Trade Wars Supply Chain

A trade war is an economic conflict resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. Increased protection causes both nations' output compositions to move towards their autarky position.

Trade wars could be escalated to full conflict between states, as evidenced in the Massacre of the Bandanese after alleged violations of a new treaty. The First Anglo-Dutch War caused by disputes over trade, the war began with English attacks on Dutch merchant shipping, but expanded to vast fleet actions. The Second Anglo-Dutch War for control over the seas and trade routes, where England tried to end the Dutch domination of world trade during a period of intense European commercial rivalry. The Fourth Anglo-Dutch War over British and Dutch disagreements on the legality and conduct of Dutch trade with Britain's enemies in that war.

In Asia, the Shimonoseki Campaign after unrest over the shogunate's open-door policy to foreign trade. The First Opium War which started after the Qing government blockaded its ports and confined British traders, resulted in the dispatch of the British Navy to China and engage the Chinese Navy in the Battle of Kowloon. The First Opium War eventually led to the British colony of Hong Kong, and the Second Opium War, which arose from another trade war with the same underlying causes, expanded the British possessions on the island.

The United States of America (USA) has been weaponizing trade and using it since March 2018 for protectionism reasons as explained at length by its current government. Some might perceive it as a means for the USA to increase its domination over the planet, its people, and its various countries. The USA is exercising one of the six pillars of expansionism, as described in our book Transportation and the Belt and Road Initiative, because it can and has decided to do so.

As a consequence, all countries are currently targets of the USA trade wars, friends and foes alike, except when they submit like Mexico recently did. Some countries, even after submission to the USA, might still be the victim of further trade wars, as they are only part of a wider picture... This creates major trade changes, global commercial instability, constant financial pressure and uncertainty, considerable losses or bankruptcy for some, and basically a period of drastic changes and opportunities. As most targets have been refusing to submit to the USA up to now, many are in return submitted to massive information warfare campaigns, which result is to confuse the situation even more...

Strong from our understanding of logistics, transportation, supply chain management, and supply chain ecosystems, SCMO subject matter experts are constantly monitoring "the pulse" of the planet that is trade. As logisticians, we facilitate trade in its deepest details among all the countries, cultures, customs, and legal systems in the world, and as a consequence, we do understand trade in its intimacy. We offers assistance to corporations, financial institutions, private equity funds, high net-worth individuals, insurance companies, underwriters, institutions, and governments as follows:

  • Identify trade wars for what they are

  • Understand trade wars' unpredictability

  • Map trade wars processes and consequences

  • Identify trade wars actors, their real intent, their actual power, their mechanisms

  • Find urgent and short term supply chain solutions to trade wars

  • Prepare long term supply chain solutions to trade wars

  • Build sufficient supply chain solution backups to be ready for any trade wars' turn of events

  • Prepare for the other indirect consequences of trade wars on our global economic and financial ecosystems

  • Find opportunities in trade wars benefiting your country/ corporation

  • Public speaking at events about the impact of trade wars on supply chains

The following case studies demonstrate how SCMO approach has been successfully applied to client issues.

Client was a SME distributing products in the United States of America (USA), which were manufactured in China, Vietnam, and Europe. Due to increased tariffs for importing in the USA, manufacturing in China was not economically viable anymore. SCMO was approached to help find supply chain solutions at two levels: short term solutions for giving time to client to reorganize, while avoiding such high tariffs, and long term solutions. By restructuring client's supply chain appropriately among its various product lines, we found solutions to the satisfaction of client, which avoided him to file for bankruptcy.

Client was a government, which economy was badly hurt by the trade wars. They were seeking to understand the complete picture of the trade wars, in order to be able to build an informed assessment of the situation and geopolitics projections into the future. SCMO helped them to identify the various actors, perceive the real intents hidden behind the facade, the actual reality behind the global narrative, and understand the actual geopolitical picture behind the scene. Our assistance helped that government build a sound strategy that would protect its economy against any future trade wars. We also helped them take advantage of the trade wars situation to the benefit of their own economy and interests.

Client was a large multinational holding company, which was being strongly punished by the trade wars for a very strategic part of their activities. SCMO was called in order to help in restructuring their global supply chain, and fully understand the situation by taking distance from it. We helped them identify a specific strategic competitors' attack disguised behind the trade wars, with an obvious intent to obliterate them from the global market. We advised them in solutions for how to both possibly disarm this attack, and counter it adequately by protecting themselves against any further such "trade wars" moves. We also suggested a few ideas, which they might be able to transform as competitive advantages by using the trade wars to their benefit.

MAYBANK asked us to participate as a keynote speaker to their "MAYBANK - ICBC Invest Asia 2019" conference in Singapore. Our intervention took the form of a panel discussion with Singapore EDB director about "the impact of trade wars on global and South East Asia supply chains" led by a professional moderator from BLOOMBERG. The one hour intervention was an interaction rich of content, interesting to the audience of bankers, securities and investment funds, and impactful enough that they would jump on their seat at the end of the intervention, as instructed by our client and to their satisfaction.

“The supreme art of war is to subdue the enemy without fighting.”
— Sun Tzu
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