Tariffs Spurred a Third of Supply Chain ‘Leaders’ to Eye Leaving China, Gartner Survey Says
Section 301 tariff costs motivated a third of global supply chain “leaders” to move sourcing out of China or to make plans to do so in the next three years, Gartner reported June 24. Gartner, a research and advisory company,…
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canvassed 260 fulfillment companies and contract manufacturers in February and March and found COVID-19 was “only one of several disruptions that have put global supply chains under pressure,” it said. The U.S.-China trade war “made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks,” Gartner said. China for decades was the “go-to destination for high-quality, low-cost manufacturing,” but the tariffs abruptly changed that profile, it said. The Section 301 duties raised supply chain costs by up to 10% for more than 40% of respondents, it said. For more than a quarter of them, “the impact has been even higher,” it said. Vietnam, India and Mexico are top alternative countries of origin. The desire to make supply networks more “resilient” is the second main motivator behind tariffs chasing companies out of China, it said.