The 10% tariff is being imposed against the items on List 4, starting from 1st September 2019. This is going to be the most impactful, because, it covers massive 4000+ HTS, including those that are related to consumer electronics and appliances. So an average consumer, I guess for the first time going to be affected by the trade war in US.
As well as a total worth of goods impacted by List 4 is a staggering $300 Billion or 55.10% of the total imports.
And in a likely move, China has bit depreciated its currency against USD to support its exporters in the trade war, the currency depreciated from 6.88 to 7.02 against US dollar earlier today.
So the pace of this trade war is picking up steadily, and elsewhere, US administration has sanctioned a chinese company for importing oil from Iran1, further escalating the tensions between the two nations.
1. US sanctions Chinese oil trader over alleged Iran violations www.aljazeera.com
This year alone, Maersk has accelerated its direct-to-shipper strategy, digital forwarders have raised massive rounds (like Flexport’s billion-dollar injection), and platforms for forwarders and carriers – big and small – have continued to pop up almost daily, at least that’s how it seems.
The issue at hand is that, the so-called traditional freight forwarders mostly SMEs, having been living under the rock. They didn’t get out of their comfort-zone to make the much awaited and delayed move to ‘digitalization’.
The digital freight forwarders at the end of the day, are just ‘traditional freight forwarders’, however they differ in their approach of offering and presenting their services, which includes more visibility and transparency of the shipments from origin to destination.
So it boils down to quality of service and satisfaction that digitalization and transparency offer. If they don’t pose an existential, I believe they however do pose a grave threat to small to medium sized forwarders, who can’t adopt to this new industry standards.
The large sized freight forwarders, are quickly adopting to this change, since they have sufficient resources, as well as, they have stronger presence in a lot more countries, which is a greater advantage to their service offering, and they can retain customers for much longer, until, the ‘digital forwarders’ grow in size, and have presence in as many countries as they do.
If the tariffs are strictly restricted to China and do not affect the cross-border supply chain, Vietnamese exporters will be more competitive and will see an increase in demand for their products, especially textiles and garments.
Yeah I have been pondering over it, how this would effect the Vietnam exports, they are likely to have very competitive advantage and increase in the demand exponentially.