Blythe Brumleve:
0:42
Welcome into another episode of everything is logistics, a podcast for the thinkers in freight. I am your host, Blythe Milligan, and we are proudly presented by SPI logistics. And in this episode, I want to talk about how you can use AI to sort through tariff drama. Now these two topics, tariffs and AI, it feels like the news cycle for these two industries, or tools or policies, whatever you want to call it feels like this news cycle changes on the hour every hour. It's really challenging from a personal perspective, in order to keep up with it all. But for this episode, I wanted to talk about the real world examples of how I use these different AI tools in order to help prep for a talk on tariffs in about a week's time. Now, I have worked in logistics in some capacity over the last 15 years, but even this topic of tariffs and global supply chain, geopolitical tensions, the historical context is around all of them. It is a very intimidating subject to learn about or try to dive into. And with the news cycle changing so much on it, I said to myself, I gotta get a hold of this thing. I gotta get my arms around it, and what is the best way to do that. And so in this episode, I'm going to be breaking down the process that I used to prepare for that talk on tariffs and how it's affecting the global supply chain, which I gave that talk earlier today. So while everything is still fresh in my mind, I want to be able to break down the process in which I helped disseminate some of the information sources, and even more sources that I even had, in order to get a full picture on what's going on and why this should interest you is because, if you work in freight, you work in logistics, it's your job to understand these things too, and even to a higher extent, being able to take this insight and take this knowledge and be able to share it with your customers and with your leads, and really with your colleagues as well. So then that way, you can prove that you are a subject matter expert on this particular topic. I'm going to borrow a comparison, or, I guess, an insight tip. Friend of the show, Grace Sharkey, she was on LinkedIn recently, and was talking about, you know, the impacts of, you know, AI, I don't want to say bots, but you know, companies that have implemented different calling systems, calling structures, especially around like AI, bots that can handle, like sales calls for you, customer support, tracking, load, updates, things like that. Those bots are increasingly handling that part of your job. Theoretically, it should open your role up more so that you can focus on the things that are going to be more impactful, that are going to be more especially impactful for your customers. So the example that she used was, if I'm a freight broker and I'm moving lumber, I want to know how tariffs and how global trade policy is going to impact the commodity that I care about the most, and if my brokerage partner, if my freight broker, if my freight forwarder, is not keeping up with the commodity that I as a customer care about the most, then why do I even have you as a partner? I want to go find somebody else. That is, you have access to all of the same AI driven tools, but you're not using that time to keep my business focus in your you know, at the front burner instead of in the back burner. So positioning yourself as a freight broker, or as a freight forwarder, or just, you know, an executive that's working in logistics, showing that you can keep on top of the latest news so that your customers aren't asking for this information, you can be more proactive about that process. And so that's what this show is going to cover, is the process behind information collection, information dissection, and then reporting that information to your audience, to position yourself as a subject matter expert in that particular realm, so you can win more business and keep the business that you have, especially in a challenging or tight market, which is what we find ourselves, what we have found ourselves in over The last year and a half or so, and probably going to be in for the foreseeable future. Another thread that I kind of want to pull on for this discussion is recently the CEO Toby. I'm blanking on his last name, but the CEO of Shopify, Toby had recently put out a company announcement and then made it public that his company is AI first all of the employees within the company. You are not allowed to hire someone new or ask for more resources until you prove that you cannot get what you need to get done without AI. And so I think that that is a really pivotal shift for me. Your company to take and publicly take it. And so Shopify is not going to be the first or not going to be the last company to make an announcement like this. They might be the first one to publicly announce it, but they're not going to be the last one to have this initiative in place, because lots of things are getting disrupted, especially in the age of AI, and especially in the world of global trade and tariffs. And so I thought that was a good example to to start thinking about what your processes look like, defining them. Many organizations don't even define what their processes look like, but also being prepared to rip those processes out and start fresh with some of these more, you know, coming to the, I guess, the center stage of some of these AI tools, such as grok notebook, LLM or not, LLM, notebook, LM. And then, of course, you have your chatgpt and anthropic and all of the rest. So we have a perfect use case to start with this. And I want to talk about the process. So the system you first things first is you have to think about the system in which you collect information. And I'm talking about when you're scrolling LinkedIn, when you're scrolling Twitter, slash x, when you get an email, all of these different data sources of where you're scrolling. You need to have a central place where you can store different nuggets of information, and how you store that information matters a lot. You don't want to have 17 different places where you have bookmarks, because if you have that information all spread out, then you're not going to be able to compile it into a centralized place so you can actually learn from it and take action on that data or on that insight. And so the first step in your process, you have to develop one thing that's going to work for you. Now this is a process that I have changed and ripped out and started fresh and started new several different times over, but my main strategy of what I use is I'm scrolling on X slash Twitter a lot. I am a paying member, so I have access to Bookmarks. I don't know if bookmarks is a paid feature or not, but that is the that's the system where I get the overwhelming majority of my news is on x. And so I have a system inside of my bookmarks where I have different topics that I regularly cover, marketing. Ai source to porch all of these different story ideas. I have folders for each of them, and anytime I find something interesting, I save it to that particular bookmarked folder. Now another method that I use is in my email, because the majority of the things that I or I guess I should say the way that I scroll the internet, the easiest way for me to store those