In recent weeks, the United States has proposed, enacted, and paused (some) tariffs that have caused uncertainty in global supply chains. As policies shift, businesses worldwide must make complex decisions based on rapidly changing constraints. These tariffs have dominated the news, becoming a key point of discussion and debate for business leaders, the media, investors – almost everyone.
The discourse surrounding these tariffs and their potential impact on global trade has reached every community across the country. CJ Logistics offers an impartial analysis of the current situation and its implications for manufacturers.
Why Tariffs Now?
The goals of this policy – as stated by the administration – are to incentivize companies to move their operations to America and reduce trade deficits and barriers, ultimately increasing trade in the long run.
As it stands on April 16, there is currently a pause on the implementation of most tariffs that were previously announced, and it has been reported that more than 75 countries have reached out to the White House to negotiate trade deals.
So, what does this all mean for the global supply chain?
#1 – Disruptions and Uncertainty
Tariffs are creating uncertainty and volatility in global trade flows. This situation is forcing companies to reassess sourcing and routing as countries impose tit-for-tat measures. This is currently increasing the risk of supply chain delays and complicates planning for producers and shippers around the world, especially since the Administration is constantly pausing and restarting its strategy. Businesses should take this opportunity to assess their storage situation and ensure they have dependable warehouse facilities in America to minimize disruptions for their customers.
#2 – Impact on Consumer Goods Pricing
Tariffs raise input and finished goods costs on both sides of a trade dispute. Businesses can sometimes pass these costs down to consumers, causing price inflation. Shippers and logistics providers are caught in the middle of rising costs and compressed margins.
#3 – Acceleration of Nearshoring on Onshoring
China to U.S. trade routes have become less predictable and more expensive. This will likely encourage companies to reduce exposure to retaliatory tariffs by relocating production closer to, or directly within, end markets. In turn, this will boost demand for North American logistics infrastructure and cross-border expertise. This is evidenced by companies pledging to invest trillions of dollars in America since the tariff threats began months ago. For example, Apple has committed $500 million, and Hyundai announced a $21 billion investment plan. Nvidia also recently stated that it will be manufacturing its chips and supercomputers in America for the first time ever, producing up to half a trillion dollars of AI infrastructure in the next four years.
The Administration’s tariff strategy is attempting to reshape the rules of global trade, and the outcomes are far from certain. However, the situation will likely impact most international shippers and producers.
CJ LOGISTICS AMERICA CAN HELP!
If your business will be impacted by these new tariffs, reach out to CJ Logistics’ experts who can help. We have warehouse space available, including foreign trade zone status to manage import/export inventory and defer duties, in key markets including Chicago, Dallas, Atlanta, Southern California, and Pennsylvania. We can also collaborate with you on a deep analysis of your current supply chain operations and provide recommendations for minimizing your risk and maximizing your bottom line.
For decades, CJ Logistics customers have benefited from our integrated supply chain solutions that connect U.S. warehousing and transportation, global freight forwarding, and customs brokerage – find out how your business can as well.
