"In two months, shelves in the United States could look like those in third-world countries," predicted T.H. Tung, the chairman of Pegatron. "People will go to department stores and markets to find nothing but empty shelves, simply because everyone is waiting to see what happens," he continued, referring to the cacophony of Donald Trump's tariffs.
The big void on the shelf
These statements made to Reuters paint a rather bleak future for American consumers. It is probably an exaggeration to predict empty stores, but the repeated about-faces of the American president do not help companies to see clearly the strategy to adopt.
T.H. Tung, whose company supplies Apple, among others, believes that US importers will not benefit from the current period, where customs duties have been reduced to 10% for almost all foreign products entering the United States (except for Chinese products, taxed at 145%). It is indeed difficult to accelerate deliveries if importers believe that this 10% could jump in the coming days.
The measures taken by Donald Trump have disrupted logistics at the heart of the global supply chain, laments the head of Pegatron. The company nevertheless intends to maintain its projects. "It is not because Trump increases customs duties that the rest of the world will do the same. Taiwanese subcontractors are maintaining their projects abroad," he explained.
He adds: "We are not going to immediately adjust our plans to long term for two or three months of price variations. Production bases require long-term planning. In the short term, nothing changes, but who knows what will happen in six months or a year.
Pegatron had accelerated the diversification of its production during the first Trump term, expanding into Mexico and Southeast Asia. A movement that is not about to stop.
Source: Reuters
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