ideas outside of Twitter slash x is that I email it to myself, so I have emails that I will email to myself, and I'll just continuously reply to that same email, especially if it's a centralized theme, tariffs is a perfect example. I was giving a talk on tariffs. Originally the talk was supposed to be supply chain trends for 2025 and that quickly changed to tariffs and how it impacts supply chains. And so, as somebody who I've worked in this industry for, you know, like I said, 15 plus years and so, but that's still a level of education that I am not 1,000% sure on my educational level, or knowledge expertise, inside, whatever you want to call it, there's always something to learn. And so with that particular, I guess, sector of logistics, I found myself really weak on knowledge base wise. And so being able to have a system where I email myself specifically, this is what we're going to be talking about, supply chain. It was a tariffs and global supply chain trends. So that was an email that I emailed to myself the show breakdown. I was lucky enough to get, you know, a couple of overview questions of what we were going to cover in the talk. And so I had that as sort of the basis of the first email that I sent to myself. Then over the course of the last, say, 10 days or so, with all of this tear of drama coming out, it was an email that I just consistently if I found something on Reddit, if I found something on LinkedIn, if it was an email, I click on the View and browser and I save all of those URLs. I save them all either to Twitter slash x, or I email them to myself so that that way, I'm developing my own sort of data repository where I can go back to for and that will be important for the next step. And so having all of that information saved up it it really was key to take the next step, and that is making collecting all of the information is one aspect, but then putting all of that information into a centralized place to to compile a research report is that next step, and then that's where a lot of these different AI tools come into place. So I guess maybe it would be helpful to share my screen in this regard. So let me go ahead. And share my screen for those who are listening out, describe it what you see on the screen. So let me bring up this first analysis that I found, which it comes from, semi analysis the website and brand they I've only recently discovered them, but they put out some really, really good in depth insight. I mean, just look at the table of contents here on the left hand side of the screen. I mean dozens of topics that you can quickly jump around to. I mean, it's talking like key exclusions in Trump's executive order, board level and rack assembly for Nvidia and its partners, the ups, system switch gear, diesel generators, transformers, air cooled chillers, all of these different things that are talking about the ultimate art or not the ultimate, but the title of the article, and that's tariff Armageddon, GPU loopholes, Mexico, supply chain. Shift all of these different reports into this research report by semi analysis. It's so this is such a great resource, especially when they do global insights for specifically around trade. You can see how long this article is, and so this is free or on their site. I'll link it in the show notes, but it's semianalysis.com and it talks about tariff Armageddon, but that's one of the sources that I use like so, for example, this is a lot of information already, and so what I've done is I've saved that URL and compiled it into a list, into either my bookmarks on X or I emailed it to myself. In this case, I emailed this article to myself so that way I can read through it when I get a chance. Or taking the next step, let me show you another Information Resource really quick before we talk about the next step, and that's data that comes from vision. Now, for people who don't know who vision is, it's V, I, Z, I O N, they create a lot of really great analysis. They're a visibility software platform, but they create a lot of really, really good analysis too. And so if you're looking on a screen right now, they have a lot of resources that you can check out on their website. I will link to that again, but you know, just different graphs talking about how a lot of shippers, or a lot of customers, in the first quarter of this year, they front loaded a lot of their shipments, meaning that they ordered them well in advance, ahead of the tariff announcements that took place on April 2. And so what they did is they ordered a heck of a lot of goods, a lot more than what they used to. I think some of visions data said it was a 70% increase year over year for the amount of bookings in the month of January. And January already sees an increased amount of bookings, especially for Southeast Asia countries, because, um, China has their Chinese New Year, and that happens typically around the end of January, and so there's lot of front loading, of ordering that goes on during that time frame anyways, but in anticipation of Trump's tariffs and the the tariff policy and just sort of the we don't know what the hell is going to happen mindset, that is where, you know, tools like vision can really come into play, and they can show you what kind of moves are being made, and they're sharing that data on their site as well. So this is another one of the sites that I bookmarked and saved. And so after you have that system of saving all of your informational resources, then it comes time to the next step, and so I've been leading to it for a minute now. So let me share with you inside of grok, which is located on X's platform, slash Twitter. I get tired of saying slash Twitter every five seconds, so I'm just going to say x from here on, out muscle memory. I have to start developing that muscle memory to say x instead of Twitter. I think I've held out a little too long on keep, you know, just the the phrase of like, keep calling it Twitter. Twitter is such a better name than x, anyways. But that's another story. Okay, so you can see on the screen right now that this is, I'm inside of grok, and these were the topic questions. So sort of the overview of the discussion that was that I participated in today, and I wanted to make sure that I used all of my resources and all of my research that I had been gathering in order to center that data and that research around these key questions and these key insights. And so using grok, I was able to prompt it to say, help me prepare for this podcast interview while covering the supply chain trends that are currently being impacted better or worse by the latest tariff drama, along with reasons why all of the world's manufacturing is located, mostly in China, who stands to benefit from that manufacturing dominance leading the country. And then I said, Please also include insight in quotes learned from these tweets and its media. And so these were all of the bookmarked tweets that I had. And these are not just bookmark tweets, but also YouTube videos, which has been hugely helpful in preparing for this discussion and just preparing for my overall sort of mindset. So there is about 30 links here that I. Had saved that I wanted Grox deep research tool, which now they have a deeper research tool. Instead of just deep research, it's