Is Your Supply Chain Prepared for a Potential Trade War?

Posted on Mar 19, 2018

"Companies for better or worse are forced to be global on both the supply and demand sides of their businesses. Supply chains are extended globally as well. To compete, companies have to continuously trade off service and costs. The ones that do it best are walking the finest of lines. Anything that could disrupt that balance is a major risk."—Expert

President Donald Trump has announced new tariffs on imported steel and aluminum that will officially take effect on March 23, 2018. With the exemption of a few countries like Canada and Mexico, steel products face a 25% tariff, and aluminum goods a 10% tariff. It's widely predicted that domestic steel and aluminum companies will gain from this action, and other domestic industries, such as beverage companies that sell products in aluminum cans, or car companies who purchase steel parts, will suffer. When these new tariffs are implemented, numerous supply chains will go out of balance, prompting shifts in strategy, and if other countries retaliate with tariffs of their own, you're going to need an excellent risk management solution in place to keep your company's supply chain in check.

Risk Visibility| Is Your Supply Chain Prepared for a Potential Trade War

In addition, the future of the North American Free Trade Agreement (NAFTA), established twenty-four years ago, is increasingly at risk of dissolving, or being majorly overhauled. Presidents from the three countries involved in NAFTA—U.S., Canada, and Mexico—are currently in heated talks about the future of the Agreement.

Trade agreements have major impacts on the way companies do business, and, most noticeably, trade agreements affect their supply chain management systems. We live in a global economy. Businesses outsource the manufacturing and assembly of parts to companies halfway around the world and back. It's the way it is. There's no doubt that global supply chains have maximized efficiency for companies all over the world; however, with talk of a potential trade war looming, even the most mature global supply chain is at risk, with new liabilities presented at every turn, over and above existing challenges of language difference, terrorism, time zones, natural disasters, and cultural barriers.

A risk management solution like NC4 Risk Center™ provides real-time tracking, monitoring, and security for your assets across borders, in foreign countries, and at home. Developing a strategy for uncertainty means using all the tools you have to anticipate multiple outcomes ahead of the competition. By incorporating and anticipating change, companies can correct course quickly as this new unpredictable trade era begins. 

Risk Center can provide intelligence and assessments on the likely impact of a trade war. Real-time tracking of events gives a more complete picture of where risks are occurring, shows a history of where risks are more prevalent for your particular industry, and houses a directory of suppliers' contact information so you can quickly contact these key representatives for a complete picture of how new trade deals are affecting their link in your supply chain. Email us at or call 877-624-4999 to speak with an NC4 risk management specialist and dramatically increase your ability to prepare and respond to risks that threaten your supply chain.


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