1) DEFM420 DUE DECEMBER 7 Instructions Assignment 5: Week 5: (Explain a contracto estimating and accounting systems) essay. Use the following format for creation of an essay covering the topic, Govern

Running head: RESEARCH PAPER 0

Impact of Global Trade Policies on Supply Chain Strategies

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Abstract

International Trade is an important aspect of the world economy, playing an essential part in growth, creativity and partnerships. Yet trade policies, including tariffs, quotas and export controls, prominently influence the supply management of MNCs, bringing issues like cost increases, restricted access to markets and compliance issues. This paper explores the question: “How does the current global business environment affect the configurational developments of supply chain networks in MNCs?” Based on literary reviews and cases, it analyses how trade policies affect cost, supply base and procurement. The paper also provides recommendations for supply chain diversification, the application of innovations such as artificial intelligence and Blockchain and policymakers' engagement. The results present applied findings and recommend development paths for a subsequent investigation of the trade policy consequences and adaptive measures.

Introduction to the Topic and Problem Statement

International trade agreements comprise an essential part of foreign policies since they determine the nature of economic relations between countries and, thus, the nature of global trade. These are tariffs, which are taxes on imports or exports; quotas, which are limitations on certain types of goods; export controls, which are restrictions on certain goods; and Free Trade, which reduces trade barriers. Although these policies aim to control trade and shield domestic industries, they also pose challenges for international businesses operating in different markets (Duemler, 2021).

Trade conflicts such as the US-China trade war, Brexit and changes in trade relations have increased competition and volatility in the global markets. Due to new regulations, companies can no longer afford to set their supply chain strategies and implementations in cement, while at the same time ensuring great efficiency and competitiveness (Tharp, 2021).

Problem Statement

Fluctuations in trade policies affect the configuration of supply chain networks and present difficulties to MNCs working to establish efficient solutions that meet compliance needs. For instance, fluctuations in import tariffs during the present trade war between the United States and China disrupted sourcing plans and obligate extra costs on firms. These changes do not make it easy to achieve increased profitability or efficient operations, as Garrett (2010) notes. The central question arising from this issue is:

”What kind of difficulties do companies encounter with the new altering pattern of trade regulation concerning efficiency and competitiveness?”

This paper seeks to address the critical question:

"How does the current global business environment affect the configurational developments of supply chain networks in MNCs?”

This paper aims to identify how these policies affect structural and strategic supply chain management decisions and provides guidelines on how to manage some of the challenges.

Research on the impact of global trade policies on supply chains is needed for the interest of firms, governments, and policymakers. Competitiveness, resilience and profitability are the key organizational goals that effective supply chain management achieves for MNCs. Supply chain policy fluctuations can be managed through new developments in the supply chain, hence promoting success in the future (Duemler, 2021). These findings point further to how policymakers can develop trade balance regulations that can enhance economic growth and stability for businesses (FAR, 2024). This research confirms the significant imperative for enhanced supply chain innovation to generate adaptability in conditions of modern global trade.

Literature Review: Background Research on the Topic

Overview of Global Trade Policies

Tariffs, trade defenses and free trade agreements are global trade policies that define and control international trade and economic relations. Taxes levied on imports or exports and tariffs have the potential to safeguard local industries, although at the cost of raising plenty of issues for MNCs. Equally, measures of post-written trade, such as anti-dumping measures, protect the local market from unfair business undertakings. International economic organizations like NAFTA and the European Union single market encourage zero-tariff trades, meaning they help support integration (Duemler, 2021).

The global economy's trend has slowly changed from globalization to regionalization, where localization, such as through regional trade arrangements such as the RCEP in Asia, is emphasized. Brexit and the trade war between the United States and China are among the exemplary events that demonstrate this change and raise policy unpredictability, which in turn obliges businesses to seek new strategic supply chain configurations (Tharp, 2021).

Impacts on Supply Chains

International business policies play a critical role in supply chain management because they determine costs, sources of material, and market access. For instance, in the case of a trade war between the USA and China, higher tariffs for electronics and machinery forced producers to search for other cheaper regions from which to source their produce, such as Vietnam or Mexico, to avoid the high cost of production. Export controls include restrictions on the export of semiconductors and quotas, which restrict the quantities of goods that can be exported, limit market access and disrupt production schedules, making competition a significant issue (Garrett, 2010). Additionally, lead time and operating cost are two areas where trade policy fluctuations have adverse effects, and practices such as contract digitization and advanced analytics have emerged as ways of managing these disruptions (Duemler, 2021).

Examples from Industry

The effects of trade policies are well illustrated by organizations that involve themselves in industries influenced by geopolitical risks. This was evident through the US-China trade war that impacted industries such as technology and car manufacturing, making players like Apple seek other hubs for sourcing supplies and new manufacturing regions in South Eastern Asia. Likewise, Brexit created new barriers through customs controls and tariffs, which slowed production and raised costs in such sectors as automobile assembly and medical prescriptions. For instance, Nissan encountered extra costs and longer lead times at the UK-EU borders, hence revolving the supply chain. These examples demonstrate why increased costs, longer lead times, and changes in sourcing require supply chain flexibility and technology reinforcement (Tharp, 2021).

