Almost every major economy is building a “trade wall” along its borders – the US, EU, UK, and China. Concerns about the appropriate balance of trading between nations, consumer safety, protecting against terrorism and of course generating revenue is at the root of volumes of legal documentation and a corps of agents at all points all over the world enforcing them. Trade policies all around the globe are on the move. Tariff discourse is evolving into action, non-tariff measures are increasing, and the number of free trade agreements has risen to record levels. In this fluid environment, it can be challenging to pinpoint trends and assess how trade policy shifts might impact business and products. While new policies are being implemented, shippers and manufacturers all over the world are scrambling to re-configure their supply chains both physically and financially by finding alternate production sources and new suppliers.
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| In this fluid environment, it can be challenging to pinpoint trends and assess how trade policy shifts might impact business and products. |
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Amidst the breakdown in US-China trade relations and the ongoing trade war, the rest of the world is scrambling to make trade moves that will insulate them from uncertainty. The United Kingdom is racing to strike deals with the US, China and Asia countries, and EU nations to shelter their economy during the impending Brexit, whose deadline looms just weeks into 2019. “In the past two years, the global trading atmosphere has been poisoned by a culture of insularity and mistrust, with a number of countries turning their backs on globalization and focusing on protectionism. In this increasingly isolationist world, casting off the EU’s old trade deals and winning new ones will be tougher than ever,” says Sourcing Journal writer Melissa Twigg.
This trade volatility and disruption affects every company and every industry – and often not for the better. The fact is, global trade volatility can carry a hefty price tag. It can drive up the cost of raw materials, manufacturing, transportation, duties and tariffs, and ultimately increase the prices paid by consumers. For instance, US and foreign automotive manufacturers alike have issued dire warnings that new tariffs levied by the United States will increase production costs, which will raise vehicle prices, potentially reduce sales and force worker layoffs. China’s production numbers are dropping and factory activity is slower than expected.
It is critical to be tuned into the geo-political topics that are impacting the direction of global trade and the implementation of punitive and retaliatory tariffs. Companies should consider how to react to these developments and brace for more changes that might come down the road. Today’s trade policy landscape calls for leading technology that can help identify opportunities for growth, boost productivity, enable compliance, and minimize risk. That is a tall order in times like these.
To efficiently import or export goods, you need fast access to data for all the countries with which you trade, coupled with a digital supply chain execution platform. Unfortunately, collecting, cleansing and publishing global trade content is complicated by the number of countries and government agencies, differences in trade regimes, a wide variety of formats, and rapidly-changing information. Trying to maintain a complete and accurate database can be time-consuming and costly.
Amber Road offers the industry’s most comprehensive database of government regulations and international business rules, tightly integrated within our suite of global trade management (GTM) software. Global Knowledge® powers our GTM suite by underlying the processes of importing, exporting and administering preferential trade agreements. To learn more about trade compliance solutions, visit www.amberroad.com
You can also check out our recent Trade Trends Report to find out how companies are leveraging technology to overcome emerging and enduring global supply chain management risks.
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