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One unexpected outcome of the tariff war is China's decision to publish the list of brands for whom they manufacture products. Many Canadian businesses will have breathed a sigh of relief, having already communicated to their customers that their products were made in China, but for others, this could have a damaging reputational impact.
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Why "Made in China" is a problem
Sourcing from China made sound business sense in the past. The country is well equipped for large-scale manufacturing, import costs are low, and China is eager to develop trade routes with countries like Canada and the US.
However, as time goes on, consumers are increasingly concerning themselves with the ethics of the sourcing strategies employed by the brands they support. When businesses cannot assure them of the minimal environmental impact or ethical labor practices of those decisions, they may take their business elsewhere.
Businesses have a responsibility to be transparent with their customers, assuaging their fears and assuring them that they are engaging in sustainable and ethical sourcing practices. This may mean auditing the factories in which their products are made and publishing the results or walking away from a supplier who cannot meet their high standards.
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Don't be complacent
If your brand name was not directly published on the list, don't be complacent. Some businesses whose products are manufactured in China have not been directly named as their products are routed first through a third party or global distributor bearing a different name. However, savvy consumers will quickly identify which parent businesses those distributors are working for. Therefore, if your products are made in China, you would be wise to disclose that fact sooner rather than later.
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Why transparency matters
Your customers care about your supply chain. They want to know that the products they buy from you are safe and were manufactured in an environment in which human operators are not subject to harm or coercion. They want to know that your suppliers adhere to stringent environmental and ethical standards and that the entire logistics chain has been built to align with your published values.
By coming clean about your sourcing practices, you will build trust among your customer community. By being honest with yourself, you can identify ways to build resilience into your supply chain, whether it's by switching to local manufacturers or suppliers, strengthening existing supplier relationships, or by front-loading your inventory to meet customer demand.
This tariff trade war is only getting started, and it is hard to predict what will come next. It is time to be entirely transparent, assess all areas of your business, and make changes where needed to build resilience and foster consumer trust.
