Here are my predications for the current trade war winds a’ blowin’ as we enter 2019.
The USA – China trade war seems to only be getting hotter.
Predications or implications…whatever you want to call them.
Here are the practical ramifications you’re likely to see from the day-to-day dealings with your supplier, RFQ’s, shipping, etc…
Confusion in quoting
There may be more short-term and on-the-fly thinking.
Less precision or the supplier saying “oh, we know we quoted one thing, but we’ve got to change this now”.
Your supplier, like their Western counterpart is going to be operating in sort of a piecemeal fashion.
We’re all getting the news on a daily basis and seeing what change or tariff is next. It’s like using a flashlight and you can only see so far ahead.
Suppliers, as they hear things will make knee-jerk decisions as they feel are best for their business, whether that is the case or not.
The American importer will tend to be as equally as annoying trying to pass along any tariff hurt to the supplier.
Higher minimum order quantities
Suppliers, because they’ll have the feeling of “we don’t know what tomorrow holds”, will make MOQ’s higher.
They’ll try to extract from each order as much as possible, because in their minds, they won’t know when more will come.
Some suppliers offering lower minimum order quantities to “get you in”
On the flip side of that, you may have suppliers offering lower than normal minimum order quantities to prime the pump. To grease the wheels. To get you in.
But watch out for this.
If your industry minimums or costs went up across the board, be cautious of the vendor who is going the opposite direction.
There may be a hook.
A later price change or substandard quality.
Trade war being blamed for any price increase down to manufacturing errors…
Any tomfoolery in pricing; whether the supplier didn’t read the quote or just made an flat out mistake will be blamed on the trade war.
It’s like all problems from December onwards are blamed on Chinese New Year.
Or a few years back when prices were going all over the place because of the exchange rate.
You won’t quite sure know what’s real and what’s a line.
Higher rate of possible scams, fly-by-nighters
Watch out for this one!
It seems during any turbulent time, you have the “got your deposit, now I’m disappearing supplier”.
Keep in mind what I said above about minimums or lower costs.
When times get tight, people resort to underhandedness.
Keeping your guard up should be preeminent as we enter 2019. Make due diligence the rule of the day.
Turn over of salespeople
The last of my prognostications is that there will be a higher turnover of salespersons in the offices.
The people you contact for quotes, control and daily communication… more will come and go.
In fact, as budgets grow tighter, these people may be replaced with younger, wider-eyed deer in headlights kind of youngsters that speak good English but know little about you or your industry.
This was what I’m seeing by looking in my own crystal ball of experience. If I find that I’m completely wrong, I’ll do a self-retort.
If I find that my gut was right, I hope I’ll remember to blog about that too.
How about you?
What ramifications are you seeing or think you’ll see?
Chime in below or on social media.