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For some Atlanta firms dependent on the U.S.-Asia trade lanes, commerce is “finding a way” despite a slew of self-imposed regulatory headwinds launched as salvos in a multi-front trade war.
While the U.S. and China backed away from their most rigid positions in May, companies are continuing to brace for the effects of the future tariff shifts or geopolitical conflicts.
The uncertainty, coming from multiple fronts, is leading to nightmarish scenario planning, raising costs and spurring searches for creative, collaborative solutions, experts said during a June 25 breakfast hosted by the Hong Kong Association of Atlanta.
The event helped cap a two-day roadshow centered around the visit of Maisie Ho, director of the Hong Kong Economic and Trade Office in New York.
For airplane spare parts exporter Aventure Aviation, tariffs have hit on both sides of its business, which consists of about 55 percent international sales.
During the days of triple-digit tariffs and tit-for-tat escalations, Aventure’s customers in China could see their landed costs of a part change while it was en route.
“There’s this huge tariff, and they don’t know, when the parts arrive, whether it’s still that high percentage or less, so some of them have decided to open up a sort of a pipeline through other countries, like Thailand or Singapore,” said Aventure CEO Zaheer Faruqi during the breakfast meeting at the Metro Atlanta Chamber.
On the U.S. side, Aventure has faced a taste of that same volatility. The Peachtree City-based company was forced to pause the expansion of new headquarters as many of the construction materials were set to come from abroad.
“They were saying ‘I’m sorry, the price that we gave you has changed, and now it’s going to be X percentage higher,’ and was significantly higher. We just couldn’t do it,” Mr. Faruqi said. “We had to suddenly go back to the drawing board and start looking for alternatives.”
Diversifying sourcing came into vogue during the pandemic and has remained a top priority for customers of UPS Supply Chain Solutions, says Sean Flaherty, vice president of strategy and marketing at the Atlanta-based company’s $13 billion unit focused on facilitating cross-border trade.
If you’re trying to solve it by yourself … it’s going to be a heavy, heavy lift.”
Sean flaherty, ups supply chain solutions
What’s different now is the agility required when traditional planning isn’t possible given the speed of change, he said. Often, cross-border trade problems are interlinked, Mr. Flaherty said, and companies should lean on their partners and peers to find solutions.
“No one is going through this in isolation,” he said. “There are a lot of different elements to this problem, and if you’re trying to solve it by yourself and going through infinite areas, it’s going to be a heavy, heavy lift.”
Who Pays for Tariffs — And How to Reduce Them
As for who pays the tariffs — a hot talking point for President Trump — Mr. Flaherty noted that, technically, the obligations (and any sharing of the burden) are outlined in the incoterms agreed upon between the shipper and the importer. Remitting the tariff, meanwhile, is generally handled by the latter.
The bigger question is who absorbs the increase in cost, which is a “business decision” with many overlapping considerations, Mr. Flaherty said.
U.S. companies, said Grant Thornton LLP‘s Warren Clark, have come under fire with the Chinese government for demanding steep discounts from their Chinese suppliers to even out their landed costs in the U.S..
But discounts and diversification are not the only way companies can rethink their exposure, he added.
Buyers can ask their suppliers to consider decouple services that may be baked into the cost of the goods, invoicing separately for line items like design hours and quality-control checks.
“All of that gets embedded within the product cost. If you can bifurcate those add-ons as separate costs, as a service that is not subject to tariff, then the product that you’re importing is at a lower price,” he said.
David Newsome, a former supply-chain and procurement executive at NAPA Auto Parts, said the company’s China decoupling began in earnest during the first Trump trade war, as the Atlanta-based company (Genuine Parts Co.) started looking for alternatives in India, Thailand, Taiwan and South Korea.
India provides some scale, he noted, but sourcing is not always as simple as it was in China.
“Although quality can be very good, sometimes logistics is mixed,” Mr. Newsome said, providing his comments as one of the resident experts in the audience.
He echoed the idea of negotiating with suppliers on costs in addition to casting a wider geographical net to source from new countries with lower tariff rates and mentioned that changing the material of the product being sourced is another way to switch things up.
Mr. Clark, meanwhile, noted that companies looking to source from other Asian nations should be sure that their new suppliers are not just their old Chinese vendors trans-shipping through third countries. The U.S. has begun cracking down on this, making it a centerpiece of recent negotiations with Vietnam.
Reasons for Optimism in U.S.-Asia Trade and Investment
Despite the complications, the speakers were adamant that opportunities abound for those savvy enough to seize them.
“Trade finds a way, commerce finds a way, it absolutely will,” said Mr. Flaherty, noting that UPS is focused on helping customers as they break through barriers.
Kiyo Kojima, a partner at Smith, Gambrell & Russell LLP, was bullish on the United States market, noting that he is seeing robust demand for inbound investment based on what he views as solid U.S. fundamentals like security, the rule of law and innovative institutions.
The U.S., being the world’s largest economy, is particularly well-suited for an age where unbridled globalization is reined in as companies rethink their compact with workers and allies, he said.
“In the last 80 years, we’ve had this unprecedented era in human history when anyone can go anywhere in the world, buy anything they want, take it anywhere they want, manufacture anything they want, and then export it to anywhere they want in the world,” he said. “Well, that era may be waning, and that presents new opportunities and risks.”
Rather than avoiding Asia, companies should look at the landscape with fresh eyes, said Mr. Clark, who lived in Singapore for many years.
“The opportunities there are still fantastic. You might have to be creative and agile and aggressive or assertive in those markets, but the opportunities are still there,” he said.
In wrapping up the event, longtime Hong Kong Association President Henry Yu gave a rundown of those opportunities, emphasizing Southeast Asia alongside the perennial juggernauts of China, Korea and Japan. He noted that semiconductor principals are looking to Malaysia, while Japanese automotive firms have carved out a major niche in Thailand. Vietnam and Indonesia, he said, need health care facilities to support their growing populations, and China continues to be a massive player in e-commerce.
Hong Kong, meanwhile, continues to be a key player in financial technology and the internationalization of the Chinese renminbi, a role that Mr. Yu hopes will draw the attention of key banking and payments players in the Southeast U.S.
Click here to read Mr. Yu’s full writeup about the June Atlanta roadshow his association hosted for Ms. Ho, which ends with a plea for Atlanta to take a delegation to the 2026 Asian Financial Forum in January.