Hi, this is Anita from the Global Trade Gal
Today I want to talk about trade, specifically about trade and import and export restrictions
and why we have them in the first place. I mean, after all, shouldn't the world be full of free trade
Well, the truth is there really is no free trade. And there's many reasons why there are different types of trade restrictions
I want to talk about this because I feel like this is sort of a bit of a timely topic
As I've seen it in my last 20 or 30 years where I've been working in global trade
when I first started out, there weren't that many really that restrictions or issues
It was actually relatively easy. It seemed like being able to especially import things into the United States
But over, I would say the last 10 years or 15 years, you know, it started becoming harder and harder
There's different types of restrictions that have been placed on, especially on countries like China
When China first opened up, you know, everything was pretty much free and easy there
It was very easy to export out of. Today, it's a much harder or much difficult thing, especially to a country like the United States
Yes, China does continue to export a lot to the United States deal
but there are many regulations and other things which are placed upon products from China into countries as the United States
States. So here are some reasons why countries will say we're going to have trade restrictions
You know, whether or not these are actually, you know, correct or not, they are some of the reasons
Number one is probably protectionism. They believe that by doing so, they can protect the home
economy. You've seen this a lot specifically in Asia. I remember years ago when I lived in Thailand
very expensive to import anything from the United States into Thailand. In fact, we were importing some furniture
and furniture had like 100 plus percent tax on it. Why? Because the ties felt that they were protecting the Thai economy at the time
So this type of protectionism is not just with the United States
but can also be with many types of other countries. That's why when you go overseas, many times
find a foreign car can be very expensive because there's protectionism issues placed upon cars and
automobiles so cars can become extremely expensive, especially an imported car. Another reason could be
that they want to safeguard public health and safety. You know, safety can come first in what we
you know, we eat, what we wear, and use daily. So governments can enforce standards to say that
product needs to be of a certain standard. You know, this can especially, to be true for things like toys
when it comes to things that children might use or children could put into their mouth
when it comes to things as food things that we may eat things that we can wear or things that we go onto our as you know maybe creams or other things all of these things which can be imported you know into a country
a country will usually have some type of restrictions on of exactly, you know, what there's local
standards are and that companies that are working in that need to be able to meet or exceed
the local standard. You know, also there's restrictions on things like vehicles or electronics or, you know
that's why when we ship lamps to the United States, the lamps need to have a UL certification
Why? Because then the lamp has gone through a certain type of safety testing standard
and it's just easier to import and sell it into the United States with that
Another reason could be for preserving the environment. You know, countries may put up restrictions for preserving the environment
This is really starting to happen a lot now, especially as there's new regulations now
with the UN and Europe and other places about sustainability issues, about the environment issues
which many European countries are starting to comply with. And this, you know, it's become a big deal for many parts of Asia that need to start looking
at all of these different things in order to be able to export their products to those countries
So, you know, it could be, you know, things that, you know, environment plays a huge role
There's a lot of concern, especially in many parts of the world about the
environment about climate change, about, you know, all of these things that are happening
where, you know, storms are happening, other things are happening because many people believe it has to do with the environment and climate change. So many countries are starting to have
regulations that start to regulate that more, you know, to combat, you know, pollution, to
combat use of plastics, to all of those different things they're starting to look at more and to
say, what can we do to change this? Another reason why a country may have regulations on would be
they want to support their own strategic interests. They, you know, every time a trade barrier goes up
a lot of times it's not just for, you know, for the fact that it's going to, you know
protect the local economy or anything like that. It's really for strategic interest. When President
Trump was president of the United States, he put many tariffs on goods that were made in
China. In fact, everything that was made in China since that time those terrorists have not come off
I don't know how many jobs is actually brought back to the United States. My guess is not very many
because in all of my years, an experience where I've seen these protectionism measures
it hasn't really, in my opinion, brought that many jobs back to the United States or other places
especially in my own industry. Because, for example, you know, there's just not people in the
United States now who maybe want to make furniture, who want to weave furniture products, who
who want to you know hand paint a vase There the people just are not there that are doing that in a huge way to make an impact on this In fact if you want that type of product you need to find it in Asia So companies instead of moving back to the United States
