Market Intelligence: Tariffs to affect every aspect of the leather supply chain
Our latest Market Intelligence newsletter, in which tariffs and trade wars, naturally, feature prominently, went live on April 15.
There is an interesting suggestion that the pragmatic thinking behind the US’s 90-day pause on most of the higher tariff rates is that US companies currently have a lot of finished products and raw materials in ports or in transit. Ninety days’ breathing space will give trading partners a chance to take delivery of these products while governments try to negotiate longer-lasting trade deals with the US.
The report goes on to make it clear the bilateral dispute between China and the US remains a bigger worry. It adds that the situation is certain to affect every aspect of the global leather supply chain.
For the time being, it suggests, packers and traders in the US, and tanners in China may try to find ways of using third countries to sell and buy raw material without incurring the high tariffs trade between the two partners still faces.
However, the report warns that this will not help with tariffs that are then levied on finished goods coming back into the US.
It concludes: “Nevertheless, there is no doubt that the next few weeks will decide which direction goods and production will take, and what the reaction of consumers to the erratic financial markets and the general uncertainty will be.”
Image: Port of Long Beach.
