Battling the Trade War and COVID-19: Rethinking Global Supply Chains in a Time of Crisis

Speaker: Wilson Zhu, the Chief Operating Officer of Li & Fung

Event summary:

  • The originator of the US-China trade war was not actually about the “trade deficit”, but rather a lack of “trust” between the two countries.
  • Trade deficit could be a “misleading concept”–while the iPhone was claimed to be “Made in China”, it wasn’t manufactured there at all—instead, China only played the role of a “middle-man of the supply chain.” Such a misunderstanding is within the ancient country of origin rules used in international trade.
  • The “Made in China” label is becoming “obsolete.” As China continues to expand its supply chain globally, ports in China are evolving into “managers” of products “Made in the world.”
  • Despite the tariff war and the pandemic, interestingly enough, it seems some apparel sourcing orders are returning from India and Vietnam to China. Further, China’s emergence as a lucrative apparel consumption market implies huge business opportunities for fashion brands and retailers.
  • There is still great hope for the global apparel supply chain in the post-Covid world. Less economically developed countries like Vietnam are now mimicking the former industrialization of China in its factories with the help of advanced technology. And, the United States continues to advance the efficiency and sophistication of its textile production.  It seems that all in all, the only way to make it through this crisis successfully, is through global collaboration, not conflict.

(summarized by Andrea Attinello)

Author: Sheng Lu

Professor @ University of Delaware

One thought on “Battling the Trade War and COVID-19: Rethinking Global Supply Chains in a Time of Crisis”

  1. After watching this video, it is apparent that the phrase “Made in China” is starting to phase out. I have found it intriguing that through this video and FASH455 that the U.S. has taken action to becoming less dependent on China. Due to the trade war many U.S. companies are looking to move their sourcing to other less developed countries. Moving sourcing orders from China to other Asian countries has increased within the past few years. They also explored the benefits of the free trade agreement and trade preference programs as well as prices their products higher to counteract the impact of the tariff action. The combination of all of these actions are only benefiting the U.S. in the long run. They are moving their focus for manufacturing and production to other less developed countries like Vietnam where ultimately they are willing to perform the same tasks at a cheaper cost. This could lead to Vietnam having a competitive advantage. However, would the U.S. ever completely move away from importing from China after everything they have given to us?

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