30
Jun
How to Protect the Financial Success of Your Product & Business Amidst the China-US Trade War
If your business is affected by the conflict between China and the US, there are few things we can do to help get you back in business and on a level playing field.
It is important to understand that tariffs in the past have been short-term. Lasting 12-24 months, they underpin a trade position from one country or trade zone to another. The important word here is ‘temporary’. If a tariff applies to a product, it depends on its classification and country of origin. The key is to determine where the highest value transformation takes place in the production process. A product’s country of origin is wherever this takes place.
What are the options?
There are several options when dealing with tariffs, whilst not jeopardising your IP, entire vendor architecture or quality levels:
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Sub-assemblies- the number of parts a factory produces over several geo locations.
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Relocation – moving part or all your vendor architecture to a country not subject to tariffs.
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Labour cost – if relocation is an option, consideration of increased labour costs against exchange rates and tariffs.
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Process consideration – automation, assembly, packaging, and storage.
Having an entire product with one Electronic Manufacturing Service (EMS) in today’s world can be a risky strategy. One Point Zero combines the buying power of small and medium sized businesses (SME’s). This translates into a wide range of vendor network options, in a variety of geo locations. We have helped many SME’s build out a robust multi-vendor supply chain, giving our clients peace of mind in a period of uncertainty. Brexit, trade wars, riots and a pandemic are all unpredictable, you never know what is around the corner.