deeper research, and I instructed it to look at all of these different links and then compile different stats and quotes interesting takeaways centered around those four general overview questions of the talk that I was going to be participating in. And look what it went through. It went through 119 different sources during during the deeper research, not only the sources that I added, but also additional sources, about 90 additional sources that it added, and it created this entire research report. I'm talking hundreds, probably 1000s of words here, that can give me an overall view, but then also a breakdown, which is, I think, really helpful, especially for someone in the role that I am, where I'm talking on a screen just like this, but I have notes off to the side that I like to reference. And so being able to compile, I mean, I can't, exactly like, look at paragraphs and paragraphs of text and make it an engaging show, or make it an interesting that would be super boring and just not really, you know, not exciting to listen to. I don't know that I would want to see that. I want people to cut to the chase in their podcast interviews and or podcast conversations. And so this was a way to help make a cheat sheet for myself, to have those topic overviews of what we were going to be talking about in the conversation, and then all of the research that was given. Now I took that same prompt and I added it into chat GPT. Chat GPT also has a deep research tool, but I happen to find that in my specific sort of anecdotal experience, that grok is much better at doing the deep research reports, but chatgpt is much better at putting it into a much more reader friendly document. And so you can kind of see the difference in so same prompt, if you're watching on the screen right now, so same exact prompt, all of the same links, chat. GBT did go through and like, ask me a couple follow up questions, just, I don't know why, Groff didn't ask me that, but went back through and I answered those for to use key takeaways and quotes from the tweets and YouTube videos to help answer the podcast interview questions and topics. I also asked for a detailed briefing to help me explain the nuance, the history, how supply chains function before and where they're moving to now and the new global trade agenda. And I wanted both global impact and US versus China outcomes. And so it took about 10 minutes to put together this deep research report, and so it made this entire report. Now the only thing I kind of could gripe about is that it used some of the links that I sent it, but it didn't use all of them. It used, let's see, 123, it used about four, four of the links that I sent it, and that's a little frustrating on my end, because if I'm going through the process of reading through all of the news on a daily basis and saving the things that I think that are the most important that that's what I want you to sort through. First, from an AI tool perspective, chatgpt didn't necessarily do that. They have a lot of sources from Reuters? Reuters, yeah, it's, I think it's, that's how you pronounce it, as Reuters and a lot of other sites, like, what is this? Crypto pollen, Doc, some of these links I just, I, I wouldn't pick them as a source. So how chat GPT pick those as a source? I don't know, but it put together this entire research report, and so you can kind of see, if you're watching on the screen, this is 1000s of words, and based on and I was I at first i the the first response that I gave was based on all this research. Create a set of five to seven bullet points with stats and quotes for each of these questions. So I kind of had to prompt it again in a different way. Like, okay, look, you went through all of the work of getting all of and compiling all of that information, but it still didn't help me get to my goal of making it digestible, making it into a digestible format. So I asked it again. Had to prompt it again, and it gave me a table. I don't really want a table. I just want bullet points. I just want something simple. So that's a simple. So that's a little bit of an aggravation from chat GPT, which is why I now prefer the process of let's just collect all of our sources loaded into grok. Grok will actually go through each of the links that I give it and come up with the research report, but then taking that research report and loading it into a chat GPT, because it allows me the position to have all of this research, have some of the suggested questions and answers that I was already thinking through, but then be able to prompt a chat GPT and say, What am I missing? Poke holes in my arguments and. And that has been the bigger unlock is being able to load in the work that you've already done and asking it to poke holes in it, asking it, you know, what am I missing? Things like that. So then that way, it can give you a much better response. And so if you're looking at the screen, you can kind of see that now it's starting to give me a little bit more of a better response, where I can have the context around the question, and then have the information that's going to be the most helpful to the audience, especially because we're working in limited time frames. I think the conversation that we recorded was around 40 minutes, and you frankly, it could take hours, sometimes days, to explain complex geopolitical issues, tariff conversations, trying to compile all of that into a nuanced discussion is incredibly challenging, and so this was really helpful to help me sort through all of the ideas that I thought were interesting, and then to poke holes in those ideas so I can get a bigger picture of, you know, what is going on in the world, and then thus help other people have a bigger picture of what's going on in the world as well. And so if you thought we were done, we are not done. So I did, if you're looking at the screen, I did ask it, you know, a few other questions outside of the research that I had told it to check. I said, what are some of the more interesting stats? It did give me a stat on us, or us. Tariffs on China hit 104% in April 2025 by the time it was giving me that number, the tariff news the US had already increased it to 145% and so that's where I think that grok is much more accurate in the latest news realm, because who knows where they are pulling that information because, or chat GPT is pulling that information because, inside of rock, it had the 145% which is correct. It had that correct amount of us tariffs on China at the correct amount, while chat GPT did not so out of all of this information, I copied and pasted what I thought was the most interesting part. And my favorite thing about these llms is that they just have this fancy, you know, copy and paste tool, so you can literally just hit that little copy button. And then I brought it over to a Google Doc, and I pasted the top takeaways from grok, the top takeaways from chat GPT, pasted it all in one doc so I could have this cheat sheet. Now, I have much more information on here, and it's still, it's literally 13 pages of notes inside of my Google Docs, but I wanted to have the one pager that is key for doing, you know, interviews and talks and things like that, is just having a one pager that you can quickly glance at and then come