​​​​​Supply chain scholars disagreed on how likely companies are to move production out of China, either due to tariffs or to a desire to diversify sourcing, but agreed that companies aren't likely to be ready for demand shocks without government support. They spoke Dec. 4 during a webinar hosted by the Center for Global Development.

Amadeus Capital Partners agreed to invest $7 million in Altana AI, “a start-up working with governments, global enterprises, and supply chain solutions providers to de-risk global supply chains,” the companies said in a news release. Altana customers “gain global supply chain visibility and risk intelligence through the Altana Atlas -- a shared artificial intelligence model of the global supply chain.”

Wireless home audio systems maker Sonos reported higher-than-expected revenue, an $18.4 million profit and growth in new households in Q4. Gross margin increased 530 basis points to 47.5% as the company was “largely exempt from tariffs,” except for a rate of 7.5% on component products in September and 25% on accessories throughout the quarter, Chief Financial Officer Brittany Bagley said on a Nov. 18 investor call. Adjusted EBITDA increased 22% to a record $109 million, including $32 million in tariffs, of which Sonos will receive a refund of about $30 million, which will largely mitigate the ongoing impact of tariffs in fiscal year 2021, she said. The company plans to have its production shift to Malaysia completed by summer as part of a plan to diversify manufacturing venues, Bagley said. Sonos system products revenue increased 17%, driven by strength in the installer channel, but the Amp and Arc products are supply constrained. The company is investing in expedited airfreight shipments to better meet demand but will continue to be low on stock on key products in the current quarter, Bagley said. It expects to be fully stocked across all products by the end of fiscal Q2. Sonos doesn’t provide quarterly guidance, but it expects the holiday quarter to contribute “slightly less total revenue” as a percentage of the total fiscal year than last year, Bagley said. She said supply chain constraints are “a broader industry wide challenge” that aren't unique to Sonos. The company is feeling impacts from component and container availability, port congestion, and higher shipping and logistics costs.

C.H. Robinson “identified potential savings for its customers of roughly $980 million related to exclusion refunds” since the first Section 301 tariffs were put in place in 2018, the company said in a recent news release. Some 96% of those are “product-specific which require a more complex, time-consuming analysis for qualification,” it said. “The U.S.-China trade war has added another layer of complexity to what has been a challenging global transportation market over the past year,” said Mike Short, president of global forwarding at C.H. Robinson. “As we have consulted with businesses of all sizes, it’s clear that the biggest barriers to duty recovery for these companies are a lack of time, data, and expertise to navigate the complex and lengthy application process.” The last of the exclusions expire Dec. 31.

Twenty-three trade groups, led by the Distilled Spirits Council of the United States and Farmers for Free Trade, are asking U.S. Trade Representative Robert Lighthizer to work harder to resolve the Airbus-Boeing dispute, and thus remove European Union retaliatory tariffs on distilled spirits, cheeses, potatoes, nuts, fruits, juices, chocolate, ketchup and agricultural equipment. These retaliatory tariffs are the second round on ag exports, as the EU put 25% tariffs on whiskey, orange juice, rice and sweet corn in 2018 over steel and aluminum tariffs imposed by the U.S. Some will rise to 50% next June, the groups said in a Nov. 18 letter.

The Cheese Importers Association of America, in a Nov. 16 update on its political activities, told members it is working on a joint letter with the European Dairy Association that will go to the Biden Transition Team and the European Commission on the Airbus-Boeing dispute, calling for an end to tariffs on both sides. The CIAA also said it was asked to join the Coalition Against the Restaurant Tariffs, a group of suppliers and restaurants, to lobby Congress about these tariffs.

Farmers for Free Trade, a trade group that opposed the China trade war and the retaliatory tariffs on agriculture it caused, asked President-elect Joe Biden to make trade policy “an immediate priority” after taking office. “At a time when tariffs have cut off markets and farm income is heavily dependent on government payments, we need to forge a new path that builds back long-term, sustainable trade opportunities for farmers. That means trade not aid. It means rebuilding infrastructure to support the ag supply chain, rejoining multi-lateral trade compacts, intensifying and augmenting ongoing bilateral negotiations, supporting biofuels production and eliminating unnecessary foreign barriers that restrict American ag exports like meat and poultry,” Angela Hofmann, co-executive director of the group, said.

Americans for Free Trade, a trade group opposed to Section 301 tariffs, wrote to U.S. Trade Representative Robert Lighthizer asking that the Office of the U.S. Trade Representative extend Section 301 tariff exclusions scheduled to expire Dec. 31. “As American businesses continue to recover from the COVID-19 pandemic, they should not have to face the uncertainty of tax increases on January 1 because of a reimposition of tariffs on previously excluded products. It remains unclear whether USTR intends to offer additional product exclusion extension opportunities for the remaining exclusions. We believe it is crucial for USTR to do so,” the letter said. The group also asked USTR to extend all product exclusions that are currently in force for at least six months.

Steel industry associations in the Americas, Europe, Asia and Africa say there should be more ambition in the Global Forum on Steel Excess Capacity, and they call on governments in the forum to develop stronger disciplines on industrial subsidies and uphold effective trade remedies. They point with concern to “the recent increase in steel overcapacity at a time when steel demand is severely depressed by the COVID-19 pandemic.”

IRobot anticipates “going back to a world” of 25% Section 301 tariffs on Chinese-sourced goods once its List 3 tariff exclusion expires Dec. 31, CEO Colin Angle said on a Q3 call Oct. 21. The pandemic delayed iRobot’s “original plans” to shift most U.S.-bound production to Malaysia by the end of 2020 to reduce or eliminate its Chinese tariff exposure (see 2002070006), instead pushing the Malaysia transition “well into 2021,” he said.