Supply Chain Matters is once again compelled to provide a follow-up commentary related to global trade developments, specifically to the Trump Administration’s ongoing Make America Great mantra of aggressive trade actions that are rattling markets and adding to building uncertainty. Events continue to unfold daily, and markets and industries are becoming more concerned.
China Supply Chain Strategy
Supply Chain Matters has previously cautioned our global based readers that in the current period of robust global supply chain activity, there is a need to pay close attention to the caution signs. With Q1-2018 regional and country-specific PMI indices now reported, those very caution signs are having a discernable impact.
China has unveiled retaliatory tariffs on a reported 128 U.S. products that are imported into one of globe’s most significant economy. The actions were characterized as a response to the Trump Administration’s actions on imposing steep tariffs on certain steel and aluminum products imported from China.
President Donald Trump indicated this afternoon that the United States is planning to levy tariffs on about $60 billion of designated imports from China, as well as impose restrictions on technology transfers to pressure China to curtail what the U.S. considers unfair trading and investment practices.
Supply Chain Matters highlights a related development to our prior published blog: Volkswagen Reiterates Aggressive Electric Automobile Production Plans. That development is continued efforts by China based battery producers to secure longer-term supplies of all-important cobalt, an essential metal required in the design and production of rechargeable batteries.
This Supply Chain Matters blog commentary serves as a reminder to procurement as well as sales and operations planning teams that the Chinese Lunar New Year holiday begins in month. Ensure that final preparations have made with Chinese based suppliers to have an adequate supply of needed inbound inventories of manufacturing component parts, and to adjust lead-time expectations to reflect the seasonal nature of this holiday slowdown in component supplies and transport networks.