Flexport hires trade economist as trade gets more risky than ever

Flexport said Dr. Levy will lead a research team “that identifies trends in global trade and how they impact the supply chain.”

Dr. Levy will also advise Flexport on policy developments and responses to global trade trends.

His appointment comes at a time when trade policy is whipsawing U.S. businesses. A surprise 25 percent tariff on $600 billion in goods coming from Mexico comes as the U.S. and China remain at loggerheads on reaching a trade deal.

“A lot of economic development since World War II has been premised on the ability to move things around, to take advantage of better sourcing or lower costs,” Levy said. But “recent policy obstacles have been thrown up that attack that trend.”

He added, “Previously, there’s been a fairly conscientious effort to change trade barriers in predictable ways. That’s a lot of the novelty of what’s going on now – changes are getting very rapid and difficult to predict. It puts a premium on working with someone who is flexible.”

The latest round of the U.S.-China trade war will, of course, be a major area of research for Dr. Levy.

Early research on the first round of 10 percent tariffs on $200 billion of imports from China show that costs are borne through the supply chain. That is, suppliers sometimes lower costs, but U.S. importers and customers are also paying up.

But the move to increase those tariffs to 25 percent is a significant step, Dr. Levy said.

There is hope for a deal to be reached in time for the upcoming G-20 Summit. But companies are not relying on that hope.

“You are seeing a lot of businesses that are putting more weight behind tariffs that are going to be around for quite a while,” Dr. Levy said. “The odds that we are stuck with these tariffs is increasing.”

Amid the trade war din, Dr. Levy said there are reasons for optimism. Most polls show the public has an increasingly positive view of international trade. Despite what’s happening in U.S. trade, most other countries are not erecting the same barriers, he said. Instead, they continue to open up their international trade.

“That’s something positive, but it should be worrying to us if we are carved out of these global supply chains,” Levy said. “The forces that are putting us into tighter integrations are still there.”