Trump returns: What this means for global supply chains & how to prepare 🌎

TRADE NEWS

How Trump’s Second Term Could Reshape Global Supply Chains

With Donald Trump set to begin a second term, many are watching to see how US trade policy could evolve under his administration. Drawing on Trump’s past policy decisions and election statements, we have gathered numerous expert opinions to outlined some possible directions that may impact global supply chains and manufacturing strategies. While specific outcomes remain uncertain, here are some key areas to watch as potential changes unfold:

• Tariffs on Imports:

  • Possible introduction of a 10-20% universal import tariff.

  • A proposed 60% tariff on imports from China.

  • Targeted tariffs up to 200% on certain foreign-made vehicles, especially those produced in China or Mexico.

• Focus on Reshoring and Domestic Manufacturing:

  • Emphasis on encouraging US-based manufacturing through tariffs and policies aimed at reducing reliance on imports.

  • Potential use of quotas to increase domestic production in key industries.

• Potential Responses from Trade Partners:

  • Trade partners, such as the EU, Japan, and South Korea, may adjust their trade policies in response to US tariffs.

  • Potential for these nations to coordinate economic measures that support balanced trade relations.

• USMCA Revisions:

  • Possible adjustments to the US-Mexico-Canada Agreement (USMCA), especially in the automotive sector.

  • Focus on managing trade balances and ensuring favorable conditions for North American manufacturing.

• Shift from Multilateral to Bilateral Agreements:

  • Potential for a greater focus on bilateral trade deals.

  • The US may reassess its role in multilateral organizations like the World Trade Organization (WTO) in favor of direct agreements with key trade partners.

• Short-Term Import Strategies:

  • Some companies may consider short-term increases in imports before tariffs take effect.

  • Inventory management strategies might be adjusted to optimize costs and storage capacities.

• Long-Term Supply Chain Diversification:

  • Businesses may explore sourcing options outside of China, including countries like Vietnam, India, and Mexico, to reduce exposure to changing tariffs.

• Enhanced Compliance and Regulatory Focus:

  • Continued emphasis on compliance with trade laws such as the Uyghur Forced Labor Prevention Act.

  • Potential new requirements related to sourcing of critical materials, especially in industries like automotive and electronics.

As companies consider these potential impacts, many are conducting scenario planning to stay adaptable and prepared for evolving trade policies. While specific outcomes are yet to be confirmed, being aware of these key points can help businesses take proactive steps to navigate the changing global supply chain landscape.

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VIDEO OF THE WEEK

Cocoa Prices Reached All-Time Highs. What Does This Mean For Our Chocolate?

A huge cocoa shortage has hit the world's top cocoa-growing countries. Now, for the third year in a row, there are not enough cocoa beans to meet global demand. In 2024, cocoa prices soared to all-time highs. But what caused the shortage? And what does this mean for chocolate companies and chocolate lovers?

GLOBAL TRADE SNIPPETS

Vietnam's trade surplus surges to $2 billion in October. Vietnam achieved a $2 billion trade surplus in October, with exports rising 5.9% year-on-year to $30.3 billion and imports increasing 4.5% to $28.3 billion. This marks a significant improvement from the $1.1 billion surplus recorded in September.

China to demand full traceability for beef supply chain. China, the leading importer of Brazilian beef, plans to require comprehensive traceability from birth to export. This move aims to enhance food safety and may address deforestation concerns.

Germany's coalition government collapses as Chancellor Scholz fires finance minister. Chancellor Olaf Scholz has dismissed Finance Minister Christian Lindner, leading to the collapse of Germany's coalition government. This political upheaval introduces uncertainty in Europe's largest economy.

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TRADE NEWS

Spain's Largest Cocaine Bust: 13 Tonnes Seized in Banana Shipment

Spanish authorities have made a groundbreaking narcotics seizure, uncovering a record-breaking 13 tonnes of cocaine hidden within a banana shipment from Ecuador. The operation, announced on November 7, highlights Spain's role as a critical point in the fight against international drug trafficking. This haul, street value at over €600 million, is the largest cocaine seizure in Spanish history and ranks as one of the most significant in Europe.

The drugs were discovered concealed within a shipment at the southern port of Algeciras, known for its high-volume traffic, making it a prime target for traffickers seeking entry into Europe. Spain has long been an entry point for Latin American drug cartels due to its geographical proximity to North Africa and historical trade connections with South America. The operation underscores Spain's strategic importance in the fight against transnational organized crime and the increasing sophistication of smuggling operations.

Spanish police collaborated with international authorities, relying on advanced intelligence-sharing to intercept the shipment before it could reach European streets. This success showcases the effectiveness of cross-border collaboration in tackling the complex logistics of global narcotics networks.

This record-breaking bust is a significant blow to the narcotics trade and emphasizes the ongoing challenges faced by European countries in intercepting drug shipments. As traffickers employ increasingly elaborate methods, authorities are tasked with continuously enhancing their detection techniques to stem the flow of illicit substances into Europe.

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