Sky. Falling or Not?

Trade uncertainty. Tariffs. Protectionism. Retaliation. Supply chain disruption. What is happening? For the past year, we have been hearing shouted warnings that global trade as we know it will end in 2017…no, in 2018….no, in 2019.

“The future of the global trade system faces more risk and uncertainty than at any time since it was created after World War II,” according to Foreign Policy Magazine in February 2018. And, “European Commission Vice President Jyrki Katainen warns the United States against ‘global trade war’ on two fronts,” says Politico Europe.

There’s lots more where that came from, and we can generally sum up all the comments as “don’t rock the boat” or, more correctly, the container ship.

So what is behind all this commentary, concern, critique, caterwauling, and condemnation? Well, politics plays a big part. Politicians will energetically advance any narrative that they can use to attack their opponents. Clear-eyed communication, cooperation, and consensus building in the Beltway—on trade or any other topic—seems to be in short supply. That is not likely to change soon.

And then there is the blunt-force approach to trade that challenges the past 40 years of U.S. policy and globalism. Recent moves send the message that the architects of those policies could have been more diligent in guarding U.S. interests. That is an apolitical charge as both parties have been involved in crafting a “world is flat” approach to global trading relations.

That charge has some merit. The narrative is shifting in that direction, and not just here in the States. UK Prime Minister Theresa May wrote recently, “The nature of international trade means that decisions made by governments and businesses in one country can have a deep and lasting impact on workers half a world away.” She adds, “Any government that is serious about the economic prosperity and security of its people and businesses must have an international outlook, and must be prepared to reach out around the world and secure agreements abroad that ensure jobs and prosperity at home” (emphasis added).

Few are calling for the United States to not look after its economic interests more aggressively. The question is, what is the best way to ensure jobs and prosperity at home, whether in the United States, the UK, or other countries? In the shared goal of continued global trade growth and, importantly, true trade reciprocity, our policy makers and trading partners will sort out that question.

One way—the best way—to ensure jobs and prosperity in your enterprise in the face of these supply and business disruptions: Amp up your demand-driven logistics practices. Matching your demand more closely to your supply won’t keep the global sky from falling, but it will better position you and your company for survival when—or if—it does.

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