News #75 - US-China 'tariff war' tough mobile bongdaso importers as supply chain costs rocket

Attempts by businesses to reduce their dependence mobile bongdaso Chinese imports are becoming more difficult as the US-China tariff war intensifies.

In May, US president Joe Biden announced a 100% border tax mobile bongdaso Chinese-made electric vehicles, to protect domestic manufacturers, while other products such as lithium batteries, solar panels and semiconductors were also subjected to tariff hikes.

Sara Hsu, associate professor of supply chain management at the University of Tennessee, said that, while “the latest tariffs are relatively targeted” and would not “have a huge impact mobile bongdaso transportation prices and timing” in the global supply chain overall, “customers will face higher prices in the marketplace” if businesses in the targeted industries are unable to bear the increased tariffs.

Currently, only around 1.1% of Chinese EV exports go to the US. mobile bongdaso the other hand, solar panel imports rose 82%, to 54 GW in 2023, according to S&P Global. And although the majority came from South-east Asian countries like Cambodia, Malaysia and Thailand, a large number of those operations were backed by Chinese companies.

“The US does not import many electric vehicles from China, so the tariffs in that industry are more pre-emptive. Tariffs mobile bongdaso solar cells, however, will lead to higher prices in an industry that faces surging domestic demand. So some of the tariffs will be impactful, while others will not”, she explained.

The new EV tariffs may only be the beginning as Donald Trump has pledged, if elected in November, to impose tariffs of 60% or more mobile bongdaso all Chinese goods. This is in conjunction with news that the EU now requires additional tariffs mobile bongdaso Chinese EVs of up to 37.6%.

And the new tariffs are “creating tension mobile bongdaso the sea freight industry”, said Alex Zhong, general manager at a Shenzhen-based forwarder.

“Everyone is fighting for cargo space, because many countries are constantly adjusting their tariffs [mobile bongdaso Chinese products]. Buyers want to make sure their goods arrive before new tariffs or future tariffs get implemented.”

The tariff war has resulted mobile bongdaso US firms eyeing “supply chains away from China and toward other source countries for ‘tariffed’ products”, noted Kyle Handley, associate professor of economics at the University of California.

“Any country that can supply the goods mobile bongdaso sufficient quantity and quality to the products that face high Chinese tariffs stands to gain. We have already seen supply chains shifting outside of China mobile bongdaso response to the [previous] Trump tariffs.”

To meet the new shifting demand, Chinese suppliers have set up manufacturing hubs mobile bongdaso other low-cost countries mobile bongdaso Asia. But the attempt to establish a risk-free supply chain comes with two major challenges. First, the costs involved mobile bongdaso moving production lines and the scarcity of raw materials. Since “there currently is no other supplier that even comes close to Chinese market share” for a number of key products, including “rare earth components”, the costs of alternatives can be unbearable for smaller businesses.

“For the smaller factories and vendors that rely mobile bongdaso suppliers for key inputs, these costs may be large enough that they cease operations or scale down considerably,” he said.

The other major challenge for suppliers and buyers is the stability and security of the new supply chain, as the uncertainty of future trade policies remains high.

“The potential downside is that many of the beneficiary countries rely mobile bongdaso Chinese foreign direct investment, or Chinese parts, to build products that are ‘friend-shored’ for sale in the US. If that dependence mobile bongdaso China, real or perceived, is viewed unfavourably in Washington, some of the new ‘friend-shoring’ countries may become foes,” he explained.

Prof Handley emphasised that the global economic impact may not be all tangible or visible at the moment, since mobile bongdaso most cases it will occur “through the foregone investments mobile bongdaso new opportunities – ie, through all the new products and ideas that are no longer economical under a high-tariff regime”.

Source: https://theloadstar.com/us-china-tariff-war-tough-mobile bongdaso-importers-as-supply-chain-costs-rocket/

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