right back to the screen and right back and looking making eye contact camera wise. So have my little cheats cheat sheet. But I took it one step further, and I think this is going to be the more interesting unlock for a lot of you is that if you take Wait, I didn't even change my screen. So sorry i Here is the Google Doc. In case you're watching on screen, or if you're just listening, you didn't notice anything. It was the same information. But if you're looking on the screen, there's my one pager doc of all of those pages of information condensed into one block. Now obviously it's not going to be fully in depth. It's not meant to be it's meant to be that I can find a keyword and then be able to riff on that particular topic, because I've already done the legwork of the research, of listening to podcast interviews and YouTube videos and digesting it that way over the course of the last week, but then just using it as a compilation, as a data collection method in order to turn the all of that information, stats, quotes, things like that, into a one pager that is really, really easy to look at. Now, next step is to go over to notebook LM, which is from Google, and they have a plus option. So if you're looking at the screen, they have a plus option, but they also have a free version. I've been using the free version. I might upgrade to the plus version, but basically, you are able to take a massive amount of contextual data. So all of that text that you just saw me scrolling through on screen, 1000s of words, you can take that information and use it as a data source inside of notebook LM. And what it will do then is it will create a podcast overview of everything that you compiled into that data source. So if you're looking on the screen right now, let me share this notebook LM tab of what I've already created and what I actually used for to prep for this interview. And so you can see on the left hand side, they have what you can add as a source. You can add up to 50 sources of information. I just chose to paste a bunch of information into the doc. I might try, you know, links in the future, but. You can also add that as well. You can kind of see on the screen right now where you can add google drive links, just a regular link, YouTube links, and then you can also paste in text. That's what I did, is I pasted in text from all of the research from grok and from chatgpt. Pasted those sources in so you can see them on the left hand side over here, and then on the right hand side, it will typically say, you know, generate an audio overview, the audio overview. And I might have to do a separate episode on this, because it is so if you haven't played around with this, it is incredible, because it takes this massive amount of information and it turns it into a podcast hosted by a male and a female, and they have a damn near perfect podcast cadence. I want to play for you the first, I don't want to say like 30 seconds to a minute of this podcast, because it sounds like a normal podcast, but it's used. It's a podcast made out of all of the insight that I gathered up over the course of the week, research documents, things like that, it makes the podcast. So it made a 24 minute podcast based on all of that information that I loaded into the system. And take a listen into the first 30 seconds, because it sounds so normal,
Unknown:
26:56
that feeling when your news feed is just, you know, wall to wall, updates about global trade tariffs flying left and right, you can honestly feel like you're drowning in information sometimes. Yeah, it's overwhelming. Well, think of this as your lifeline. This deep dive. It's designed to give you a clear, concise handle on the really crucial shifts happening in global commerce right now exactly. We've basically waded through a mountain of stuff for you, the latest news, obviously, but also expert takes on social media and some really deep industry reports. The goal here is just to cut through all that noise and bring you the key things you need to know to understand what's really going on. And today, we're zoning in on something pretty significant, that major escalation in the US China trade conflict back in April 2025 right? And the huge impact it had on global supply chains, yeah. Now,
Blythe Brumleve:
29:22
if you heard all of that, that is, it sounds like a normal podcast. This was completely generated by AI using the information that I've already gathered. And so if you're if you want to hear that full discussion, because it is a great discussion, I happen to prefer listening to podcasts because it's so unintrusive to what I'm already doing during the day. And so I can cook dinner, I can fold laundry, I can clean the bathroom, I can do all of these things and still listen to a podcast. And so think about it from that lens, like even YouTube. I love YouTube. Watch it every single day, but you have most YouTube videos, you have to be watching the screen, so you can't really do other things while you're watching YouTube. This changes that. Podcast changes that, and it has changed that for a, you know, more than a decade. I think 20 years, gosh, however long podcasting has been around. But I think 20 years, yeah, there's neither here nor there, but this is a totally new way to interact with information, collect information, compile it together, and then listen to a podcast recording that is done on demand, and it made that episode in less than five minutes based on all of that data. And then I'm able to go through I get ready. I can do my makeup in the morning. I can get ready for, you know, YouTube, Internet things, and being on camera while I'm listening to the research that I've already compiled. So this is a major, major unlock, and if you want to hear the rest of that podcast conversation, we're actually i You're able to download the file and either share it with your team, but I'm going to share it with all of y'all on this particular episode, so then, that way, you can hear about all of the research that I did, and then listen to this fee, this feedback of this podcast episode, and maybe you can use this in your own research efforts and your own team building efforts, because it really is so incredible. So that was my, I guess, my final result of all of the news that I compiled the way I was able to prep for that conversation. And I think that this, this centers around, you know, what I hinted on earlier in this episode is that in this world where AI is slowly taking over specific job roles and job duties, it's not the person that's going to be replaced by AI, it's the person using AI that is going to replace other jobs and other workers. And so if you're not using these tools, you need to start baking it into your work day. Just keep a tab open on your computer screen, keep chat GPT open on your computer screen, start asking you questions that you would typically. Ask Google, you would be surprised at how good the answers are now there. I do believe that there are different use cases per AI platform, but overall, I thought that you guys would find this interesting, because you're able to use these tools, especially around a topic like tariffs, to gain a greater understanding, a greater education on that topic. So then that way you can go back to your customers