This week’s business news was dominated by President Trump’s announcement that the U.S. will impose tariffs on steel and aluminum imports starting next week, imposing a 10 percent tariff for aluminum and a 25 percent tariff for steel. The announcement was met by a tumble in the stock market and a chorus of voices calling the move a big mistake and very disruptive to global supply chains.

Two weeks ago, the Commerce Department recommended heavy quotas and tariffs on steel and aluminum imports.  The Department reported that steel is especially important to national security and that the current import flows are adversely impacting the steel industry and are weakening the US economy and impairing our national security.

Fortunately the US economy is strong right now and US companies are very good at restructuring their supply chains to manage disruptions. But the real risk comes from the potential ripple effects that might undermine the entire global trade system.

Consumer Products:  Lumber costs are turning sharply upward, assuming buyers can even get wood supplies delivered. A series of fires across prime forests along with a trade dispute between the U.S. and Canada have curbed the amount of timber in the world market.  One product in Taiwan is particularly feeling the pinch, toilet paper producers.  We sometimes take for granted the basic consumer necessities and when their supply is disrupted, we panic.

Food Products:  New competitors, tighter margins, sustainability and food safety concerns are among the key challenges facing grocers, distributors and growers this year, but a major concern throughout the industry is spoilage.  In fact some Amazon investors this week challenged the company to discuss how much food from their growing grocery stores go to waste.   Meanwhile Walmart is developing a technology, that will detect defects in fruits and vegetables and will be able to eventually predict the exact shelf life of the produce.  The use of drones will allow this technology to monitor all the farms of Walmart’s suppliers.

Retail/E-Commerce:  The world of digital commerce has introduced more risk and complexity than logistics and supply chain professionals have ever faced.  And one sector that has been roiled by these dramatic changes is the retail market and especially department store chains. The industry giant, Macys, has designed a retrenchment strategy that has seen it close 83 stores but at the same time has add some outlets for targeted markets. But these new sites will be smaller, and will demand less inventory.  Meanwhile Kohl’s has embarked on a strategy of using their existing stores as the heart of their e-commerce strategy.

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GLDPartners is an international investment and advisory firm that specializes in revenue and infrastructure development projects at and around high-opportunity airports, seaports and strategic trade and logistics hubs.  The firm supports global manufacturers and companies with retail distribution operations with network design strategy and facility location analytics.  GLDPartners’ clients and market perspective is global and the firm is headquartered in Scottsdale, Arizona, with offices in New York, Washington DC and in the UK.  www.gldpartners.com