4. CountryExportsImportsTrade Deficit%of Total TradeAll
Countries1,754.602,832.90-1,078.30100.00%Top 15
Countries1,233.302,205.60-972.3075.00%Canada307.6357.2-
49.6014.50%Mexico276.5384.7-108.2014.40%China151.1506.4-
355.3014.30%Japan75135.1-60.104.60%Germany65.2135.2-
70.004.40%Korea, South65.895-29.203.50%United
Kingdom61.556.45.102.60%Taiwan36.977.1-
40.202.50%India40.173.3-33.202.50%Vietnam10.9101.9-
91.002.50%Netherlands53.635.318.301.90%Ireland13.673.7-
60.101.90%Switzerland2463-39.001.90%Italy21.761-
39.301.80%France3050.3-20.301.80%
US Global Trade
6
But What are Trade Deficits Really?
Trade deficits only tell the final step of the story
No one who understands supply chains or understands global
business thinks trade deficits matter
7iPhone 7 Sales Cost $ 649.00 Foxconn Factory Cost $ 237.45
U.S. (design/components) $ 68.00 Japan (components) $
68.00 Taiwan (Assembly) $ 48.00 South Korea (components) $
17.00 China (Labor/Battery) $ 8.50
$237.45
$68
5. $68
$48
$17
We are having some big international trade problems though
8
Today in Global Trade
9
Total Imports Port of Los Angeles 2019-2022
6. Total Imports Jan'19 Feb'19 Mar'19 Apr'19 May'19
Jun'19 Jul'19 Aug'19 Sep'19 Oct'19 Nov'19
Dec'19 Jan'20 Feb'20 Mar'20 Apr'20 May'20
Jun'20 Jul'20 Aug'20 Sep'20 Oct'20 Nov'20
Dec'20 Jan'21 Feb'21 Mar'21 Apr'21 May'21
Jun'21 Jul'21 Aug'21 Sep'21 Oct'21 Nov'21
Dec'21 Jan'22 Feb'22 Mar'22 445730.5
364550.55 311053.90000000002 378343.5
440313.4 405824 487604.9 449085.8 414680.75
402452.5 380437.65 383794.25 425761.5
278735.05 231607.3 374186 306366 369256.9
457196.7 517024.75 476681.55 510812.8
466067.4 462655.3 437863.2 414154.5 493465.25
494681.59999999998 540803.1 469553.6 469481.55
488873.85 469570.1 468713.60000000003
405309.3 387523.15 428474.25 426812.45
497775.85
Congestion in the San Pedro Bay
Too much focus on 1 path
We have a system designed for a single primary pathway to
move all Asian goods to all American consumers
Not the bullet-proof solution we were thinking we had.
10
Congestion on Chicago Rail lines – about 20 miles
Freight imbalance makes it a lot more expensive to go from LA
to Dallas than from Dallas to LA
7. Multiple Bottlenecks
Even if we eliminate one bottleneck – we’ll have several more
to deal with before we can get goods to the consumers
11
Protect Key Goods
White House report recommends greater control over key
industries including semiconductor, high-capacity batteries,
pharmaceuticals, and rare-earth metals/minerals
12
8. The U.S. only accounted for 12% of global production in 2021
Down from 37% in 1990
Diversify Everything Else
Like the move towards service over cost in domestic supply
chains, international chains must become more geared towards
flexibility and customer service
China+1 Policy
Pan American Manufacturing
Multiple points of entry
Alternate ports (and the infrastructure behind them)
Direct intermodal shipping
Salt Lake City Pilot – could work in Phoenix.