and go back to your leads and tell them how much you care about their freight, how much you care about their business, and that you're thinking about it as well. That is the goal of using AI tools. So then that way you can get rid of less of the grunt work this would have taken me, I don't even want to weeks to, you know, be able to compile and find good pull quotes and put it into an interesting format, and then be able to to shift on a dime on what we're talking about conversation wise. Now I can do that that much faster, because I'm able to have a system in place where I can save that information and then not only compile that information into a research report, but take action on that research and be able to share it and set myself up and my company up as a subject matter expert in This arena. So it the world is shifting fast. AI and tariffs. There's a lot of drama around each of those. Neither of these two things are going away. So how can you use these modern day tools to gain a competitive advantage? I think that this is a pretty good process to follow and experiment with. I'd be curious to hear if any of you have experimented with a similar route in data collection and research and how it is helping you in your day to day. Would love to hear some of your use cases. So if you have any of those, please let me know. But that about does it for this episode? I thought that this would, well, it not quite, not quite, because we are going to add in that downloaded audio files. So if you want to hear about the new tariff, World Order, supply chain upheaval, which is the podcast episode created by no Google's notebook LM, based on, you know, the research data that I fed it, we are going to play that immediately after. But if you don't tune in, you know, thanks for listening. I appreciate your attention, and I would highly suggest to tune in, because this could be a fantastic new way of collecting data, compiling it, and then acting on that data. So hope you all enjoy
Unknown:
34:43
that feeling when your news feed is just, you know, wall to wall, updates about global trade tariffs flying left and right, you can honestly feel like you're drowning in information sometimes. Yeah, it's overwhelming. Well, think of this as your lifeline. This deep dive. It's designed to give you a clear, concise handle on the really crucial shift happening in global commerce right now. Exactly. We've basically waded through a mountain of stuff for you, the latest news, obviously, but also expert takes on social media and some really deep industry reports. The goal here is just to cut through all that noise and bring you the key things you need to know to understand what's really going on. And today we're zoning in on something pretty significant, that major escalation in the US China trade conflict back in April 2025 right? And the huge impact it had on global supply chains, yes, massive ripples. So our mission here, really, is to give you the context. Why these new tariffs? Why was so much manufacturing concentrated in China to begin with? And the real time upheaval, you know, how companies are scrambling to react, who's winning, who's losing in all this? Yeah, and how it hits different industries differently, plus what companies are actually doing to become more resilient, and technology's role is playing a surprisingly big part in this whole transformation. Okay, let's dive in. Let's unpack this. So April 2, 2025 the US announces some pretty hefty new import tariffs. Yes, significant changes. We're talking 10% up to what was it? 49% on various goods, and The stated reason, according to the reports, was about bringing manufacturing back home, making America wealthy again, that sort of thing that was the line. And look, these weren't just minor tweaks. This move pushed overall US tariff rates to their highest point in a century, 100 years. That's quite a statement, a real shift in trade policy, absolutely, and China, well, they didn't wait long to react. Did they? No, pretty much immediately, they hit back with their own reciprocal tariffs on US exports, which just set the stage for things to escalate fast. And they did. A few days later, the US doubled down an additional 104% tariff on Chinese goods, right? And the justification given was China's refusal to drop its initial 34% duties. So let's just add that up. There was already a 20% tariff from earlier February, 25 add the new 104% that puts the total tariff on many Chinese goods at a massive 145% and. Enormous cost increase for importers, just huge. And the markets, they definitely noticed. Oh yeah, the S, p5, 100 plunged. What about 10% just two days? Wow. And it wasn't just the US. The whole global stock market kind of went into a tailspin. I saw a quote from investor James lie saying, basically, whatever you think about tariffs, the timing was just terrible, really disruptive? Yeah, that makes sense. And this wasn't just about tariffs on finished goods. Was it? The conflict took another turn. It did. China started using its leverage over critical materials, things essential for high tech manufacturing. We saw reports that were targeting key parts of the US supply chain for these materials Exactly. They had already put restrictions on exporting things like gallium, germanium and antimony to the US, right? Those specialized metals, vital for semiconductors and stuff, vital. And then in April, they added rare earth elements to that export control list. Ah, rare earths. Everyone hears about them, crucial for electronics. EVs, defense systems, absolutely crucial. And China dominates the processing some analysts were calling it China's ultimate metallic weapon, a pretty stark description. It really paints a picture of an economic conflict fought on multiple fronts, doesn't it? It does now the US tariff policy itself seemed to be well, evolving in real time, adapting how so well initially they seem to exempt consumer electronics, you know, smartphones, laptops, to avoid sudden price hikes for consumers. Presumably, that seems to have been the thinking, yeah, avoid that immediate sticker shock. But other sectors weren't so lucky, not at all. Textiles, apparel, toys, bam, hit with punitive duties up to 125% in some cases, ouch. I remember seeing a logistics expert call it organized efenomics, right? A colorful way to say, mess around and find out, highlighting those really harsh, maybe unexpected consequences for certain industries, definitely a shock for those businesses. And the tech exemption that wasn't meant to last forever, was it? No. The reporting suggested it was temporary tariffs on semiconductors, other electronics, they were expected within about a month. So a phased approach, maybe, but aiming for pretty broad coverage eventually seems like it. And the numbers really underscore the scale of this shift US customs duties as a percentage of imports. Yeah, they hit levels not seen since the snoot Holly era back in the 1930s Wow, the era often blamed for worsening the Great Depression. So overall, US tariff rates hit 100 year high by April 2025 Exactly. It just hammers home how big a policy change this was, and it wasn't just China feeling the heat right. Allies like Canada and Mexico got hit too. Yeah, new 25% duties on many of their goods, and