If 2020 has taught the global supply chain community anything: it’s expect the unexpected. However, an important part of being prepared for the “unexpected” means being prepared, educated, and well-equipped for whatever the future holds. Looking at trend reports and 2021 predictions can be an important part of that for importers.
The logistics industry has faced a wide variety of hurdles over the year — in the advent of the pandemic, but also with new customs and border regulatory framework to follow (and…trade wars, of course). As we gear up to take a closer look at what 2021 holds for the industry, we’ll be looking at three key indicators.
To get an idea of what importing may look like in the coming year, keep reading…
1- Nearshoring: The US-China trade war has incentivized many companies to look closer to home to produce and import goods from. Some experts in the industry are going as far to say that “Mexico will become the new China.” In fact, the US Census Bureau reported that Mexico is the second largest trade partner to the US, after China, accounting for 14.2% of total trade.
In addition to changing trade relationships with China, the new NAFTA (USMCA) has been signed into effect in 2020, which facilitates easier trade between the US and Mexico. You can read more about USMCA below:
Free Trade Agreement Management Tips
Benefits and Pitfalls of USMCA: A Closer Look
6 Main Differences Between USMCA and NAFTA
USMCA: New Trade Center For Private Sector Support
USMCA/CUSMA: How Will Importers Be Affected?
2- Going digital: It’s only a matter of time before every industry either adapts to technology or gives way to it. Trade is no different. In fact, COVID-mandated working from home has also contributed to this — changing the way importers do business.
The CBP-owned-and-operated ACE platform is also an example of this. It is a software that makes submitting, accessing, and auditing trade reports easier for involved parties and facilitates global trade. This year has certainly accelerated the adoption of this platform.
To learn more about this platform, you can access a one-pager resource here: ACE Basics | US Customs and Border Protection.
3- Biden presidency: It is likely that 2021 will bring more stability and easier trade relationships with the Biden presidency. Politics undoubtedly played a huge role in global trade in the last four years — even tainting relationships with our nearest neighbors, like Canada.
Thankfully, USMCA was signed into effect last year, which will aid in Biden’s mission to smooth trade relationships on a global scale, while strengthening partnerships with Canada and Mexico.
The Council on Foreign trade released an article: What Will Biden Do on Trade?, in which they take a deeper look on Biden’s possible impact, stating the following:
“Biden promises to unite with U.S. allies, such as the EU, in a common front against China. But with Biden making no promises on ending existing tariffs on EU products, that could be a challenge. A recent EU-China investment treaty could also undermine Washington’s coordination with Brussels.”
If you have any questions on how to navigate importing to the US in the coming year, it may be ideal to contact a customs consultant, that can help you make sense of regulatory frameworks — ultimately improving your bottom line.
You can get in touch by clicking here.