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Intensifying trade disputes fuel nearshoring movement, affecting logistics service providers significantly

Intensifying trade conflicts are leading automotive firms to shift towards nearshoring, altering logistics and supply networks not only in North America but also globally.

Stepping up regional manufacturing: Trade conflicts fuel increasing emphasis on local supply...
Stepping up regional manufacturing: Trade conflicts fuel increasing emphasis on local supply chains, potentially reshaping logistics sector roles

Intensifying trade disputes fuel nearshoring movement, affecting logistics service providers significantly

The global automotive industry is facing a significant transformation due to escalating trade conflicts between the USA, Europe, and China. These disputes, particularly during the second term of President Trump, have led to increased tariffs and retaliatory measures that have disrupted supply chains and added costs for shipping and distribution.

Countries most affected by these conflicts include China, the EU, Canada, and Mexico, as they are heavily involved in import/export exchanges with the US and China. The trade disputes have notably impacted the automotive industry and logistics providers, with high tariffs imposed on vehicles and parts, such as 25% tariffs on automobiles and related products.

In response to these challenges, the automotive industry is rethinking its supply chain strategies. One such trend gaining momentum is nearshoring, which involves moving production closer to home markets to mitigate the effects of rising tariffs and reduce dependency on Chinese manufacturing.

The future of the automotive industry is also being shaped by sustainability goals and the electric revolution. Countries are focusing on retaining this vital pillar industry, especially its electric future, to maintain their competitive edge. As the industry adapts to these changes, resilience improvements are being prioritized to ensure continued success in the face of ongoing challenges.

Logistics providers must stay ahead of the curve to capitalise on new opportunities and manage risks in this rapidly evolving landscape. Battery localisation is another trend reshaping the future of automotive logistics, playing a pivotal role in the industry's adaptation.

In 2025, the global automotive industry changes are intensifying the challenges for logistics providers. Automotive Original Equipment Manufacturers (OEMs) are also reducing costs due to a margin squeeze and market shifts. Despite these challenges, the industry is expected to face cost pressures and navigate through complex logistics and supply chain issues.

The future of automotive logistics is uncertain, but one thing is clear: it will be a dynamic and evolving field. Logistics providers must adapt and innovate to stay competitive and ensure the smooth operation of the global automotive supply chain.

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