a lot of them instead move to Vietnam, move to Indonesia, moved to the Philippines, moved to India
So, you know, in a sense, these protectionism issues that a lot of countries put on
it doesn't necessarily mean the jobs are going to come back to their own country. countries, it just means it's probably going to shift to another location
Another reason is that governments want to, you know, encourage fair trade practices
If they feel like there's unfair trade practices, there's problems with, you know, the intellectual
property laws, you know, all of those type of things that a, you know, country may, you know
start to, you know, put, you know, put trade restrictions on one country because of this
You know, an example of this, of course, has been the United States and China and a lot of their trade wars that's been going on recently where the U.S. has felt there's unfair trade practices going on from China or there's the violation of intellectual property rights
So even though your industry may not be involved in that or not be involved in the trade wars, you can basically end up with extra tariffs or other things being placed upon you
and you can essentially remain in the middle of it all. So what are some ways that countries will
that they will do the type of restrictions? And I'll just kind of go through this very quickly
We have a really good blog post that our author James Johnson's written on this
which goes into a lot of detail, which will put a link below in the description. But it's about anti-dumping or countervailing measures
I've watched a lot of anti-dumping in my time, especially years ago
There was anti-dumping with the bedroom furniture industry where several of the large furniture
companies took out an anti-dumping against China. But I don't know of any of them that really have been building furniture today in the United States
First of all, there's just not the workers. And second of all, they're all they're all buying from overseas
So, you know, China's got this anti-dumping placed upon it, which, you know, hasn't really brought back the workers as people have said that it would
But anti-dumping is one way that a lot of, you know, companies and countries may use to do anti-dumping, saying there's unfair trade practices going on here, and that this will mean that there'll be more duties placed upon it
Also, my own experience with the anti-dumping, which happened years ago with the bedroom furniture, was that a lot of the major, major, major factors
the larger factories were able to hire the lawyers in the United States to be able to get a very small duty placed upon the products exported from their their factory
It was the smaller factories that were producing what I would say higher quality goods that were not dumping at all that were that really you know we not selling it necessarily the cheapest price but we selling high quality that end up hurting and they
could no longer sell that type of product because they simply didn't have the lawyers
So, you know, one of the problems with a lot of these trade restrictions is that maybe the big
guys win and the little guys do not. There can be, you know, problems on intellectual property protection could be another reason why
a country can put on they can prohibit or restrict certain types of goods that they can
restrict chemicals they can restrict other things of other goods other goods to come into a certain
country or they could not allow you like in the example of the United States what's happening
now with some of the chip manufacturers that they cannot be allowed to sell certain types of
chips into China either you know the computer chips so you know can kind of
to go both ways. Governments can put regulations on both ways. They can, there could be international
sanctions that are happening. It could be another reason why maybe trade will become an issue
They could be, they can put on quotas or licensing, only allow so many products in
You know, so all of this, of course, can impact international trade in a lot of ways. It can make a lot
more harder, can make it more difficult, can just mean that, you know, it can affect, you know
all the global supply chain. And what I've seen, you know, a lot of these protectionism measures
you know, the big companies a lot of times are able to weather it. They're able to be the ones that
are able to make it through. They've got the teams. They've got the money. They've got, you know
in many cases, they've got the lawyers. They're able to fight it. They're able to get special
deals on things. It's usually the smaller guys. The smaller guys like you and me, you know
many of you that it might be out there listening, that we're the ones that maybe heard a lot from
these different regulations. And that's really what it comes, I mean, you know, comes down to, you know
that even though they're meant to protect a country or protect other things, my, you know, my main
question is whether or not they really actually do. I'm not totally against all regulations
but I haven't seen where many of these regulations have been effective and worked as well as they
could have. I'm going to put a link in our description to this blog post, which is quite interesting
on understanding import and export restrictions. There's a lot more detail, a lot more information on this
If you'd like to read more about it. And we hope that this is important for anyone
who's in the global supply chain to be able to understand because these restrictions can come on at any time
And if they're going to come on, then you're going to have to be prepared for it and decide what you're going to do
or how you're going to be able to survive through it. This is Anita from the Global TradeGal
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