Discussion of Ideas on the Topic and Problem

Current global trade structures pose troublesome environments to MNCs, bringing about cost variations, political risk and regulation instabilities. Higher tariffs, especially in events such as the US-China trade war, have affected procurement budgets and diminished the efficiency of the supply chain (Tharp, 2021). Likewise, macro-environmental factors, like Brexit in Europe and sanctions, lead to operations delays and unreliable supplier access (Garrett, 2011). They also must understand different legislation in different countries that enhances bureaucratic costs, non-compliance risks, and time consumption (FAR, 2024).

To overcome these challenges, companies are shifting their focus to supply chain management. Some other changes in procurement choices are shifting towards reshoring or nearshoring to avoid risks associated with dependence on some regions and high levels of tariffs (Duemler, 2021). AI and blockchain are some of the compliance technologies that make trade processes easier, reduce paperwork, and enhance effectiveness (Tharp, 2021). Also, continuity and vendor consolidation are still key strategic business priorities risks surrounding contingency plans and risk diversification among suppliers support operational flexibility and robustness (Garrett, 2010).

Globalization is providing uncertainties through the specialization of commodities of trade and MNCs technologies are at the forefront of driving the complexities. The most relevant source of information for every regulated trade is in one place, which minimizes overhead and paperwork (FAR, 2024). Also, through big data analytics, the policies in the trade environment can be predicted so that organizations can preparedly counteract the adoption of the new policies, thus improving flexibility (Duemler, 2021).

Discussion of New Solutions to the Problem

Proposed Solutions

Therefore, Volatile trade policies remain avenues for MNCs to manage by adopting strategic approaches. Diversification of the supply chain that increases the suppliers’ base in numerous geographical locations to solve the problem of overdependency and related risks such as trade war or location instability. For instance, supply from Southeast Asia or Latin America has been efficient, particularly during upheavals such as the US-China trade war (Tharp, 2021).

The application of superior systems, including AI and blockchain, optimizes supply chain visibility and sustainability. AI anticipates policy change through data analysis, which, on its part, blockchain provides real-time tracking and error-free recording (Duemler, 2021). Furthermore, there is the consideration of simulation, which involves, for instance, preparing for high tariffs or border controls to create contingency and manage operational risks (Garrett, 2010). Interacting with governments is also crucial to addressing the development of stable trade policies that reflect the balance of economic and domestic needs (FAR, 2024).

Examples

This paper presents several real-life case studies to support the idea of these strategies. Apple, for instance, moved supply chains from China to Vietnam and India during the trade war between the US and China. In the same regard, Brexit triggered changes in the organizational arrangements among European firms to optimize costs while meeting the legal requirements. These cases show that in the case of trade challenges and competitive dynamics, it is crucial to take action in advance instead of reacting to events only (Tharp, 2021).

Evaluation of Solutions

However, these approaches have problems. Diversification's significant disadvantages include raising the initial cash flows needed for supplier acquisition and regional developments. Similarly, advanced technologies involve high capital investments in equipment and employee training, which are beyond the reach of such firms (Duemler, 2021). An element of the model's practice is scenario planning, based on accurate data and appropriate predictive models, which can also be questionable in conditions of high instability.

However, these limitations can only be improved if the strategies are aligned with organizational requirements since strengths such as resilience, adaptability and compliance are valuable assets. To optimize the benefits of these solutions, it is necessary to reduce the identified weaknesses, namely high implementation costs and data shortages (Garrett, 2010).

Conclusion

Summary

Global trade policies matter a lot in supply chains, exerting impacts on cost structures, suppliers, and efficiency for MNCs. Tariffs, export controls, and trading partners pose many difficulties, such as cost, interruption because of political fluctuations, and compliance. This paper has, contrary to popular belief, stressed the need to evaluate these policies to develop robust and flexible supply chain solutions. These topics include procurement decisions, technology adoption, and MNCs' collaboration with governments and through these, the paper reveals vital strategic directions for MNCs in unprecedented trade circumstances. Returning to the importance of supply chain diversification, scenario planning, and the implementation of new technologies, these strategies provide solutions for current and future problem-solving.

Future Research

Further work should be directed towards potential multilateral cooperation to stabilize trade environments and predict policy changes. Trade relations bring stable and reliable trade rules that benefit businesses and governments. Furthermore, the impacts of new trade technologies, including blockchain and artificial intelligence technology, on the global supply chain also deserve to be examined to improve transparency, compliance and adaptability. Enhancing studies of regional trade relations and the effects of digital intermediaries on supply chain operations also presents valuable information for the stakeholders. Thus, it is constructive to see in which of these areas future research can help create strategies that build resilience in a global environment that is, by its very nature, interconnected and more complex than ever before.

References

Duemler, J. (2021). Contract digitization and analytics: Goodbye paper audits; welcome to real-time scoring. Journal of Supply Chain Management, Logistics and Procurement, 4(2), 182. https://doi.org/10.69554/mfzn8913

FAR . (2024, September 30). Far. Part 42 - Contract Administration and Audit Services | Acquisition. GOV. https://www.acquisition.gov/far/part-42

Garrett, G. A. (2010). Government contract audits and compliance. CCH : Navigant.

Tharp, G. (2021). Recommendations for usage, commercial contracts, and cost recovery in government contracts. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4101961