Do Not Topple The Global Economy Mr Trump

I have nothing against you President Trump. I have nothing for you either.

But, when I heard of the directive to manufacture  iPhones in USA, I had to write this post.

This is one of the weakest ideas I have heard from Supply Chain point of view, and I am not indulging in a political debate.

I am merely pointing out what even a supply chain new comer will tell you – with the current global configuration of supply network of companies such as Apple, any meaningful change of this nature will be impossible to achieve.

Why?

Because, Apple supply chain has been extensively studied and documented. One of the better reports (though a bit dated) is located at this link and I am sourcing a few relevant data below from this report. For example, take a look at the following table showing key supply chain activity location sourced from (https://www.apec.org/-/media/APEC/Publications/2013/7/Global-Supply-Chain-Operation-in-the-APEC-Region-Case-Study-of-the-Electrical-and-Electronics-Indust/2013_psu_GSC_EE.pdf):

It is clear almost all the activities happen in the Far-East.  Now take a look at another table, also sourced from the same report (https://www.apec.org/-/media/APEC/Publications/2013/7/Global-Supply-Chain-Operation-in-the-APEC-Region-Case-Study-of-the-Electrical-and-Electronics-Indust/2013_psu_GSC_EE.pdf):

Global Supply Chain Group

By Peacefulmovements [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], from Wikimedia Commons

None of this is news, even to neophytes in the game of business. To unravel and roll back supply chain globalisation achieved over decades will be near impossible, even for the most determined politician.

Global economy is delicately perched, and precariously balanced. It is also top heavy – just like the picture.

It does not matter how we got here.

It does not even matter which stone represents whom – bankers, politicians, business people, academics, common man – we are all going to fall in a heap together if a massive re-balancing of the stones is attempted at this juncture.

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Vivek Sood

I write about "The Supply Chain CEOs", "The 5-STAR Business Networks", and, how to "Unchain Your Corporation". In my work, I help create extraordinary corporate results using several 'unique' supply chain methodologies. Contact me for interesting, high impact projects, or, to get access to my IP for creating transformations using these methodologies.

  • Glblist says:

    In today’s news Ray Dalio is quoted as sayinh
    “I see significant other problems ahead in two or three years,” Dalio said, “because of the combined effects of debt, pension and health-care burdens, the wealth and opportunity gap that create polarity and populism, and less effectiveness of central-bank policies that makes it more difficult to reverse a downturn.”

    • Vivek Sood says:

      Sharp comment Globlist – fits with the context but I have to say that no one, not even Ray Dalio has the magic crystal ball. Sure – the logic dictates that you cannot keep running an economy on deficit, debt and currency manipulation. Eventually, the fundamentals will catch up with the economy. Whether it happens in 2 years or 2 months, or even 20 years is anyone’s guess. My point is different – it can happen a lot sooner if the President tries to unravel the complex global supply chains.

  • Isaac says:

    It may be effect global economy as Mr. Trump has a president of it.
    Read this Today’s Political Scene Poses Long-Term Risks:
    On January 11, the World Economic Forum released its annual assessment of global risks in the coming decade. The top two challenges that face the world are rising inequality and social polarization — topics that certainly affected the world in 2016 and will continue to have an effect on European elections and markets in 2017.

    “The WEF said that the share of income going to the top 1 percent of earners has increased in countries including the U.S., Britain, Australia, and Canada since the 1980s,” Alex Morales writes at Bloomberg. “The policy of quantitative easing, whereby central banks make large-scale purchases of government bonds, has exacerbated inequality by enriching owners of financial assets.”

    No one knows exactly what a Trump presidency will do to the American economy, the global markets, and international relations. While there are reasons to be optimistic, even Trump’s biggest political and financial supports are approaching him with caution. No one seems willing to jump onboard until his bounty of words turns into actions. (https://bit.ly/2IjQIe1)

  • Iyer SCM Specialist says:

    That scenario appears more like the one President Donald Trump finds himself stuck in after Canada started collecting duties on a variety of U.S. products on Sunday, including orange juice, yogurt, and whiskey. The Canadians will be reinforced by Mexico and China later this week in responding to the Trump administration’s tariffs when the two countries take aim at the U.S. pork and soybean industries.

    • Renukant GSC says:

      A full-blown trade war would punch a hole in global economic growth because of reduced trade volume, supply chain disruptions, and lost confidence.

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