#10 - US & China Cripple Our Supply Chain, While the EU Regulates

🌍 Global Outlook

🔥 Trade War 2.0: USA vs. China – Procurement on Edge

The trade tensions between the U.S. and China have escalated to a critical new phase. As of February 4, 2025, the U.S. government has imposed an additional 10% tariff on imports from China and Hong Kong, officially citing concerns over immigration and drug trafficking threats. In response, Beijing has slapped tariffs on American energy products, signaling that the conflict may only intensify.

For procurement teams, this means one thing: rising costs and increased supply chain instability.

What are the real-world impacts?

For industries like automotive, electronics, manufacturing, and chemicals, the new tariffs and potential Chinese restrictions could immediately drive up the costs of raw materials and key components. Chinese suppliers, already under pressure, may pass these costs onto European buyers, making any imports that go through the U.S. significantly more expensive.

But it’s not just about price—it’s also about supply security. If China decides to limit exports of rare earth elements, semiconductors, or strategic chemicals, European companies may be forced to source alternatives from Vietnam, India, or Europe—where production capacity is more limited and costs are already higher.

What’s the message for procurement teams?

Those who wait, lose. Keeping a close eye on evolving restrictions, locking in long-term contracts with reliable suppliers, and identifying backup options before the market gets saturated will be the key to maintaining operational continuity and avoiding supply disruptions.

🔗 Sources: CH Robinson, Reuters

🖼️ Meme of the Day

Compri keeping you updated on the latest regulations—so you can sleep more (or less) peacefully!

⚖️ Compliance Focus

📜 New EU Sustainability Regulations: Higher Standards, Stricter Oversight

The European Union continues to push forward stricter regulations to enforce more ethical and transparent supply chains—the latest being the EU Forced Labor Regulation (EUFLR).

Coming into force in 2025, the EUFLR will directly impact any company operating within the EU or importing products into the European market. The regulation requires companies to prove that no forced labor was used at any stage of their supply chain.

To ensure compliance, companies must:

• Conduct thorough risk assessments to identify potential labor exploitation.

• Provide verifiable proof that their suppliers meet ethical standards.

• Implement corrective actions if any violations are discovered.

This translates to more audits, more reporting, and greater accountability for procurement teams. Supply chain due diligence is becoming even more critical, and failure to comply could result in severe penalties and reputational damage.

Meanwhile, on January 29, 2025, the European Commission published "A Competitiveness Compass for the EU", outlining plans to simplify sustainability reporting by reducing certain regulatory requirements. This so-called "Omnibus Simplification Package" could ease the bureaucratic burden on businesses, but the specific reforms are still being defined.

In short, while the EU is cutting some paperwork, it's ramping up compliance expectations—for procurement teams, the key takeaway is clear: fewer forms, but more responsibility in supplier oversight.

🔗 Sources: European Commission, EU Regulation Updates

🎙️ Podcast

In the latest episode of Compri Bene, we sit down with Eleonora Marongiu, Purchasing Manager at Selcom, a leader in electronic system design, to discuss how the rules of the game are changing.

3 Key Takeaways from the Interview:

🔍 Demand forecasting is becoming increasingly complex – Some customers provide 12-18 month forecasts, while others are navigating blindly. Post-chip crisis, one thing is clear: no visibility means a broken supply chain. And excessive stock? It’s not the answer—it ties up capital, risks obsolescence, and can lead to quality issues.

🤝 Procurement & Sales: A Necessary Partnership – Forget the old silos—today, procurement teams work directly with customers, especially in times of uncertainty. Procurement is no longer just an operational function; it’s becoming strategic, blending data, technology, and advanced negotiation tactics.

🚀 AI & Digitalization: Game-Changer or Just Hype? – Procurement innovation is on the rise, but the real challenge is achieving efficiency without drowning in data. AI has the potential to be a game-changer, but only if used wisely—to enhance planning and risk management.