When Jonathan Colehower was a child, he witnessed with alarm the sudden demise of his father’s business, running knitting mills in South Carolina. The death blow was delivered in 2001, when China was admitted to the World Trade Organization and had its most-favored nation status made permanent. “His business came to a standstill. All that went overseas,” says Colehower, who leads the global operations and supply chain management practice at UST, a technology provider. “And I wondered if he was just complaining about a single instance of competition, or whether it was a big sea change. Turns out, it was a big sea change. I get the same feeling now. The pendulum is swinging.”

The pendulum of international trade is, arguably, swinging faster than in the past. There’s no question, in any case, that it’s a more cumbersome pendulum wielding many blades in the form of legislation and tariffs. Worse, those blades keep changing. For any business sourcing and shipping from abroad, there’s the real risk of getting bled to death by failing to keep up with it all.

“Can you remember the last time you saw economic sanctions on the front page of the Wall Street Journal? Now it’s every week!” says Robert Um, national compliance manager at OEC Group, a freight forwarder. “It’s because, even though their efficacy can be debated practically, there’s no denying the political impact. This is going to continue for the foreseeable future, and might even accelerate.” In 2018, former president Donald Trump introduced a dramatic range of tariffs aimed at imports from China; current president Joe Biden has not rescinded them. A re-elected Trump would almost certainly turn up the trade-war heat further. 

“The whole stated purpose (of increased tariffs) was to fix China, but the actions in China have not changed,” says Um. “The only thing that’s really changed is the shippers’ habits. They’re now shifting away from China.” In 2023, Mexico supplanted China as the number-one exporter to the U.S., with a 15% share of U.S. imports.

It’s tempting to think that, if this is all about politics, the situation is temporary. But there’s a parade of other, powerful “temporary” influences on trade policy, currently set to stretch over the horizon. Many businesses are making widespread changes to the countries where they source goods and materials, and even the trade routes they rely upon. That would bring them up against new rules and requirements at the best of times, but they are also encountering legislative changes that reflect an overall push for greater accountability and visibility related to a range of issues, including forced labor, climate change and waste. And then there’s the disruptions in the Black Sea, and the Suez and Panama Canals. Add in the burgeoning U.S. and EU trade wars with China, and the timing could hardly be worse.

Certainly, supply chain managers are worried. In the Lehigh Business Supply Chain Risk Management Index Report for Q3 2024, government intervention had surged to the number two concern for supply chain managers, after cybersecurity. The Index, which was developed by the Center for Supply Chain Research at Lehigh University and the Council of Supply Chain Management Professionals, noted  the perception of this risk was now the highest it has been in four years, reflecting managers' worries about tariffs, trade wars, and regulatory restrictions on source materials, methodologies or technologies. “This risk is always increasing. Russia is especially worrisome,” the authors said, adding somewhat alarmingly, “The geopolitics in Europe are similar to 1939.”

All this makes for added stress in navigating the post-COVID regulatory landscape.

“Compliance has always been challenging, but in this economy and geopolitical environment, it becomes even more challenging,” says Eric Young, senior managing director at Guidepost Solutions, a provider of compliance and security technology and consulting.

“The move towards nationalism is cooking up a perfect storm,” says Colehower. “The House of Representatives has appointed an under-secretary for supply chain management, which is why I think it’s going to get worse, because the government is stepping in and is going to try to regulate private industry.”

A good example, Colehower says, is the U.S. – Mexico – Canada Agreement (USMCA). “It is harder and harder to comply with, especially for the automotive guys. They’re throwing their hands up and saying, ‘I’m not even going to try to comply. I’ll just take the penalty.’”

Technology, of course, offers help, but it is not a panacea. Colehower said UST is exploring  blockchain solutions that can provide an irrefutable record of custody for garments, for example, in order to comply with due diligence and reporting laws designed to ferret out forced labor deep in the clothing supply chain. “But it’s causing the prices to increase and that’s never a good thing,” Colehower says. Fast fashion is not going away, and consumers are used to low prices, leaving a burden to be borne by manufacturers and retailers. “We’re a consumer-based nation. I don’t see that conspicuous consumption going away.”

Overall, the message is to regard this endlessly complex thicket of regulations and tariffs as the new normal. “We’re going to have to put up with this for a while. It’s too bad because we’ve spent the last 25 years trying to lean out our supply chains and we got pretty good at it,” says Colehower. “Now everyone wants to bring manufacturing back here and it’s not a great response, but I think it’s going to be here for a while.”