Trade Tariffs Force Suppliers and Engineers to Strengthen the Bond

Marta Danylenko
on July 17, 2019

The power of human relationships that create interpersonal bonds, whether in a family, friends or business setting, is more important than ever in an increasingly unstable and unpredictable world. Here, our CEO Melissa Albeck explores the critical nature of the supplier-engineer bond. 

China supplied 80 per cent of the rare earth minerals imported by the United States between 2014 and 2017. But with the US having increased tariffs on Chinese goods worth $200 billion from 10 per cent to 25 per cent, it puts this vital supply line in jeopardy. Against this backdrop, the supplier-engineer bond is more critical than ever.  

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A recent report published by the US Department of Commerce highlights the nation’s reliance on foreign supply chains and foreign sources of critical minerals. It also lists uranium, titanium and rare earth materials as crucial to the US economy and national security. The United States’ vulnerability to a trade war is clear and rare earths appear to be the latest pawn in the strategic head-to-head between the two nations.  

Although described by the US Geological Survey as a “relatively abundant group” of 17 chemical elements, rare earths are difficult (and expensive) to extract from the ground in high concentrations. Despite that, they have multiple applications and are essential in military equipment, healthcare, for motors in electric vehicles, computers, wind turbines, fibre optics, superconductors and lasers.  

Interestingly, several rare earth companies have seen their share prices soar due to restricted Chinese supply, as markets anticipate a surge in demand and higher prices. Many experts are worried about the long-term impact of an economic break up between China and the US. So how does this affect materials suppliers?

In the current climate, it is particularly important for suppliers to have strong relationships with engineers at their end customers. Such relationships transcend geographical borders, help minimise disruption and can safeguard future projects. 

“As buyers face higher costs to import their materials, it is essential that the supplier-customer relationship runs deep in order to maintain existing deals”.  

Melissa Albeck

In order to mitigate the risks caused by trade instability, suppliers also need to expand their network instead of simply relying on existing partnerships. Suppliers must look to extend their client base and find new opportunities in new markets. Despite not all materials suppliers being directly affected by the current issues, having plans in place can alleviate the potential risk to the business and future projects.  

With many relationships now forming and flourishing online, it seems only natural that building strong supplier-engineer relationships should also follow this formula

With many relationships now forming and flourishing online, it seems only natural that building strong supplier-engineer relationships should also follow this formula. Matmatch, a digital materials sourcing platform and database, allows suppliers to connect with a large pool of engineers in new markets. 

“Having online networks available means the materials sourcing industry is better positioned than ever to take its future into its own hands. As such, it’s advantageous for design engineers and materials suppliers alike to use such platforms”. 

Melissa Albeck

In periods of instability, materials suppliers should actively find stable spaces to mitigate the impact. By finding new ways of strengthening the engineer-supplier bond, we can ensure that trade disputes don’t disrupt innovations in product engineering and design. 

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