Trade Wars Highlight Supply Chain Credit Risks


Global supply chains are only as strong as their weakest links, and current trade tensions are shining a spotlight on operational and financial supply chain risks.

Ratings agency Fitch has already cut its growth forecasts due to the knock-on effect of tariffs across the global economy, while the US-China trade war enters a new phase this week: an additional $250bn of Chinese imports are now subject to US tariffs, while China is threatening to respond with duties on $60bn of US exports to China.  Previous tariffs are having an effect: Maine fisherman are throwing live lobsters back into the ocean (Chinese tariffs make Canadian lobsters much cheaper). US tariffs are likely to push up Hurricane Florence rebuild costs, encouraging some construction firms to switch to US-sourced building materials.

The Brexit negotiations are also having an impact: the UK government has advised drug companies to stockpile medicines due to the risk of a no-deal Brexit; the pharmaceutical supply chain involves multiple journeys between the UK and the EU during the manufacturing process. And BMW have provisional plans for maintenance shutdowns next year to coincide with the Brexit deadline – again to avoid supply chain issues.

In a recent whitepaper, Credit Benchmark shows how bank-sourced data can be used to analyse differences in supply chain credit risks for a sample of 17 global OEMs. The report also provides details on the geographic and industry distribution of their extensive list of suppliers.

Some of the results are surprising – the US and the UK are both critical to the current global supply chain for these 17 companies; and some little-known companies are actually important suppliers to many of these global OEMs.

Download the paper using the below link, and to contact us for more information, email us at [email protected]

Download Whitepaper Now

Sovereign Bond Risk Management

In the current low yield environment, many Sovereign bonds issued by different countries are priced at similar levels. However, this Read more

Introduction For Credit Portfolio Managers

Credit Benchmark is a market-led response to three of the most critical issues facing credit risk professionals: 1) The need to Read more

Sovereign Default Risk In Developing Economies

This paper examines the use cases for Credit Benchmark’s Consensus Probabilities of Default (Consensus PDs), in the context of more Read more

Impact Of BCBS Proposals On IRB Banks

The Basel Committee on Banking Supervision recently published wide-reaching proposals for reducing variation in Credit Risk Weighted Assets, with a Read more


Follow us on:

Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.