The U.S. and E.U. trade agreement creates greater predictability for businesses and new opportunities for manufacturers prepared to act. In this Supply Chain Byte, Lisa Anderson discusses the finalized trade deal, including the U.S. tariff on E.U. goods, the E.U.’s elimination of most tariffs on U.S. goods, expanded access for agricultural products and significant investment and purchase commitments. The opportunity is real, but companies must be ready. Lisa explains why now is the time to implement or strengthen the SIOP process, with a special focus on capacity planning, so manufacturers can make smart decisions and take advantage of what is ahead.
What Is in the Deal?
The European Parliament approved the U.S. and EU trade deal. The deal brings historic changes to trade as it approves of U.S. tariffs of 15% on most exports (while keeping that ceiling level intact), eliminated tariffs charged on many U.S. industrial goods and provided preferential access to agricultural goods. It also includes European commitments plans to purchase $750 billion in energy by 2028, and it is expected that Europe will invest $600 billion into the U.S. For example, Siemens, Schneider Electric, Novartis, and AstraZeneca have announced substantial investments in the billions. In addition, there will be significant purchases of military equipment as Europe shores up its defense.
How Should You Prepare?
The U.S.-E.U. trade agreement creates greater predictability and new opportunities for manufacturers prepared to act. There will be significant opportunities for companies to take advantage of down-the-line impacts of these investments and purchases. Thus, if you want to take advantage, prepare for success.
Forward-thinking companies are utilizing advanced processes like SIOP (Sales Inventory Operations Planning) to stay ahead of changing conditions and to prepare to successfully scale with opportunities while keeping margins intact. The best companies are focused on developing demand plans, incorporating not just historical statistical formulas but also quotes, customer forecasts, market trends, and utilizing AI algorithms. But they do not stop there. They translate those forecasts into capacity plans so that they can prepare with the appropriate building, equipment, labor, storage, and supply chain network updates to create predictable revenue fulfillment and profit as opportunities arise. To learn more about how to roll out demand and supply planning and SIOP, download our eBook.