Caixin
Caixin Global – Latest China News & Headlines

Home >

TRENDING
ByteDance Targets July Launch of Upgraded AI Video Model
Embodied AI Startup Kunlunxing Lands Multibillion Yuan Raise
Europe Has a Lot to Learn From China About Electric Trucks, Volvo CTO Says
LATEST
Europe Has a Lot to Learn From China About Electric Trucks, Volvo CTO Says
Embodied AI Startup Kunlunxing Lands Multibillion Yuan Raise
ByteDance Targets July Launch of Upgraded AI Video Model
China’s Starlink Challenger Seeks Up to $2.2 Billion for Satellite Network Push
New Model Propels Zhipu AI’s Market Value to Record HK$1 Trillion
In AI Pitch, Alibaba Chairman Urges Europe to Look Beyond U.S. Tech
Cover Story: China’s AI Boom Is Rewiring Its Power Grid
In Depth: How AI Is Rewiring White-Collar Work in China
Chipmaker YMTC Cedes Control of Foundry Unit Ahead of Mega IPO
Chinese Startup Manifold AI Raises Fresh Funding as Investors Bet on ‘World Models’
Crealights Takes Step Closer to Hong Kong IPO as Data Center Boom Fuels Growth Prospects
Tencent Lets AI Agent Make Purchases Through WeChat Pay
Galaxea AI Chief Says China Could Lead Robotics Models Within Three Years
SiliconFlow Raises $294 Million as China’s AI Inference Demand Surges
Ant Revamps Alipay With AI Assistant in Biggest App Overhaul
New Model Sends Zhipu AI’s Stock Soaring
DJI, Insta360 File Competing U.S. Patent Lawsuits Over Camera Tech
Cover Story: When Employees Leave, Their AI Clones Carry on Working
AI Stocks Zhipu, MiniMax Slide as Lock-Up Expirations Near
Japan’s Chip Exports to China Surge as Bilateral Trade Rebounds

By Bloomberg / Dec 07, 2018 09:27 AM / Business & Tech

Pedestrians ride an escalator in the Lujiazui Financial District in Shanghai. Photo: Bloomberg

Pedestrians ride an escalator in the Lujiazui Financial District in Shanghai. Photo: Bloomberg

U.S. firms operating in Asia are adapting to global trade uncertainty with a range of survival tactics, from re-branding products to tweaking their supply chains.

“All of the tools in the toolbox are being utilized,” said Cindy Owens, an associate at law firm Baker McKenzie Wong & Leow and member of trade group AmCham Singapore. Her clients are pursuing a lot of “nuts and bolts” solutions as some of the bigger-picture questions remain unresolved, she said.

Gerry Mattios, executive vice president at consultancy firm Bain & Co. Inc. in Southeast Asia and also an AmCham member, says firms are tinkering around the edges to ease the negative impact of U.S. and Chinese tariffs. Judging by somewhat benign U.S. consumer inflation, firms have managed to absorb the extra costs or pass them on to parts of their supply chain, Mattios said.

Owens and Mattios spoke after the release of a report surveying the trade-war impact on Singapore’s AmCham members. The results showed that about half of firms are delaying or canceling investment decisions.

As polling and politics suggest more of a wait-and-see mode, many companies now have an extra reason to accelerate development plans. Owens and Mattios outlined several actions that they’re seeing firms already pursuing:

Your Tariff-Era Survival Kit

Re-labeling products to keep up with customs regulations Tweaking supply chain footprint in order to alter a product’s country of origin Restructuring transfer pricing so that products are revalued down (and thus carry lower tariffs) Re-visiting provisions in existing free-trade agreements to explore options for smoother operations Moving orders and/or labor to Southeast Asia, and considering production relocation Distributing cost of higher tariffs across the firm’s supply chain Accelerating automation plans Shortening the supply chain, either with fewer locations or closer sites, to trim costs

“Historically a lot of companies would let something sit in the tariff code, and if it isn’t broken, don’t fix it,” Owens said of products being wrongly labeled as technology and customs rules evolve. “But now there’s a reason to revisit that,” and some clients have found they can escape higher duties just by cleaning up their product labels.

For other firms, the trade war has offered opportunities to forge ahead on strategic plans they’ve penciled in for years, said Mattios. On a bigger scale, automation is getting a huge trade-war push. The consumer electronics industry already has shown great advances there, but the apparel and automotive parts sectors are also catching up, he said.

As for the truce forged from last weekend’s U.S.-China meetings, both Owens and Mattios agreed it doesn’t change much from a company perspective.

What could change things for the worse: if the U.S. follows through on its now-old threat to boost the tariff rate on $200 billion in Chinese goods, or if Chinese companies retaliate in new ways against American firms.

Read full coverage of the U.S.-China trade war


Share this article
Open WeChat and scan the QR code