As trade relations between the U.S. and Asia continue to grapple with various challenges, Atlanta-based firms are exploring innovative solutions to maintain commerce despite regulatory hurdles.
While tensions between the U.S. and China have eased somewhat since May, businesses remain vigilant in anticipating the ramifications of potential future tariff changes and geopolitical conflicts.
Experts gathered at a breakfast event on June 25, hosted by the Hong Kong Association of Atlanta, underscored the impact of this uncertainty on trade strategies, resulting in heightened costs and the need for creative collaboration among companies.
This gathering was part of a two-day roadshow featuring Maisie Ho, director of the Hong Kong Economic and Trade Office in New York, which aimed to discuss trade openings despite current challenges.
Aventure Aviation, an exporter of airplane spare parts, exemplifies the struggles faced by many firms engaged in international trade.
With about 55 percent of its sales generated internationally, Aventure has found itself under pressure from tariffs affecting both incoming and outgoing shipments.
CEO Zaheer Faruqi highlighted a troubling experience when tariffs led to unpredictable landed costs for clients in China.
“Customers in China faced uncertainty regarding their costs as their shipments arrived,” he explained. “Many are now rerouting parts through countries like Thailand or Singapore to mitigate the risks associated with tariffs.”
On the U.S. front, Aventure’s expansion plans faced delays as rising construction material costs forced the company to rethink their strategies.
“The quotes for construction materials kept changing, leading us to halt new headquarters plans and search for alternatives,” Faruqi noted during the meeting at the Metro Atlanta Chamber.
The demand for diversified sourcing has surged across industries, especially during the pandemic, according to Sean Flaherty, vice president of strategy and marketing at UPS Supply Chain Solutions, Atlanta’s major firm specializing in global trade logistics.
Flaherty emphasized that agility is key as circumstances evolve rapidly, and companies are urged to collaborate with partners to navigate these complex interrelated issues.
“No business is facing this situation alone, and working together can lighten the load,” he stated.
Discussions around tariff costs remain contentious, as revealed by Flaherty’s insights into the responsibilities outlined in incoterms, which govern who remits tariffs between shippers and importers.
The more pressing matter is determining how companies handle rising costs, which often requires a strategic decision based on multiple factors.
Warren Clark pointed out that many U.S. companies have come under scrutiny from Chinese authorities for pushing suppliers to offer significant discounts to cope with these added expenses.
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