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As the contours of global trade shift around new pacts and policies — including the newly forged U.S.-Mexico-Canada Agreement (USMCA), US-China tariffs, and the on-going Transpacific Partnership — top executives are beset by a growing list of questions about how they’ll respond. Indeed, the calculus of cross-border trade and its effects on margins, pricing and competitiveness is a fast-moving target. And, while trade agreements have always impacted business operations and growth strategies, the pace of change and the breadth and complexity of these new trade rules certainly makes it feel as if a new trade era is upon us. Indeed, three quarters of U.S. importers say that trade policy changes are the top challenge they face.
While C-suite leaders across most industries are affected in this new trade climate, industrial manufacturers with global operations and supply chains face potentially heavy exposure, as we discussed in a November blog post. From raw materials to finished components and electronics, manufacturers are looking not only at the supply chain implications, but also on other impacts on their business as prices and even availability of certain products may change unpredictably.
The auto industry, which is particularly exposed to global trade turmoil because of its global supply chains and manufacturing bases, provides an informative example. A recent survey showed that 63% of automotive executives believe USMCA will increase production costs, and 78% said finding North American suppliers (to meet the pact’s country of origin requirements) is a top priority.
This isn’t just a challenge for CEOs. Rather, it’s an all-hands-on-deck situation that requires the attention of marketing, procurement and finance chiefs, business unit leaders and more.
Of course, there are myriad questions facing the C-suite – and just as many possible answers. Below we share a few top-priority questions leaders in most industrial manufacturing companies should be asking themselves and their teams. They are grouped, generally, by function, yet it is important to note that any given issue could and should be addressed collaboratively across the C-suite.
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
CHIEF OPERATING OFFICER
CHIEF PROCUREMENT OFFICER
CHIEF MARKETING OFFICER
BUSINESS UNIT LEADERS
Answering these questions is just the beginning. Determining how best to act on those answers in a meaningful and timely way, against a tumultuous trade policy backdrop, is the ultimate challenge for members of the C-suite.
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