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Many firms lack contingency plans for trade war: survey

06
Dec '19
Pic: Shutterstock
Pic: Shutterstock
More than a quarter of multinational firms have not prepared contingency plans to meet any possible eventuality arising out of the US-China trade conflict, says a survey in Shanghai by a DHL subsidiary. Forty eight per cent from the engineering and manufacturing industry and 40 per cent from the automotive mobility sector had no contingency plans at all.

Both these fields have been heavily targeted by both countries in the trade war.

The survey by DHL Resilience360, a supply chain risk management software platform under Deutsche Post AG's (DPWGn.DE) courier unit, included 267 anonymous responses from supply chain executives across industries including healthcare, automotive and consumer.

Over half of respondents were from companies with annual revenue of over $142 million and most were from the United States and European Union, according to a news agency report.

Of those that had decided against relocating or shifting production out of China, some said they were unaffected by the trade war. However, 43 per cent said long-established connections with Chinese factories and suppliers as well cost and time were among reasons for staying put. Just 8 per cent of respondents said they expected tariffs to eventually be removed.

Of the 12 per cent of respondents that have moved manufacturing out of China, some said they faced headaches such as a lack of skilled labor, heavy port congestion and maintaining supplier quality, the survey showed. India and Vietnam were among the most popular alternative locations.

Fibre2Fashion News Desk (DS)


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