understandably, they were not happy, lots of complaints, I bet. And China, meanwhile, obviously condemned the US actions strongly and hinted at more retaliation beyond just tariffs, maybe targeting US companies in China. There was talk about Tesla's Shanghai factory. Wasn't there speculation? At least there was, which would be a huge escalation. Obviously shows how tangled everything is. It really does, and it's interesting to bring in Ray Dalio perspective here, yeah, the veteran investor. He warned against seeing this just as a tariff thing, right? He argued it's more a symptom, a symptom of these, like five deeper forces reshaping the world order, and that this trade fight might just be a precursor to, well, potentially more dangerous confrontations down the line. James lie echoed that worry, too. So it's not just about trade deficits. It's deeply tied into national security, great power competition, a much bigger picture, a much bigger picture. Okay, so that's the context of the recent escalation, but to really get why this is causing such upheaval, we need to rewind a bit. Why did so much manufacturing end up in China anyway? That's crucial. Yeah, for what 30 plus years, China offered this really compelling package for manufacturers. The starting point, as I Jelani noted, was definitely the super cheap labor rate, especially back in the 90s, early 2000s absolutely wages were just a tiny fraction of Western levels then. But it wasn't only cheap labor. Was it no far from it. China built this incredibly powerful industrial ecosystem. Think, dense networks of suppliers, skilled workers, logistics, infrastructure, all packed together the cluster effect, like Shenzhen for electronics, you could find literally any component, any service, right there, super efficient, totally and big players like Apple's partner Foxconn, they thrived on that efficiency, sourcing parts practically next door to assembly lines. And then there was the regulatory side, historically, maybe more lenient environmental rules, labor rules, and definitely business friendly policies from local governments trying to attract factories, plus tax incentives. Those tax free export zones were a big draw, and we shouldn't forget the currency was kept intentionally undervalued for a long time, making exports cheaper, right? So you bundle it all together, low wages, huge labor pool, government support, dense supplier net. Works, efficient logistics. It was a winning formula for decades, yeah, but importantly, China also invested heavily in skills, right? Building up workforce. Know how critically important that led to high productivity, high quality in many areas, it wasn't just about cost anymore. I remember that quote from the toy executive Molson Hart, he said Chinese manufacturing labor isn't just cheaper, it's better that really cuts through it, doesn't it? And he gave that great example from his own business, yeah, educational toys needing precise plastic molds. Yeah? He said he could buy the machines in the US, no problem. But finding people with the deep expertise to make and fix those complex molds, that knowledge is largely gone here. It really points to this erosion of industrial capability in some Western countries, the skills, the knowledge base, the whole ecosystem, just faded away in certain sectors. Hart's point was that tariffs alone won't fix that. You can't just magically bring back production if the fundamental know how isn't there anymore. He felt many Americans kind of trivialize manufacturing's complexity. He even mentioned cultural aspects, didn't he observing Chinese workers working longer hours, maybe more happily, being physically faster, attributing it to a manufacturing culture and better technical education. It's a challenging perspective, for sure. Now, things have been shifting at the margins recently, even before these big tariffs right rising wages in China, the earlier trade tensions, COVID disruptions, that all push companies towards the China, plus one strategy, keeping a foot in China, but also setting up shop somewhere else as a backup, exactly but fully disentangling is proving incredibly hard. Global supply chains are just so deeply woven into China. It's not just final assembly, it's the inputs, right? The components, the materials, so many upstream inputs still come from China. Think Taiwan or South Korea, making advanced chips that end up on boards assembled in China or Vietnam, sewing clothes using Chinese fabrics and zippers. This deep integration means trying to rip it all out quickly is hugely disruptive and costly. So when these massive new tariffs landed in april 25 it must have just sent companies scrambling rip it out and reroute, basically total scramble mode. The very first reaction was that rush to front load shipments, right? Get as much stuff into the US before the tariffs hit, which led to that record trade deficit. We mentioned companies front running the tariffs, but then boom Liberation Day, as some Riley called it, the day the tariffs took effect, ocean freight bookings just tanked. Orders canceled, rerouted. And think about the small businesses caught in the middle, getting hit with huge unexpected customs bills on stuff already on the water, yeah, sometimes wiping out their entire profit margin on that shipment. Desperate situations. For some, you could just feel the crisis mode setting in, especially in those heavily reliant industries, toys, apparel, electronics. We heard that story about the toy company, costs per unit soaring, making existing orders totally unprofitable overnight, a nightmare scenario. Many companies just felt blindsided by the speed and the sheer scale of it all. And it wasn't just finished goods importers feeling the pain. Remember Ryan Peterson's point from Flexport? Yeah, about US manufacturers being collateral damage exactly because tariffs were also hitting the components and machinery they import to make things domestically. So even us factories faced rising costs if they relied on global inputs, it really complicates that simple bring manufacturing home narrative, doesn't it? It absolutely does. It's way more complex than just putting up walls. So facing these huge cost hikes, the immediate reaction was this frantic search for alternative production locations, countries not yet hit by the tariffs. But that became tricky, too, didn't it? Peterson also mentioned the tariffs hitting places like Vietnam and Cambodia, right? That was described as an absolute bomb. 46% on Vietnam, 49% on Cambodia. These were key destinations for companies pursuing that China plus one strategy. So it really felt like Whack a Mole. You shift production to avoid one tariff, then that place gets hit too. It's exactly that dynamic. So where were companies actually managing to shift production? Which region started seeing an uptick? Mexico seemed like a big one, definitely a triumph beneficiary. Proximity to the US, the usmca trade deal, that helps a lot. And we even saw reports of Chinese manufacturers setting up shop in Mexico to serve the US market, tariff free. Yeah, estimates were suggesting maybe 20% of new factories in Mexico could be Chinese owned within a couple of years, using it as a back door, especially for things like auto parts interesting and