13
Lots of empty boxes
Again through, we do export plenty of services
14
US Exports by Type 2019-2022
12. Potential Problem Areas in Global Purchasing (cont.)
18
Tariffs and duties
Administration costs
Legal issues
Logistics and transportation
Language
Communications
Cultural and social customs
Ethics and social responsibility
US: A-Ok
Japan: Money
Brazil: Vulgar/ Offensive
Stock Market Reaction to Sustainability Issues
external (0,0) 1994-00 2001-07 2008-12 1.3308E-3-
2.7147999999999999E-3 -3.637E-3 internal (0,0) 1994-00
2001-07 2008-12 -8.0543000000000003E-3-
3.9199999999999999E-3 -1.2474000000000001E-3
Regional Trade Agreements
13. Efforts to eliminate trade barriers result in bilateral, regional,
and global trade agreements
Implications for supply managers:
know the major trading partners with their countries
know what trade agreements are in place
know what opportunities exist in emerging markets
Data on trading patterns of countries and regional trading
blocks available from the World Trade Organization (wto.org)
Examples of Regional Trade Agreements
United States Mexico Canada Agreement (USMCA)
Canada, United States, and Mexico – approved in December,
2019
The European Union (EU)
2013 the EU included 28 member states
Association of South East Asian Nations (ASEAN)
10 South East Asian countries
Mercosur (El Mercado Común del Sur)
Argentina, Brazil, Paraguay, Uruguay, Venezuela, and Bolivia
in a customs union plus associate members
Trans-Pacific Partnership (TPP)
U.S. and 11 other Pacific Countries
China has 14 Free Trade Agreement partners
Recently altered by “Brexit”
14. USMCA
21
RankCountryExportsImportsTotal Trade% of Total Trade---
Total, All Countries1,372.502,096.703,469.10100.00%---Total,
Top 15
Countries9681,644.002,611.9075.30%1Mexico216.4301.3517.71
4.90%2Canada246.8267.251414.80%3China87.6382.1469.813.5
0%4Japan61.9120.6182.65.30%5Germany50.7106.8157.54.50%
2 most important partners
The Case For
Would add 796K export jobs to US
Pay 18% more than avg. job
Rule Maker, not Rule Taker
Raise standards of key Chinese trading partners
IP Protection
9% of all US manufacturers hold patents. But 89% of all US
exporters do
Theft of IP costs US $300B/year
Estimated to add $3T to world wealth
ISDS allows investors the right to use dispute settlement
proceedings against a foreign government
22
The Case Against
Would slow manufacturing job growth in US by 20%
121K fewer manufacturing jobs by 2030
US already has bilateral free trade w/many TPP countries
16. Global Commodity Management Organization
Large number of common requirements across facilities or
business units and a geographically dispersed supply base
International Purchasing Office (IPO)
Separate purchasing organization usually reporting to
corporate/head office purchasing department
VP of Procurement
CPO Euro
CPO Asia
CPO Americas
VP of Procurement
Tin
19. Types of Countertrade: Offsets
Part of the countertrade must be used to purchase government
and/or military-related exports
The selling company agrees to purchase a given percentage of
the sales price in the customer country
Types of Countertrade: Counterpurchase
Requires the initial exporter to buy (or to find a buyer for) a
specified value of goods (often stated as a percentage of the
value of the original export) from the original importer during a
specified time period
Acceptance of these terms allowed HKM to beat out US and UK
competitors for $9M Crane Deal
Types of Countertrade: Buyback/Compensation
The selling firm agrees to set up a producing plant in the buying
country or to sell the country capital equipment and/or
20. technology
The original seller agrees to buy back a specified amount of
what is produced by the plant, equipment, or technology.
Buyback agreements can span 10 or more years
Types of Countertrade: Switchtrade
A third party applies its “credits” to a bilateral clearing
arrangement
The credits are used to buy goods and/or services from the
company or country in deficit
Can be handled by a broker or trading house
Final Thoughts on Countertrade
Between 10-20% of all global trade (so like $2-$4 trillion)
US & some Euro Gov’s official position is that countertrade
hinders free markets – But they do not stand in the way of their
firms engaging in it
21. 32
For Next Class
33
Global Trade pt. 2
AOL Extra Credit Quiz will be posted on Canvas
Course Evaluation
The Inventory Roller Coaster
34 ComparisonZaraIndustry averageAdapt couture designs,
manufactures, distributes, and retails clothesWithin 2 weeks6
monthsUnsold itemsLess than 10% of stock17% - 20% of
stockInventory turnover/year123 – 4Pre-planned Fab
Capacity15%80+%
Succeed through lean inventory
Succeed through stockpiling inventory
Now we have way too much inventory – classic bullwhip
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In paper of 7-8 pages (APA-style paper), describe what you
learned about teaching and learning in kindergarten ICT
classroom during the practice there, and how you plan to
implement it in your teaching practice in the future.
Your paper must include the following sections:
1. State 3-5 major take-aways on teaching and learning and
support them with the examples from the practice you analyzed
and reflected on during the course.
2. Share 1-2 learning strategies and evidence-based practices
that you observed/learned and plan to implement in your
teaching. You may include their description in the attachment to
the paper. In the paper describe them briefly and explain why
you find them effective.
3. Design the next steps you want to develop your
professionalism as defined in Danielson rubric.
· Integrity and ethical conduct
· Receptivity to feedback from colleagues
· Advocacy
25. · Relationship with colleagues
· Involvement in culture of professional inquiry
4. Summarize what you plan to learn and implement in your
teaching to support student learning.
Global Logistics pt. 2
The Tradewar
China had been US’s #1 trade partner since 2015
Total value of both imports and exports down significantly from
2019-early 2020
China to US down 11%
US to China down 21%
$314 billion in first 6 months of 2018 vs. $271 billion in 2019
Has hurt both sides as well as global economy
Exasperated by COVID-19
2
$28 billion subsidies – more than double the auto bailout
26. China – U.S. Trade
Growing since China joined the WTO in 2001
In 1991 China was only 1% of U.S. imports
Chinese tariffs went from 40% in the 1990’s to 10% in 2005
US market is fairly open – Chinese is still somewhat protected.
Especially in specific sectors
3
China & Intellectual Property
China has a history of IP theft and “forced technology
transfers”
Essentially you have to give them your designs to have the
privilege of selling in the 20% of the world that makes up the
Chinese market
EU, Canada and US sued over this in 2006
Pre-WTO China stole about $1billion from US annually
In 2019 it was be between $225-$600 billion
4
<
Are Tariffs Good or Bad?
