Trumpdate: Tradewar News
Now that the new tariffs have gone into effect, how will the economy respond? That is the $34 billion dollar question. Some believe that the tariffs will provide the US with higher quality manufacturing jobs, while others anticipate increased costs for American industry.
The new international trade policy is expected to shake up global supply chains and cause a reevaluation of cash flow for American manufacturers, and industry leaders are keeping their eyes on the market for developing trends. For now, some supply chain turbulence is to be expected as changes take effect.
There have been some reports of Chinese ports holding goods for longer than expected. Delays in customs clearing have occured while officials wait for word on how exactly to impose the added tariffs.
International response has varied. Some nations have given vocal critiques of the new trade policies and others have responded with specifically formulated tariffs of their own.
For example, one of the targeted responses from China has been a new, lowered import commitment to US soybeans, down 66,000 tons from last year. With the United States exporting over 50% of their soybean yield to China, the reduced quota is expected to change the agricultural landscape.
President Trump committed to moving forward on the tariffs the day before they went into effect on July 6th, maintaining that the taxed goods, valued at $34 billion, have the potential to be followed by an additional $16 billion of taxable goods in the future. There are rumblings that as much as $450 billion of taxable imports are up for consideration.
As the tariffs go into effect and new market forces take shape, logistics and supply chain managers watch with anticipation for what will happen next. International market forces are always in flux, so expect that these changes are only the beginning.