Vietnam, despite the new tariffs hitting them too, still attracting business. Yeah, it was already benefiting from China plus one, especially in electronics and apparel. Electronics became a huge chunk of their exports, like 32% Yeah, definitely a key conduit for China, in some ways, meaning importing Chinese components for assembly, right? But those new US tariffs certainly tempered Vietnam's advantage somewhat. What about India? They seemed key. To grab a bigger slice. They are especially in electronics and textiles. Apple starting manufacturing, there was a big signal. India's Got the scale potential democratic alignment, though. They faced their own hurdles with infrastructure and bureaucracy, and they weren't fully exempt from us terrorists, either, and then other Southeast Asian Nations, Indonesia, Malaysia, Thailand, all picking up some business. Indonesia is making a really aggressive play in the EV battery supply chain, using its nickel resources, attracting big investments. And it wasn't just Asia and the Americas right. Eastern Europe, North Africa. Scene movement too. Poland is emerging as a key hub in Europe, especially for the auto industry and EV batteries, though often using Chinese material still and Morocco, leveraging its phosphate reserves, attracting Chinese battery factories too, becoming one of these important connector economies. So it really feels like the global supply chain map is being actively redrawn, more regional, maybe more complex, definitely more complex. And in the short term, definitely seeing inefficiencies, logistics bottlenecks, overwhelmed ports, in some places, maybe service cuts to smaller US ports, we heard reports of Port managers just dealing with constant confusion, unpredictability, these supply chain tourniquets causing major blockages. And the bottom line is companies are paying more carrying more risk that eventually feeds into inflation, potentially, yeah, and ironically, some manufacturing is just taking a detour through other countries, but still ultimately reliant on China. Okay, so with all this shaking out, who looks like the winners and who looks like the losers in this big manufacturing shift, well, on the potential winners list, Mexico really jumps out proximity usmca. They're soaking up investment in auto, appliances, electronics, though, maybe straining their infrastructure. Vietnam and Southeast Asia generally still benefiting in apparel, electronics, yeah, benefiting, but maybe hitting limits with labor pools and still very dependent on Chinese inputs. Indonesia, as we said, looks key for the EV supply chain, connector rule. South Asia, India, Bangladesh, indie for electronics, chemicals, Pharma. Bangladesh keeps going at apparel, but then you have Cambodia getting hit with that big 49% tariff. So it's not universal. Eastern Europe, Poland, North Africa, Poland's looking good, especially for European companies needing alternatives. Battery manufacturing is a prime example. North Africa, Morocco, Egypt, Tunisia, could grab more textile and light manufacturing for Europe. And what about the US itself? Is it actually winning? Potentially some upticks, steel, aluminum, maybe some factory expansions, appliances, electronics, chips, eventually. But Molson Hart's argument looms large are the workforce skills and supplier base really ready? Gains might be limited without that. Okay? Onto the potential losers. Then China's export sector seems obvious. Yeah, likely volume loss, especially at the lower end of manufacturing, they'll try to offset it move up the value chain, deep in trade elsewhere, but still a hit us, consumers and importers, almost certainly facing higher prices. Tariffs act like a tax, right? Kyla scaling called it regressive tax, hitting lower income folks harder, and those emerging markets caught in the crossfire, like Vietnam, Cambodia, collateral damage, yeah, and just global efficiency overall, fractured supply chains could be a drag on growth, and those connector countries trying to play both sides. That's a tough balancing act. They might increasingly feel forced to choose sides between the US and China. No, these impacts aren't uniform, are they? It really depends on the specific industry. Absolutely crucial point takes heck and electronics, big hardware, smartphones, laptops got that temporary relief initially, but that's changing tariffs expected on chips, phones, PCs, right, which is just accelerating diversification Apple to Vietnam, India, Dell HP, looking at Mexico, Thailand, the trend is definitely towards regional tech supply chains, automotive complex, global chains. There too big pressure to source more parts within North America benefits, Mexico, Canada, under usmca, despite those new general tariffs, you might see more European, Asian car companies building plans in the US and that big push to onshore the EV battery supply chain, huge focus there and retail consumer goods like clothes, shoes, toys, furniture, among the hardest hit really forcing rapid shifts to Bangladesh, Vietnam, Latin America. It's tough for small retailers, especially big box stores. Have more leverage, I guess, more leverage, yeah, renegotiating diversifying sources, maybe just accepting lower margins for a while. What about US manufacturers who need imported machinery or components they're feeling the cost pinch, they'll likely petition for specific exclusions. Maybe we'll see more cooperation among allied countries on supplying industrial inputs, and agriculture always seems to get caught in these trade wars. Big risk for us. Farmers lost markets lower prices due to Chinese retaliation and that background. Worry about food supplies being weaponized if things get worse. Finally, the. Logistics folks, the shippers, the ports, lots of uncertainty for them, shifting volumes, maybe less traffic on the main China, US routes, a real risk of a downturn. If global trade slows significantly, it's a tangled web. So given this chaos, what can companies actually do? How do you build resilience? Now it feels like the million dollar question. It really is, resilience is the name of the game. Now, yeah, top strategy, diversify your sourcing. Don't rely on one country. Have multiple suppliers in different places. Exactly It costs more, sure, but think of it as an insurance policy. Panasonic is a good example. People cite and near shoring or friend shoring, moving production closer or to allied nations. Big trend reduces geopolitical risk, leverages trade deals. You see European firms moving closer to Europe, US firms closer to the US or Mexico. Nimble supply chain, routing is key. What about inventory? Are companies holding more stock? Definitely seeing a shift from just in time to just in case, carrying higher inventories of critical stuff, building in buffer time, big retailers are stocking up warehouses more. And are there clever ways around the tariffs? Legal tactics? Oh, yeah, tariff engineering is a whole field trying to change product classification codes, HS, codes shifting where the final transformation happens, using bonded warehouses or Foreign Trade Zones, exactly, filing for exemptions, lobbying. It's all part of the playbook for larger companies, and relationships with suppliers must be more crucial than ever. Absolutely closer