5
28. Potential Problem Areas in Global Purchasing
7
Source location and evaluation
Lead/delivery time
Turns out other places are further away
Expediting
Political, labor and security problems
Hidden costs
Currency fluctuations
Payment methods
Quality
Warranties and claims
Mohammad bin Salman – slowed down oil production to raise
prices. Bad for oil companies & the environment, good for
drivers
Strong dollar can
limit ability of US firms to export goods
Potential Problem Areas in Global Purchasing (cont.)
8
Tariffs and duties
Administration costs
Legal issues
Logistics and transportation
29. Language
Communications
Cultural and social customs
Ethics and social responsibility
US: A-Ok
Japan: Money
Brazil: Vulgar/ Offensive
Stock Market Reaction to Sustainability Issues
external (0,0) 1994-00 2001-07 2008-12 1.3308E-3-
2.7147999999999999E-3 -3.637E-3 internal (0,0) 1994-00
2001-07 2008-12 -8.0543000000000003E-3-
3.9199999999999999E-3 -1.2474000000000001E-3
Regional Trade Agreements
Efforts to eliminate trade barriers result in bilateral, regional,
and global trade agreements
Implications for supply managers:
know the major trading partners with their countries
know what trade agreements are in place
know what opportunities exist in emerging markets
Data on trading patterns of countries and regional trading
30. blocks available from the World Trade Organization (wto.org)
Examples of Regional Trade Agreements
United States Mexico Canada Agreement (USMCA)
Canada, United States, and Mexico – approved in December,
2019
The European Union (EU)
2013 the EU included 28 member states
Association of South East Asian Nations (ASEAN)
10 South East Asian countries
Mercosur (El Mercado Común del Sur)
Argentina, Brazil, Paraguay, Uruguay, Venezuela, and Bolivia
in a customs union plus associate members
Trans-Pacific Partnership (TPP)
U.S. and 11 other Pacific Countries
China has 14 Free Trade Agreement partners
Recently rocked by “Brexit”
The Case For
Would add 796K export jobs to US
Pay 18% more than avg. job
Rule Maker, not Rule Taker
Raise standards of key Chinese trading partners
IP Protection
9% of all US manufacturers hold patents. But 89% of all US
32. International Purchasing Office (IPO)
Separate purchasing organization usually reporting to
corporate/head office purchasing department
VP of Procurement
CPO Euro
CPO Asia
CPO Americas
VP of Procurement
Tin
Gold
Silicon
35. The selling company agrees to purchase a given percentage of
the sales price in the customer country
Types of Countertrade: Counterpurchase
Requires the initial exporter to buy (or to find a buyer for) a
specified value of goods (often stated as a percentage of the
value of the original export) from the original importer during a
specified time period
Acceptance of these terms allowed HKM to beat out US and UK
competitors for $9M Crane Deal
Types of Countertrade: Buyback/Compensation
The selling firm agrees to set up a producing plant in the buying
country or to sell the country capital equipment and/or
technology
The original seller agrees to buy back a specified amount of
what is produced by the plant, equipment, or technology.
36. Buyback agreements can span 10 or more years
Types of Countertrade: Switchtrade
A third party applies its “credits” to a bilateral clearing
arrangement
The credits are used to buy goods and/or services from the
company or country in deficit
Can be handled by a broker or trading house
Final Thoughts on Countertrade
Between 10-20% of all global trade (so like $2-$4 trillion)
US & some Euro Gov’s official position is that countertrade
hinders free markets – But they do not stand in the way of their
firms engaging in it
20
42. - Buyer assumes responsibility for risk/damage/additional
transport costs once goods are delivered to specified port
Bonus Time
28
AOL quiz available online
until December 14th @ 11:59pm
At first this will appear as being out of 11out of 11
Course Evaluation
Assignment 11 up at the end of class – due tonight (12/6) at
11:59pm (so before Tuesday becomes Wednesday)
For Next Class
29
Wrap-Up/Review
Get those cheat sheets ready
Similarly, Assignment #11
needs to be graded and then
made EC
Please take the course eval here:
https://colostate.instructure.com/courses/121140/external_tools/
5468
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Global Logistics & The Future of Supply Chains
Use materials from the Global Logistics pt's 1 and 2, along with
anything from the
course, and any outside sources you might find, to answer the
following questions:
1) What do you believe the biggest issues facing global supply
chains today are?
2) What do you think global supply chains will look like 25
years from now?
3) If you were running a large multinational firm that was
sourcing something complex
(e.g. cars, electronics), how would you structure your supply
chain? What do you
believe the pros and cons of this approach might be?
Write between 350-550 words for this. Please use complete
sentences and paragraphs
(not just lists of bullets). I want to hear your opinion here,
please though make sure to
support it using facts from the class or reputable outside sources
- we're looking for
logical arguments here.
