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THREATENED US tariffs on the China trade
are unlikely to mean big changes in American supply chains, say experts
attending the recent Connections 2018 shipping conference in White
Sulphur Springs, West Virginia.
"It may have a little impact, but I
don't think it will have a big impact," Jon Slangerup, chairman and CEO
of American Global Logistics, told delegates, reports IHS Media.
If the US implements tariffs on China, various groups have suggested
dire consequences, but supply chain experts did not share these fears.
President Donald Trump plans to impose tariffs on US$50 billion worth of
Chinese goods and threatened up to $400 billion more if China
retaliates.
The US Treasury Department is expected to also announce restrictions on
Chinese investments in the United States, and China plans to respond
with tariffs that will likely hurt US producers of cotton, soybean, live
animals, and animal products.
Said CH Robinson Worldwide CEO John Wiehoff: "The trends towards
globalisation and global optimisation are too compelling. There's too
much capital invested that it is not going away. It's going to
continue."
Said Johnson & Johnson vice president Sylvia Fouhy: "I don't think
there is panic. We're staying the course because we are in it for the
long haul."
Mr Slangerup, the former Long Beach port boss, conceded that customers
are stocking up before the tariffs are enacted, which can occur as soon
as July 6 on $34 billion worth of Chinese goods.
"Some of our customers seem to be accelerating their sourcing to try to
get in front of any short-term impacts from tariffs [on earnings]. That
may drive an earlier increase in volume than we typically anticipate,"
he said.
"This is especially true on the e-commerce side where customers are
repositioning ahead of a potential disruption. That is how agile supply
chains are becoming. [Shippers] anticipate some global impact and they
can move quickly to adjust," Mr Slangerup said.
Separately, Gene Seroka, executive director of the Port of Los Angeles,
said tariffs "would affect 15 per cent of all cargo through Los
Angeles", reported the Wall Street Journal.
"It's not that we're pushing the panic button, but we're watching this
very closely because it does have an impact on a number of things, from
consumer prices to jobs," Mr Seroka said.
South Carolina State Ports Authority CEO Jim Newsome said it is too early to know what impact tariffs may have.
"I'm having a hard time believing that out of all of this is going to
come to a world where we increase tariffs everywhere," he said, adding
his was more worried about Europe than China.
His Port of Charleston, is closely tied to the auto industry, handling
imported auto parts as well as finished-vehicle exports made at several
factories in the US, including BMW and Volvo.
Mr Newsome said he believes tit-for-tat responses are more of a negotiating tactic than settled policy.
"I'm having a hard time believing that out of all of this is going to
come to a world where we increase tariffs everywhere," he said.
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