collaboration, longer contracts, maybe even financial support for key partners, and mapping your supply chain deeply, knowing who your suppliers, suppliers are, to spot hidden risks, plus just being ready for anything, right? Scenario planning, essential, running simulations. What if this happens? Having contingency plans, alternate materials, maybe redesigning products to be more modular. Agility is the competitive advantage now, and constant geopolitical risk monitoring, it's clear technology is a huge part of this response, maybe even driving some of it totally critical. Ai, data, analytics, automation, they're enabling this shift. It's less about chasing cheap labor now, maybe more about chasing efficiency through tech. How does automation make local production viable again? Well, it can neutralize that low wage advantage. China had robots, advanced machinery in the US or Europe, they don't care about wages, those automated lights out factories we hear about that trends accelerating high terrorists give you more incentive to automate at home rather than import. And things like 3d printing allow for localized production of certain parts and AI's role in optimizing these complex shifting chains, huge potential. Analyzing masses of data to suggest the best sourcing strategies, reallocating orders, automatically, forecasting demand better, even flagging geopolitical risks before they blow up exactly. AI can run those simulations the digital twins to test resilience. It's really augmenting human decision making in complex ways. What about just managing the paperwork, trade compliance? AI is helping there too. Automating product classification, spotting chances to use trade treaties, filling out forms, digitizing the whole process gives much better visibility, and automation enables bringing back some advanced manufacturing, chips, pharma, yeah, precision automation makes onshoring those industries more feasible. You see with the new US chip fabs being built, technology is also streamlining the actual movement of goods, the logistics for sure, platforms matching freight loads, intelligent rerouting, Blockchain for tracking Providence, transparently, IoT sensors, tracking shipments in real time, and even using AI as an early warning system, looking at satellite images, yeah, tracking factory activity, Port throughput via satellite and AI to get a real time pulse on economic shifts, pretty amazing stuff. So it really feels like we're entering a new phase. Economic nationalism is up. Tariffs are high, right? A definite trend towards that, maybe a bifurcated global economy. Tariffs are a key tool hitting those 100 year highs, and supply chains are reorganizing, not just for cost, but for resilience, for geopolitics, leading to maybe shorter chains, but probably more expensive ones, which could mean higher prices for consumers, ultimately, but innovation could offset some of that. Right, new production methods, smarter operations. Absolutely, there's huge potential for innovation to blunt the tariff impacts, but it needs as we discuss real expertise and nuance, not just slapping on duties, and we still see those contrasting views, skeptics like Molson Hart saying tariffs fail without deeper fixes, versus others, hoping this jolts companies into finally reducing that over reliance on China and China's perspective, losing low end manufacturing isn't New, but this trade war hits their high tech goals creates more urgency for them to internationalize the yuan, build alternative trade networks, and they're pouring money into AI and robotics too. So the global supply map is definitely being redrawn. Regional hubs, those connector economies, Vietnam, Mexico, Indonesia, Poland, Morocco, because. Be more important, but it seems unlikely one country just steps in to replace China wholesale anytime soon. It's more fragmented now, and the message for companies seems crystal clear, adapt or get left behind. Supply chain management is now absolutely core strategy, resilience, agility, intelligence and understanding that bigger geopolitical picture, like Dalio said, it's not mostly about tariffs, exactly. That's what success looks like in this new era. But you know, despite the stress and uncertainty, global trade is fluid. Companies are resourceful. They are it's a tough time, no doubt, but it's also a chance to build genuinely better, more robust supply chains using adaptation and technology. So as we've dug into here, tariffs are forcing this real time reshaping, and the companies that are smart, agile, proactive, they can navigate the storm and maybe even come out stronger. So just to wrap up the key takeaways for you listening, we saw the sheer speed and scale of these tariff changes. We looked at the complex reasons China became so dominant in manufacturing in the first place, right? And those ripple effects spreading out across different countries, different industries, and critically, the role of resilience in technology, in how companies are trying to cope and adapt. And it really feels like this is just the start of a pretty profound shift in the global economy. Yeah, we're thinking about the long term implications for businesses, consumers, international relations. It's all interconnected. So maybe a final thought to leave you with, given how intertwined economics and geopolitics are now, what might be some of the unexpected consequences of this new tariff world order that could emerge down the road? That's a great question, definitely something to keep watching and thinking about absolutely well. Thank you for taking this deep dive with us today into such a complex and fast moving topic.
Blythe Brumleve:
59:03
I hope you enjoyed this episode of everything is logistics, a podcast for the thinkers in freight, telling the stories behind how your favorite stuff and people get from point A to B. Subscribe to the show, sign up for our newsletter and follow our socials over at everything is logistics.com and in addition to the podcast, I also wanted to let you all know about another company I operate, and that's digital dispatch, where we help you build a better website. Now, a lot of the times, we hand this task of building a new website or refreshing a current one off to a co worker's child, a neighbor down the street or a stranger around the world, where you probably spend more time explaining the freight industry than it takes to actually build the dang website. Well, that doesn't happen at Digital dispatch. We've been building online since 2009 but we're also early adopters of AI automation and other website tactics that help your company to be a central place, to pull in all of your social media posts, recruit new employees and give potential customers a glimpse into how you operate your business. Our new website builds start as low as$1,500 along with ongoing website management, maintenance and updates starting at $90 a month, plus some bonus freight marketing and sales content similar to what you hear on the podcast. You can watch a quick explainer video over on digitaldispatch.io just check out the pricing page once you arrive, and you can see how we can build your digital ecosystem on a strong foundation. Until then, I hope you enjoyed this episode. I'll see you all real soon and go jags. You.
