10 things eft’s been reading this week

Big, beautiful trade barriers

Over the last three decades we have seen trade barriers being steadily eroded and with this, a flourishing of transportation of goods internationally. However, a wave of political discontent with current order is pushing back and this could have consequences for the increasingly complex supply chains that have been built as a consequence of falling costs. This week we take a look at what is happening and what this could mean for logistics.

Wilbur Ross, the US Commerce Secretary, struck a harsh tone on Thursday, evoking the idea of making trade more painful, which might make shippers wince. Ross says U.S. must create 'more painful' environment in trade: CNBC. [Reuters]

Meanwhile the EU is responding in kind. EU tariffs on US goods come into force. [BBC]

A report from Alix Partners notes that the falling costs in procurement could now be at an end as extra capacity in the global economy dries up and trade becomes more costly. Rough seas ahead for procurement. [Alix Partners]

The trade war between the US and its trade partners isn’t the only dark cloud as Brexit is causing fits among companies with highly integrated European supply chains.  Airbus warns no-deal Brexit could see it leave UK. [BBC]

As well as aircraft manufacturers, car companies have been some of the keenest to exploit cheap logistics chains and so are vulnerable. Are car makers the first victims of Trump's trade war?. [Sky News]

Could a trade war cost up 3% of US GDP? Economist Paul Krugman gives a detailed account. Thinking About a Trade War (Very Wonkish). [New York Times]

And if that was a bit too dense, here is a shorter summary of potential consequences. How Bad Would A Global Trade War Be? [Forbes]

But what about internal barriers? The Huffington Post points out that restrictions on internal Canadian trade creates a customs duty of 6.9% on goods moving between provinces, way above the 0.8% Canadian tariff on international imports. Amid NAFTA Turmoil, Remove Barriers To Free Trade At Home. [Huffington Post]

To finish up, here are some lighter takes on the situation, with a viewpoint from JLL that says diversifying across countries can help to lessen the impact and that globally, trade is in a healthy place. Tariffs present different global supply chain situations for shippers. [Logistics Management]

Similarly, FedEx set out bumper results and played down the importance of a trade war to the supply chain. FedEx profits soar above expectations, aided by tax cuts, pricing, volume growth. [Commercial Appeal]


Alex Hadwick, 

Head of Research, eyefortransport

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