What is the impact of the US trade tariffs on global supply chains?

CGTN Europe spoke to Jonathan Owens, Senior Lecturer in Operations and Supply Chain Management at the University of Salford’s Business School.

Transcript

00:00The tariffs can be quite significant initially in the small parts that will actually arrive

00:10from overseas and they will be having multiple tariffs that can be added on because not everything

00:18can be actually manufactured and supplied within the US and this will be the manufacturing

00:25industry also impacts into the digital area because a lot of the car manufacturers are

00:31impacted by the digital supply as well and then obviously when we get to the end of the

00:40manufacturing process you then have the tip for tap process of what US can do, other countries

00:50can do so the buying of cars that are actually manufactured in the US can be more expensive to

00:58buy in other countries. I mean this is your specialist subject you write about this in

01:03your most recent research talking about supply chains vulnerable to disruptions we have kind

01:08of been here before haven't we if you think back to the supply chain disruption during the pandemic

01:13the Panama Canal crisis, Ukraine, the Middle East how disruptive is this tariff disruption?

01:21Okay the immediate one at the moment with the tariffs the biggest impact is going to be the

01:29manufacturing areas and also in agricultural areas that they're the two biggest hits right

01:36now if it goes into long sustained areas obviously manufacturing products such as the

01:46large components that are coming in they will come in by a shipping and if that starts to

01:56actually impact and slow down the sales of cars we will actually see less shipping containers

02:07being used and as we saw in the pandemic now those shipping containers being coming become

02:14displaced globally and those shipping containers then being displaced then became rather expensive

02:23to get back into where they should be within the supply chain routes. Now this can be rather

02:29unpredictable Mr. Trump makes the speech it gets lots of headlines on Twitter and the rest of it

02:34it leads the news bulletins and then a couple of days later there's a bit of a row back so it's

02:39very unpredictable to to answer this question I know how quickly would these extra tariff and

02:47shipping costs trickle down to the consumer if I go out and buy a Tesla in the United States

02:54how long before I'm hit? Weeks? Days? Months? That's going to be the multi-million dollar

03:00question because we've already seen a stop start by the Trump administration we are going to do it

03:08then we're going not going to do it and then the response from respective countries actually

03:14happening so this might actually be a non-entity or it might be a full global tariff trade war

03:25if it does become the latter there'll only be so long before the manufacturers can actually hold

03:33back the costs and then it will start to trickle down to the consumers then we've got the consumers

03:41not being the end consumers such as you and I Jamie going out to buy the car but we then we've

03:45got the first, second, third, fourth and tier supplier consumers within the supply chain Jonathan

03:53I think I'll stick to the company Moped and thank you for that Sir Jonathan Owen senior

03:57lecturer in operations and supply chain management at the University of Salford's Business School