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Holiday shopping season just around the corner and despite trade tensions cooling since liberation day, companies and investors are still waiting for the US and China to reach a trade deal. Joining us on this now is Karim Kafouri, CEO of the Atlas Network and author of supply chain ups and downs. Thanks for being here.

Thank you for having me.

So, Karim, we have this news out of, um, Asia today that maybe we're getting closer to a US-China deal. But what how much have companies adjusted to the tariffs and the supply chain back and forth in order to have us well supplied for the holiday season.

Sure. Well, businesses are nimble, you know, and they know how to adjust accordingly. So we hear from the studies and research that so many have stockpiled or have bought in advance to accommodate what we're going to see here coming into the holidays, which is going to be a significant amount of bargain shopping. Everyone's going to be looking for those opportunities. Every time there was those 90-day pauses, businesses were jumping on top of that. We saw imports skyrocketing. And so in accordance with uh navigating these challenges, businesses do what they always do, which is find a way and an innovative way at that.

And so, not only then, it sounds like that they have the supply they need, but will they be able to be to provide it at the prices that consumers will pay?

Well, again, I think that it comes business to business, product to product, industry to industry. And depending upon what strategy they had put in place, whether it was absorption, deferral, terms and conditions, uh price engineering or alternative supply chains, many businesses had opportunities to look at ways to still be able to get products to consumers when they needed them and at a price that they needed them for. You know, we think about things like the holidays and 87% of our decorations and artificial trees come from China. Um we think about things like Thanksgiving coming and the cost of vegetables and fruits and all of the uh peripheral items that you need for those celebrations. And uh, you know, businesses need to think ahead accordingly, but at the same time consumers need to budget shop.

Gotcha. Um and so when we um lead up to those holidays, what to you is sort of still the the biggest um potential conflict point or tension point or weakness point, um you know, is it logistics, is it labor, is it raw materials as we go into the holidays?

I think it's really many of these things. And I think from a consumer to consumer basis, it'll change and shift a little bit. Consumers will have to, of course, sort of understand that everything may not be as available as it has been previously. They may not be able to buy multiples of products because of a level of scarcity. Um and some of their brands that they've come to know and love may not be available, but there may be alternative versions of this. And so from a business standpoint, there are opportunities where certain companies can kind of make entrance into the market knowing that their competitors are having restrictions in their supply chains. So, again, it's this scenario of opportunities through chaos for both consumers and for businesses. and each one has to look at it in their own perspective to determine how they can take advantage of the ebbs and flows that consistently have in global supply chain, whether it's uh today this environment or the pandemic a few years ago or otherwise, but the most important thing is that consumers get what they need when they need it. Uh that is the ultimate uh, you know, fulfillment of a global supply chain.

Um you mentioned the pandemic and of course we talked a lot about the supply chain then and how it needed to be modernized and updated. How much of that work has happened and what are some of the biggest lessons that now logistics providers have learned from that that they're applying to this situation?

You know, I would love to say a lot more has been learned than it has been. Uh but unfortunately, you know, in the world of business and and economics, we usually look at what's the most immediate threat. And I think once the pandemic sort of settled down and everything, businesses didn't take as much advantage as they should have. Uh, you know, in my company, what we help customers do is we look at worst case scenarios.

What happens if you don't have your product for the next six months? What happens if you have a strike at the ports or you have, um, you know, a pandemic or or tariff scenario, whatever it may be, because it's those uncontrollable factors that continue to dominate the supply chain that no one can really fully anticipate. So you have to assume kind of a worst-case scenario and plan for a better outcome. Um, some of these businesses have done a good job of that. I would say the vast majority of them have not. And so accordingly, this is why we see, um, such an impact in the markets with the news. You know, we have one day tariffs are sort of on a reprieve and then another day they're, you know, in full action and the markets are accordingly, you know, um having a direct impact that is not very uh sustainable.

Right.

And so in this way, you know, I think that consumers and businesses continue to face these challenges because of a lack of preparedness.

Um, when it comes to your customers, and you guys, you also deal in packaging, right? So how much of that raw material is tariffed at this point? And how consistent is it?

Yeah, I I mean, a certain amount of it is tariffed, but it's not necessarily only because of it being a material, but more it's country of origin. That's really what we're dealing with more than anything else. It's kind of two-sided. There's uh tariffs that are placed on materials themselves, there's harmonized tariff codes when you bring goods in um according to a classification of what the product is. And then outside of it, just this widespread tariff because it comes from XYZ country. Um all of these are challenges to face. We have looked to actively work with our customers to help them to determine whether keeping their existing supply chain or looking to alternative ones is the better move. This is a mixture of looking at materials, output, research, uh or sorry, resources, technology, and finally the costs to determine whether, you know, nearer is better or move to a different location. And if all of these uh pieces are not really in play, then the entire supply chain can break down and it would be better for you to just pay the tariff and accordingly figure out how to manage the excessive cost.

Yeah, so you have to weigh those factors. Yeah.

Correct. Correct.

Thanks so much for coming in. It was nice to see you.

Thank you so much for having me. Really appreciate it. Thank you again.