If you have left your house or used the internet in the last 18 months, then you are at least aware of the trade war between the United States and China. We are also guessing you have probably also heard a lot of opinions, and possibly very little facts.
At Pentaflex, we understand that being aware of today’s economic climate will assist us in continually improving for our employees, our community, and our customers. While we might not have all the answers to the current situation, we want to ensure that you always have the information you need to make an educated decision for your organization and your customers.
Here are the facts about the last year and a half for this economic situation…
- In July of 2018, the US imposed a 25% tariff on various goods entering the country from China.
- Since then, there have been three other installations of tariffs on Chinese products.
- In response, the Chinese government has placed their own tariffs on American goods ranging in percentages.
- In December of 2018, both countries agreed to meet and discuss finding a solution to the trade disagreements. Any raises in tariffs were paused during this time.
- In May, the United States installed a 25% increase on about 200 billion of Chinese goods.
- China responded in June with a 25% increase on about 60 billion of US goods.
- As of late August, Mr. Trump has proposed new plans that would increase the current taxation on Chinese goods from 25% to 30%.
- China has responded by saying they will retaliate if these proposals do in fact go into effect in September and December.
Is there an End in Sight?
According to Mr. Trump’s statements at the G7 Summit in France, the only way these disagreements with China will end is if Beijing is willing to bend to his requests. Both sides have continued to go back and forth on their statements throughout the following weeks. But, it appears as though both sides are preferring an end to this trade war soon.
What does this mean for manufacturing?
While the beginning of these taxations began with a small amount of goods, as of this past May, almost all imports from China are on the list. Depending on negotiations in the next month, that list could include even more.
These continued tariffs could encourage manufacturers to source either from a different country or from the US. However, there would inevitably be a lull in the acquisition of said goods while teams reroute their supply chains.
What can you do?
The best step you can take for your customers and your company moving forward is to stay up-to-date with the changes. In today’s world of manufacturing, the survivors are the adapters. The second step is to keep an open dialogue between your suppliers and your customers with changing goods availability and pricing. Be sure everyone is on the same page, and do not make hasty decisions based off one statement you hear or read.
We are here to help
Our team monitors the global trade situation regularly to minimize the potential impacts to our customers due to increased raw material costs. Would you like to speak to a Pentaflex representative about how we are keeping our customers our top priority? Give us a call at 937-325-5551.
Sources
https://www.bbc.com/news/business-45899310
https://www.bbc.com/news/business-49471713