Some Chinese companies are also considering opening up operations outside their homeland.  One such business may build a massive tire factory in the Philippines to avoid U.S. tariffs.

Some speculate that the tariffs may lead to significant and permanent changes in the global supply chain.  Interestingly, however, Chinese exports were up by almost 16% in October, the first full month of tariff implementation, with companies rushing to send goods to the U.S. before the tariffs rise from 10 percent to 25 percent at the end of the year.

Video Spotlight: China’s exports are still soaring despite the trade war

This post is based on the Industry Week post, Manufacturing exit from China to dodge U.S. duties gains pace, by Angus Whitley, November 7, 2018, and the CNN article and video, China’s exports are still soaring despite the trade war, by Daniel Shane, November 8, 2018. Image source: Shutterstock / Nerthuz.

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