While the market turns out to be constantly evolving news of President Donald Trump’s pricing hikes, Flexport CEO Ryan Petersen, explained how his customers are dealing with a global volatile commercial environment in an interview on Monday with CNBC Jim Cramer.
“It is very difficult to plan a supply chain when it changes from day to day, so I think it is really difficult for these companies to understand, you know, what the government is going to do, and how should they Set up, “he says. “Possible that it leads to higher prices for consumer goods, but there are all kinds of variables that can reduce taxes or do, create a simpler regulatory framework that could increase demand.”
Flexport offers services that help companies manage global logistics of the supply chain. According to Petersen, the company’s customers have tried to import more and more goods, because they expected to climb rights, in particular with China. During the weekend, Trump announced pricing hikes for some of the main business partners in the United States, China, Canada and Mexico. Petersen said the calendar of these changes was “unprecedented” because even during Trump’s first administration, there was at least a month notice before entering into force. So he said he was not surprised when the president ended up taking a break in Mexico for a month on Monday. Later in the evening, Trump also announced that he would do the same for Canada.
Petersen called for the return of the Trump administration of the commercial exemption of “mini” a “big change”. This stipulation, often considered as a commercial escape, has enabled exporters to send direct goods to consumers and less than $ 800 as a franchise of rights, and they were often used by companies like TEMU and Shein. Aside from the Chinese electronic commerce giants, Petersen said that 30 of the hundreds of the best shopify brands had also imported this way.
All of these Trump changes can change the commercial landscape in another way, added Petersen. He said that the price of air freight can decrease considerably if Shein and Temu are no longer shipped to their current volume. Peterson also said that the Houthi rebels have begin “Rack back a little” on their serious disturbances of trade in the Red Sea, perhaps because of the fear of the action of the Trump administration. He said there were “rumors and speeches” that the container ships could start over the Red Sea, which would lower the price of ocean freight.
“It is difficult to operate in a very simple black and white world when world trade is this complex,” said Petersen.
