With the on-going trade war between China and the United States, Chinese companies have decided to move production to other countries, mobilizing companies specializing in removals in Thailand, Vietnam, Myanmar, and other countries.
President Trump recently imposed even more tariffs on various Chinese products. This would increase the tax that these companies would need to pay on top of production and shipping in order to get their products into the United States. To combat this, some manufacturers take to neighbouring countries to house their production facilities and produce products like textile, rubber, and plastic. Companies offering services in trucking and removals in Thailand, Myanmar, and other countries involved in the manufacturing process would then transport these products.
According to Christopher Rogers, a supply chain specialist based in Panjiva, the new tariffs would pressure companies to make use of the supply chains in different parts of the world to maintain their competitiveness. Otherwise, their products would not be able to penetrate one of the largest markets in the world.
Problem for the Supply Chain Industry
The imposed tariffs affect not only China, but the United States as well. Arnold Kamler owns Kent International, a company based in Manning, South Carolina. They assemble up to 400,000 bikes every year. However, the bikes that they assemble make use of imported parts from China. The tariff would prevent the imported parts from reaching Manning, or increase its prices. He is now considering getting the imported parts from somewhere else— a time consuming task that could take three years. With the political climate the way that it is right now, he finds it difficult to infer what the president would do next, and how it would affect his business.
Businesses like his would need to find other ways to get around the tariff to stay competitive in the market. Getting imported parts and raw materials from China could significantly increase their expenses, which could affect the price of their products and the overall budget of the company. On the other hand, as he said, it isn’t too easy to simply shift to a different supplier even without the tariffs.