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How to resolve AdBlock issue? Trade shocks? This calculator shows the effects at your own business level
By Leon Gettler, Talking Business >>
US PRESIDENT Donald Trump’s tariffs will affect all economies and all businesses right around the world.
According to Arne Geschke, the co-founder and CTO of the Australian tech startup, Fair Supply, it will cost the Australian economy $15 billion. The worst affected sectors will be health, construction services, public administration and defence.
What’s caused this? The tariffs will hit the supply chains of these sectors. 
“Australia is not part of those countries that are directly affected by tariffs on a grand scale, obviously, and especially imports into Australia have not been tariffed specifically in response to what’s been going on – but still there’s an experienced increase in costs in the sectors in Australia,” Dr Geschke told Talking Business.
“That’s because the supply chains for these sectors span around the world,” he said.
“For example, health and social services in Australia don’t operate in a vacuum in Australia. They rely on machinery, on products for example that are required to run hospitals, medical devices that are often very complex and imported.
“Those products in themselves are complex and require inputs that are essentially embedded in global supply chains frameworks and some of these supply chains that cross borders are now affected by tariffs and those tariff costs are passed down.”
The Supply Chain Tariff Calculator
Dr Geschke’s firm has developed a Supply Chain Tariff Calculator which can help Australian businesses navigate ongoing trade tensions and supply chain chaos. It calculates the full impact of tariffs across multi-tiered and highly intertwined supply chains throughout all tariff points.
By using the calculator, businesses can estimate how the tariff will affect them and enable comparisons between other countries to identify the most cost-effective sourcing options. 
This calculator is based on data sets that come from global statistical agencies.
“In a globalised word, you need a data set that understands supply chains within countries and also the trade linkages between countries and in order to pull that off, you need a whole heap of data sets that need to be merged together into a single framework,” Dr Geschke said.
This is all real time modelling – as far as the statistical agencies do it – but it becomes real time by linking the tariff data sets to the stats data sets. It assesses how the tariffs’ supply chain shock trickles through the supply chains in that instance. The calculator is based on a country-to-country supply chain framework.
This is different to COVID trade shock
“The existing supply chains are now subject to tariff shocks and price increases and as these price increases are felt, over time companies start to find different suppliers and they might choose suppliers from different countries where the tariffs are not as high,” Dr Geschke said.
He said the supply chain shock felt around the world during COVID, which created higher inflation globally, was a forerunner of what is happening now with tariffs.
The difference, he said, was that during COVID, companies couldn’t produce because of sector shutdowns.
“COVID was a good dry run for understanding supply chain vulnerability and also supply chain fragility,” Dr Geschke said.
“As we move forward in this journey of putting tariffs in place but also a world where we are more prone to natural disasters, we will feel more of these disasters where, say, severe tropical storms take out production facilities, or flooding takes out production facilities.” 
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness
https://shows.acast.com/talkingbusiness/episodes/talking-business-13-interview-with-dr-arne-geschke-from-fair
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