Will Procurement Costs Remain Stable?
Trump’s Plan for Outsourcing
Trump’s victory has many concerned for how he will employ some of his claims during his campaign. The Procurement industry especially has an eye on how trade will affect their business in the future, especially in terms of costs related to outsourcing.
Trump claimed he would impose a 35% tax on imports from foreign plants. Spend Matters’ recent article points to India and China as two examples.
For India, a 35% increase would still leave a large gap between labor cost there and in America. In China, the gap has already narrowed with rising labor costs in China so many companies are already moving their labor back to the States.
While many industries fear these changes, workers affected by industry downturns have a reason to look forward to potential opportunities ahead.
How to Prepare
35% Import Tax or Not?
Though the effects of a 35% import tax may not be as drastic as once predicted, preparing now will protect you from whatever may come. Focus on risk management and supplier diversity. Relying too much on one supplier may leave you vulnerable if major trade changes are in the near future.
How to get prepared?