In anticipation of a trade war with the United States, manufacturers are looking for ways to mitigate its effects
11 February 10:56
Protos, a leading Spanish wine producer, is trying to protect itself from the expected imposition of duties on products from the European Union by the US President, and is sending so-called “safety stocks” to the United States to delay a possible price increase. And there are many such inventors in Europe and the rest of the world today. Reuters writes about them, Komersant ukrainskyi informs.
Luisa de Paz, the export manager of the Protos winery in the Spanish region of Ribera del Duero, told the agency that her company has already sent enough stocks to the United States to last for six months. This is in case the United States does impose tariffs on EU wine exports, which could be as high as 10%.
“We started preparing at the end of the year after he was elected,” said Louise De Pas, referring to the election of Donald Trump as President of the United States.
Stockpiling is one of the ways to mitigate the price impact
Not only Spanish winemakers, but also French cognac producers and Italian cheesemakers have accelerated the supply of their products to the United States.
“We see that companies are now shipping their imports to the United States,” says Patrick Lepperhoff, managing director of Cologne-based consulting firm Inverto. – “They have modeled scenarios of how much they might be affected by the new tariffs and decided to increase their imports to protect themselves from price increases for a certain period of time.
Opening production facilities in the US is another way to minimize losses
Some companies, according to Reuters , have announced plans to expand their investment presence in the US market and open a facility there. The agency cites several such relocation examples.
For example, a Taiwanese laptop maker may enter the United States and has already held talks in several southern states about possible investments.
A Swedish manufacturer of hygiene products and wipes may also move most of its production to the US from Mexico and Canada if tariffs are imposed.
A South Korean automaker said it plans to further localize production in the US to minimize the impact of tariffs.
A Taiwanese company that manufactures servers that use Nvidia has also begun evaluating locations for investment in the US, favoring Texas because of its proximity to Mexico and energy infrastructure.
South Korea’s Samsung Electronics is also considering moving some of its home appliance production from its Mexican plants to plants in the United States.
Chrysler’s parent company plans to assemble a new midsize pickup truck in Belvidere, Illinois.
German automaker Volkswagen AG is also considering setting up plants to assemble its high-end Audi and Porsche in the United States. This is also to somehow mitigate the effects of the new duties.
