Supply Chains at Risk

January 3, 2020 • Volume 30, Issue 1
Are tariffs and technology disrupting global trade routes?
By Rachel Layne


President Trump's approach to trade policy — using import tariffs and other punitive measures as leverage when negotiating international agreements — is forcing many companies to restructure their global supply chains, which often took decades to develop. International trade rules established after World War II, combined with technological breakthroughs such as robotics, cloud computing and software, have resulted in intricately connected worldwide supply chains that have cut costs and boosted profits. The shifts also have cost thousands of U.S. manufacturing jobs. Trump says his strategy will change that, but many companies and economists say imposing tariffs at levels unseen since the 1930s will not rein in rivals such as China, the world's second-biggest economy and America's biggest trading partner in 2018. As U.S. companies scramble to find non-Chinese suppliers and brace for lower profits, they warn that the cost of the tariffs eventually will mean higher consumer prices. And China has retaliated by imposing its own tariffs on U.S. goods or halting purchases of American farm products, triggering fears of a prolonged “cold” trade war between the two countries.

President Trump holds a chart of examples of unfair tariffs during a 2019 White House meeting (Getty Images/Bloomberg/Alex Edelman)
President Trump holds a chart of examples of unfair tariffs during a 2019 White House meeting. Many U.S. manufacturers are scrambling to find alternative sources for parts, labor and supplies after Trump imposed tariffs on imports, especially from China. The president says he wants to combat unfair trade practices. (Getty Images/Bloomberg/Alex Edelman)
ISSUE TRACKER for Related Reports
Automation of Industry
Jan. 03, 2020  Supply Chains at Risk
Oct. 23, 1963  Cushioning of Automation
Jun. 03, 1959  Automation and Jobs
Jan. 05, 1955  Automation of Industry
Air Transportation
Bilateral and Regional Trade
Congress Actions
Consumer Behavior
Economic Analyses, Forecasts, and Statistics
Economic Crises
Export Sanctions and Restrictions
Exports and Imports
General Agreement on Tariffs and Trade (GATT)
General Employment and Labor
Import Quotas and Customs
International Law and Agreements
Manufacturing and Industrial Production
Motor Vehicle Industry
North American Free Trade Agreement (NAFTA)
Outsourcing and Immigration
Party Politics
Powers and History of the Presidency
Regional Political Affairs: East Asia and the Pacific
Regulation and Deregulation
World Trade Organization (WTO)