Trade War Looms With China

Trade War Looms With China

Here we go again. As was the case in 2018, the U.S. and China are in the opening salvos of a renewed trade war. Trade groups are opposed, including the National Retail Federation (NRF), and the Biden administration is waving off claims of election-year politics (he had opposed it during the Trump administration). The $18 billion in goods affected is a drop in the bucket compared to $563 billion worth of Chinese imports in 2023. But concerns over an expansion to other categories are real to the many U.S. companies selling into China.

Elsewhere, supply chain and logistics executives said flex schedules are the number-one way to draw workers, and Google says generative AI is already reaping results in supply chain applications. Here’s that and more in our roundup of industry news.

China Tariffs on EVs, Steel, Semiconductors Raise Fears of Renewed Trade War

Shippers are bracing for another trade war with China, as the Biden administration’s new protectionist tariffs are designed to help U.S. manufacturers combat a flood of cheaper China-made products. The U.S. tariffs on Chinese-made electric vehicles will quadruple to 100% this year, double for semiconductors and solar cells (50%), and triple for steel and aluminum (25%). 

Some lawmakers from the auto-producing states of Michigan and Ohio are calling for an outright ban on Chinese EV imports over data security concerns with connected vehicles. Separately, the European Union is investigating China over its production of tinplate steel, on top of an EU probe into Chinese solar panel makers. 

Trade groups such as the NRF and the American Enterprise Institute are opposing the increased tariffs, fearing an inflationary effect. Others see election-year politics as a bid to woo swing state votes in a hotly contested race, a charge the White House denies.

China swiftly retaliated to the U.S. move. It launched an anti-dumping probe into imports of copolymers, a type of engineering plastic produced in the European Union, the U.S., Japan, and Taiwan.

Flex Schedules Top Draw to Attract Warehouse Workers

The No. 1 draw in attracting warehouse workers in a tight labor market is the ability to offer them flexible schedules. That’s the finding of a recent survey by logistics technology company Descartes.

The survey, conducted by Sapio Research, queried 1,000 supply chain and logistics leaders in Europe and North America. The top response on ways to drive warehouse worker retention was providing on-the-job training and education compensation. The top listed tactic to improve worker productivity? Automating non-value-added and repetitive tasks.

The Bureau of Labor Statistics showed a bump of 14,300 seasonally adjusted warehouse jobs for April 2024, but this followed months of declines. Overall, warehouse jobs were down 108,200 from the prior April. Net/net: Warehouse workers are still hard to find.

Google Cloud Exec: GenAI Already Solving Supply Chain Issues

A Google executive wowed the crowd at the recent Momentum event put on by Manhattan Associates, saying generative AI has moved beyond the theoretical to the practical in supply chain management. “Last year was a year of proof of concepts,” said Warren Barkley, head of product for Vertex AI, GenAI, and machine learning at Google Cloud, per FreightWaves. “Lots of people were experimenting and this year we’re seeing people actually spending money.”

Barkley cited real-world examples, including using AI to determine compliance with Brexit regulations in contract wording, reviewing California regulations to determine which ones had to be adhered to, and a food company using AI to create a procurement contract template that could be used worldwide.

Barkley said that generative AI has progressed to the point where it can provide context and fill in information gaps either not provided by the user or that don’t exist in the model. 

Supply Chain Investments Increase to Combat Disruption

As 84% of global supply chain executives said, they’ve experienced disruptions in the past year — not a surprising result, given recent events — nearly as many (79%) said they’ve increased supply chain investments to deal with these issues. 

That’s according to an annual survey conducted by Blue Yonder, which in March polled 600 executives from manufacturing, retail, third-party logistics, and government. The top investment categories, according to Blue Yonder, were sustainability (cited by 48% of respondents, AI-based technology (41%), developing new strategy (40%), additional workforce (39%), and digital transformation (37%).

Technology continues to be seen as the primary way to tackle supply chain issues such as sourcing, transportation, distribution, and fulfillment.

Monthly TEU Volumes Projected at 2 Million+ Through September

Monthly import volumes are projected to remain above 2 million TEUs from May to at least September during the annual restocking run-up to peak season. This is according to the latest monthly Global Port Tracker report from the NRF and consulting firm Hackett Associates. 

“We haven’t seen numbers this high for this many months in almost two years,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold in a release. “Regardless of what headlines about the economy might say, consumers are shopping and retailers are making sure they have merchandise on hand to meet demand.”

The latest Cass Freight Index, which measures trucking volume in North America, wasn’t as positive. It showed a 4% decline in TEU volume in April and a sequential drop of 1.3% from March. The Logistic Managers Index (LMI) was in positive territory for April at 52.9, but that was down from March (58.3), the highest growth rate in 18 months.

The NRF/Hackett report draws on historical data and projections from ports including those in Los Angeles/Long Beach and Oakland, Seattle and Tacoma, New York/New Jersey, Charleston, Savannah, Port Everglades, Miami, Jacksonville, and Houston.

Trade Wars, AI, and Warehouse Labor All Prove Challenging

You can certainly understand the protectionist rationale of increased tariffs when a trading partner as big as China is undercutting your markets with inexpensive goods. But it sure makes things awfully complicated in an interconnected global economy. One thing we sure don’t need is more inflation on top of inflation.

Whichever way the international trade winds blow, shippers are always looking for ways to make their operations more efficient. Logistics costs are always rising, along with volatility and disruption. An experienced, reliable 3PL partner can help you navigate this “new normal.” 

ShipBots helps you meet your eCommerce fulfillment performance goals in an increasingly challenging environment. Our nationwide network provides fast order processing and delivery across apparel, Amazon FBA prep, B2B/retail, subscription box fulfillment, and more. With a state-of-the-art facility close to the busy ports of Los Angeles/Long Beach, we’re experts in LA fulfillment. On average, clients have seen a 97% increase in average order value and an 18% drop in cart abandonment. Get in touch for a free quote today!