TOC Logistics’ Tariffs Update

Jul 9, 2018International Logistics, Supply Chain Management

As the clock struck midnight on July 6, the United States officially imposed 25 percent penalty taxes on a variety of Chinese products, and, as predicted, the Chinese government responded with their own set of new taxes on American products, thus beginning what China has referred to as the “largest trade war in history.”


“A New Dawn”

“As the day dawned across the U.S. on Friday, a new economic reality dawned with it,” stated NPR reporter Colin Dwyer in his early-morning July 6 piece on the newly imposed tariffs. When the Trump administration imposed a 25 percent tariff on $34 billion worth of Chinese imports, China’s Ministry of Commerce declared that the new trade regulations have “violated (World Trade Organization) rules and launched the largest trade war in economic history to date.”

When Chinese authorities swiftly retaliated with equivalent tariffs on $34 billion worth of imported U.S. goods, people were understandably concerned about how this “trade war” would continue to escalate and what impacts it might have on a variety of industries, including supply chain management.

Given the fact that many economic pundits have estimated that this “trade war” could last anywhere from two to eighteen months, there will no doubt be impacts in our industry. Our team reported on the looming tariffs back in April of this year, and will continue to be heavily invested in monitoring this situation.


Future Industry Impacts

While certain commodities are likely to take a brief hit and the supply chains will be disrupted for a time, there is already a deficit between our two countries (the U.S. and China) and others, so we are unsure of how much this can really hurt the U.S. It is unknown if these deficits could potentially take economic control of the U.S, making this “trade war” a necessary action to protect the U.S. economic future.

In this current market, those buying and shipping from alternative sources for materials have a huge opportunity to capitalize. There are plenty of other countries that would be eager to purchase alternative or raw materials that were previously ear-marked for China. It would, however, be challenging to divert attention away from China to other markets. This may create an opportunity for the United States to focus on diversifying trade practices instead of focusing solely on high-volume trade lanes.

Since the final outcome of this “trade war” is still unknown, those in the supply chain industry are actively adjusting their strategies to fit within this new global trade landscape. No matter the current economic climate, our global team at TOC Logistics is dedicated to providing cost-effective solutions that fit our clients’ needs.


Our capable and experienced team is standing by to assist organizations and supply chains across the globe. Click the button to get in touch with our team.

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