What does it take to adapt to tariff wars?

Rich Mokuolu
May 29 · 3 min read
  • The increased duty rate applies to specified products that have been imported to the US on or after May 10, 2019, and exported to the US on or after May 10, 2019. Specified products exported to the US prior to May 10 are eligible for the preexisting 10% duty rate, provided they are entered into the US before June 1, 2019.
  • The duty rate increase applies to over 5,700 Harmonized Tariff of the US (HTSUS) subheadings that cover food items, chemical intermediates, textile intermediates, fuel products, metal tools and housewares, electric and electronic consumer devices, vehicle components, and furniture, among others.
  • The USTR has confirmed that it will establish a process for requesting exclusions from the tariffs for List 3 products.

What do companies need to do?

  • Assess your supply chain: Understand your supply chain at an in-depth level — know your supplier’s strengths and weaknesses. Which suppliers within your network will be affected by the tariffs? Where can you find alternative sources to mitigate tariff cost impact (e.g. local sources)? Where can you mitigate risks to your supply chain?
  • Update product designs: Redesign components within your products wherever available — identify potential opportunities such as alternative material specifications based on your product’s design intent. This will help lower your product costs in an impactful way
  • Reevaluate your long-term strategy: Become more proactive and establish robust supplier blend strategies to maintain your supply chain’s competitiveness. Being single-sourced on components from one major supplier is not a long-term strategy. Ensure you have available alternatives in place, should your main supplier become impacted by tariffs or a natural disaster.

What do manufacturers need to do?

  • Assess your core strengths: Understand your shop’s competitive edge at a deeper level — your shop’s strengths & weaknesses, product focus, and types of customers you want to work with. You may need to drop some customers to make room for preferred customers who best align with your business’s long-term strategy.
  • Engage in productivity projects: Implement LEAN manufacturing principles and address inefficiencies within your shop. Eliminate waste wherever possible — wasted motion made by operators during manufacturing operations is typically overlooked at most shops and contributes to increasing your shop’s variable costs.
  • Reevaluate your long-term strategy: Become more proactive and develop ways to maintain your business’s competitive advantage. Establish a strong customer acquisition channel to feed your shop business, which better aligns with your core strengths.

Partsimony

Partsimony is at the intersection of prototyping, sourcing, and supply chain management. Partsimony is building the future cognitive supply chain.

Rich Mokuolu

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Partsimony

Partsimony is at the intersection of prototyping, sourcing, and supply chain management. Partsimony is building the future cognitive supply chain.