Trade war mixed blessing for printers

The US-China trade war is having an impact on international stock markets and supply chains – but there may be silver linings for Australian printers.

The trade war has alarmed Australian economists, with the Australian dollar sinking below 70 US cents due to the disruption – but that’s a positive for print, says Andrew Macaulay, CEO PIAA.

“The Australian dollar will be low for the foreseeable future, and that will be good for Australian exports, which is generally good for Australian packaging and labelling, which often involves premium print.

“We are starting to become competitive in some markets – we have some members who export print, and the high dollar was impacting them. This will be good for them. Super-efficient printers are also more competitive in the export of printed material,” he told Print21.

Macaulay says the trade war is a two-edged sword, though, with the low dollar also making imports of consumables and components more expensive.

“That means paper, capital equipment, those types of things. The trade war has also brought the concept of tariff barriers back into Australian policy thinking, which is not good for Australian print where the biggest consumable is paper and most of it is imported. We’re addressing that with the government right now,” he said.

Louise McGrath, international trade advocate at the Australian Industry Group, told Print21 that disruptions may mean print buyers will be less likely to offshore time-sensitive work.

“One of the advantages for the print industry in terms of offshoring is timeliness. If there’s a disruption in shipping lines, for example, you’re not going to risk sending printing work offshore,” she said. “Long-term printing work is unlikely to change, but short-term jobs might.”

There are supply chain risks for manufacturers, however, with concerns around availability of equipment and consumables.

“It is complicated for Australian manufacturers because the US and China are an integral part of our supply chain. We use a lot of American technologies and a lot of Chinese imports. Someone might make a machine using American technology, but the bolts holding it together would be from China.

“When the tariffs first hit in the US there was difficulty getting product from China, because Chinese traders were stockpiling product there before tariffs began. That meant there was no excess supply, and we had a lot of complaints from members that they couldn’t get products from China. Australian manufacturers had no opportunity to access that product,” said McGrath, and warned that similar behaviour may again take place when new tariffs hit in September.

McGrath has advised manufacturers to keep on top of supply chains to avoid nasty shocks.

“Manufacturers need to have lots of conversations with suppliers and customers to make sure they won’t be surprised by any interruption to supply. That could be because of increased tariffs, or because there’s someone willing to pay a bit more, shrinking supply,” she said.

The ASX suffered two straight days of heavy losses this week and the Dow Jones lost 1000 points, while China lowered its currency to below seven yuan to the US dollar – its lowest rate against the greenback in more than 10 years – in a move US president Donald Trump labelled “currency manipulation”.