Trade War Update: Effects of Taxes and Tariffs in the 3PL industry

US-China trade war

Key Points:

• In less than two weeks, President Donald Trump must decide whether to slap tariffs on $156 billion in consumer goods made in China or move the goal post yet again in lieu of the comprehensive trade deal.
• During the Oval Office announcement of the latest truce, Treasury Secretary Mnuchin assured the public there would be more than enough time to finish the deal and permanently avert further tariffs.

Third-party logistics providers are increasingly shaping the supply chain landscape. This is so even as many people are yet to embrace 3pl services and activities.

This has made many 3pl service providers drive down costs to encourage people to embrace the service. After the signing of the Tax and Job Act Legislation into law in 2017, corporations had high expectations of its benefits.

Effects of Taxes in the 3PL industry

The bill has helped to deliver many positive outcomes, and there is also a high economic output. According to NASSTRAC, a conference held in May 2018, the law has helped $3.8 billion to be reinvested back into the industry.

This has come in the form of benefits, environmentally-friendly equipment, wages, and safer environments. The main effects of taxes and tariffs include:

• Improved wages and benefits
• Safe and environmentally-friendly material
• A high rate of reinvestment
• Positive impact on the nation’s economy
• Depreciation in assets
• An Increased cost of doing business

3PL industry expectations

The transportation logistics stakeholders, such as the 3pl logistics service providers, shippers, and carriers, expected a boost in investment, benefits in asset depreciation, and a high number of jobs.

They also anticipated for better employee pay and a general improvement of the bottom line. According to a survey by Logistics Management reader, this was fulfilled as only 6.6% of stakeholders didn’t have a positive outlook.

Conclusion

3PL industry taxes and tariffs have been taken positively, and their outcomes have generally been accepted. Although some stakeholders have viewed it negatively due to the increased uncertainty that it has created, in general, it has provided high stimuli for businesses.

List of Sources

• https://www.logisticsmgmt.com/article/impact_of_tax_reform_on_logistics_is_solid_but_comes_with_questions_over_lo
• https://www.logisticsmgmt.com/topic/tag/NASSTRAC
• https://www.cnbc.com/2019/12/06/trump-faces-complicated-calculus-on-december-tariffs-on-chinese-goods.html