Publican Trade Solutions uses artificial intelligence (AI) and automation to help custom brokers achieve a higher level of accuracy and compliance with global trade regulations.
Ram Ben Tzion, co-founder and CEO of the digital vetting platform, discusses tariff shifts and how automation through Publican World can help with the navigation of compliance complexities.
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Sourcing Journal: How effective was the tariff policy—at least for fashion goods—under President Donald Trump’s first administration?
Ram Ben Tzion: The tariff policy under President Trump, particularly targeting China, was aimed at reducing the trade imbalance and encouraging manufacturing to return to the U.S. For fashion goods, the implementation of tariffs saw a very limited impact, as sourcing and manufacturing remained almost unchanged. A key reason for this result is the high value of de minimis exemption that covered a significant part of the fashion market in general, and fast fashion specifically.
SJ: Given that the Biden administration kept the China tariffs in place, why do you think “little progress” has been made on tariffs and trade wars over the past four years?
RBT: The Biden administration tried to avoid any additional escalation in trade relations with China, as its focus was on managing economic recovery from the pandemic. The administration was more focused on restricting Chinese access to critical technologies and products to ensure U.S. technological dominance over China. This policy did not yield the desired results.
SJ: And with all the talk about tariffs and some implementation under Trump’s second administration, what trend will we see in 2025?
RBT: I think Trump 2.0 will be very different both in actions and impact. The president and his team have had 4 years to prepare. I believe we will see an aggressive and comprehensive trade policy, that will aim to reshape global economic order for years to come.
SJ: You are predicting a shift from “Made in China” to alternative regions. We’ve already seen the China Plus One policy where apparel manufacturers, since the 2018 tariffs, have moved some sourcing to other countries, such as Vietnam, Bangladesh and Cambodia. The question seems to be whether factories there have any additional capacity, and if not, what other alternative regions are there for fashion manufacturers?
RBT: For countries to be eligible for “Plus 1” or any other trade agreement benefit, they will need to negotiate a favorable position with the U.S. government. This will be applicable to South East Asia, India, as well as Latin American countries. To secure such favorable position, some concessions will be required in exchange, such as access to natural resources, infrastructure, or political support.