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Trade war, skirmish, or stalemate?

By Steve Geary | 08/18/2019 | 10:55 AM

The trade deficit with China is trending favorably. A comparison of the first six months of 2019 with the comparable period in 2018 shows the trade deficit with China edging down. That’s a reduction of about 10%, according to Census Bureau statistics.

Welcome news, perhaps, but hardly a breakthrough. 

If the logistics network in Southeast Asia were to realign, a surge in trade with Bangladesh or Vietnam would be expected. The trade deficit with Bangladesh is up by about a third, by about one hundred million dollars a month. The trade deficit with Vietnam is also up by a third, about a billion dollars a month.

Logistics professionals are flexing, evolving away from China, but that is not the same as reshoring to domestic U.S., or even North American, sources. Port volume at Los Angeles–Long Beach is up 3.9%, higher than the growth rate of the U.S. economy. The growth in the GDP (Gross Domestic Product) for the 2nd quarter 2019 was 2.1 percent, and the 1st quarter clocked in at 3.1 percent

This data demonstrates that the global logistics networks are evolving, perhaps balkanizing, but that is not the same as reshoring. How the tensions with China will resolve is unknowable. What is clear is that logisticians need to pay attention. 

Supply Chain Risk Management matters.  Educate your boss.



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About Steve Geary

Steve Geary

Steve Geary is an adjunct faculty member at the University of Tennessee's College of Business Administration, and is on the faculty at The Gordon Institute at Tufts University, where he teaches supply chain management. He is the President of the Supply Chain Visions family of companies, and Chief Operating Officer at ROSE Solutions, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly. He is listed in Who's Who in America, Who's Who in the World, Who's Who in Science and Engineering, and Who's Who in Executives and Professionals. In November of 2007, Steve was recognized for "Selfless Service to Our Nation and the People of Iraq" by the Deputy Secretary of Defense.


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