Managing trade in a challenging ‘new normal’

Managing trade in a challenging ‘new normal’

Considering the breadth of international trade developments over the last few years, it is easy to conclude that constant change is the new normal.

Import tariffs, free trade agreements, and Brexit are top of mind for many people, but other trade-related actions are also weighing heavily on how business is conducted internationally. Economic sanctions programs and their structures are continuously evolving, trade disputes are increasing, and regulators are working to implement export controls regulations that can keep up with emerging technology.

As supply chains continue to expand, trade compliance and supply chain professionals face an increasingly challenging environment. The key to surviving — and perhaps even thriving — in this changing trade environment is building a highly collaborative work team that is driven to cultivate resilience.

Collaborative communication

Together, trade compliance and supply chain professionals must take time to fully examine and understand what any new regulatory change means, as well as determine the scope of the action and how it impacts their company. In an environment where some regulatory actions are beyond the range of experience for many trade compliance and supply chain professionals, this can be difficult. In addition to understanding what items, transactions, or entities are involved, one must also consider whether there are any alternative actions that can be implemented to reduce the impact.

Kathy Canaan, Logistics and Export Compliance, Fluor

Reducing impact means making sure the appropriate stakeholders are engaged. This can be difficult, but it is critical to formulating actionable processes. Consider organizational structure: if the sales team is instrumental to a successful process change or risk mitigation procedure, make sure to get them to the table.

This meeting of the minds is where a company’s resilience with respect to international trade challenges is built. Create real opportunities for collaboration. Having a trade compliance professional present, fully engaged, and perhaps leading the meeting can create the cross-functional engagement necessary to turn challenges into solutions. Rather than a wholly negative focus, the team should work from the mindset of discovering the art of the possible.

From “what if?” to “what next?”

Arming sales people and supply chain leaders with a deep understanding of what new regulatory changes mean — i.e., what is allowed and what is prohibited — provides an opportunity for proactive and creative thinking. If the right players are involved, simply asking “What if...?” can lead to proactive solutions and strategies that mitigate some of the risks associated with ongoing regulatory changes.

After considering these “what if?” scenarios, it is important to consider “what’s next?” There are numerous factors in this process that have to be considered. The team should examine the downstream effects regulatory change will have on the supply chain, including how suppliers are impacted and what adjustments they will make, as well as how clients — and competitors — will react and what they will expect.

Shippers should also research how enforcement agencies will administer regulatory changes. One has to determine what procedures exist, what avenues there are for protest or appeal, and what adjustment period there will be.

Finally, understanding how the targets of the regulatory actions will respond is critical. The implementation of Section 232 tariffs on the import of aluminum and steel articles, for example, was certain to be met with reciprocal actions from the affected exporting countries. Similarly, China’s response to the implementation of Section 301 tariffs required some consideration of trade retaliation.

Certainly, the proliferation of trade-related actions over the last several years lends a great deal more complexity to businesses operating internationally. However, these complexities can also create an opportunity for a company to improve its internal cooperation by necessitating better communication and collaboration.

Kathy Canaan joined the “Procurement and Supply Chain Strategies in the Trade War Era” roundtable panel discussion during the Journal of Commerce project cargo and breakbulk conference held April 29-May 1 in New Orleans. Her expertise on this topic is recognized across the project and breakbulk logistics industry. Industry members interested in collaborating with Canaan and other experts on this issue can contact her at