TRADE and customs consultant, Michelle Frennier, says a Chinese decision to halt purchase of US agriculture products will likely spur a surplus of soybeans and other high-volume exports on the global market.
The Chinese move was in retaliation to the US imposition of trade tariffs on some Chinese goods.
Ms Frennier, who is based in the US, also noted the impact of US tariffs on the ability of US companies to acquire aluminium and steel affordably.
She said higher manufacturing costs due to aluminium and steel tariffs had already impacted US companies, such as Deere & Co, forcing supply chain changes.
She noted China had established the infrastructure and labour expertise to appeal to industries ranging from manufacturing to a trusted source for high-end and high-tech products.
“With heightened tariffs and instability in trade relations with China, many US multi-nationals are looking to alternative sourcing in countries such as India and Mexico,” Ms Frennier said.
She noted navigation of these requirements is essential in determining if a supply chain shift provides a long-term, scalable alternative to the US-China Trade War repercussions.
As of June 16, 2019, India enacted retaliatory tariffs on some US products, ranging from 10-20% in response to the steel and aluminium tariffs imposed by the US under Section 232.