Trade Planning in a World of Disruption: Free Trade, Fair Trade, Fool Trade
America First is what needs to be digested as America shifts gears as it pursues its Fair trade objectives. What is the impact to all of us where the new world order is for the US to look after itself first? The larger economy wins every time and when you control 20-25% of world GDP, you can win and outlast everyone especially when you own the multi trillion dollar market. The result of this shift is a whole bunch of collateral damage and is a 180 degree turn from what made America great after the Second world war as a powerful, generous, values based leader who invested and were the impetus behind GATT, WTO, United Nations, NATO, etc. Winning is now measured only through economic wins. The message is clear, America holds many cards, hang on for the ride. Is it just about negotiation or does this shift into America going it alone on many other fronts?
The theory about trading and comparative advantage has morphed into deep channels of integrated trade and supply chains. The depth of this integration has created a significant dependency across borders especially in North America with a deeply integrated and efficient supply chain that has not contemplated or envisioned the dramatic shift to look at border risk. Supply chain availability for the whole framework of world product distribution or the input costs associated with effective and efficient production are fracturing business planning. The unwinding process is extreme and it will take time as every trader evaluates the elastic and inelastic elements of their supply chain and what realistic options they have to change to identical or similar inputs even if there was a realistic option. Clearly, no one has anticipated nor thought clearly about the risks that have now hit like the tornado we are on the cusp of and experiencing today.
Our role in facilitating international trade is to help you navigate the border options available to you as you do your scenario planning. Our One Border,One Broker strategy will help you define your business case as NAFTA unfolds and as China responds and as the new world order begins a ramp up to a Trade War that, by definition, creates enormous uncertainty and likely, many unintended consequences.
Al Dewar will talk about our current experience of what types of questions are arising from traders today given that we manage more than $6 Billion of cross border trade for our clients. He will offer you insight of what you need to know, what you need to do to prepare and what we need to do together to work through these immediate challenges and to create a robust individualized strategy that fits with your needs. His call to action is what you need to do today to prudently plan your business strategy given a host of business outcomes created by an uncertain trade environment.
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