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hi this is Anita the global trade gal
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today I want to talk a little bit about
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global trade and in particular a little
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bit about disruptions in global trade
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lately in the news there's been a lot of
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talk about the tariffs in particular
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Trump's tariffs and there's a there's
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basically two sides of this there's
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those who think that all the
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manufacturing should come back to the
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United States and that America should
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produce everything themselves they don't
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care how much it costs just that we
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should be producing things ourselves and
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there's those who really believe in open
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and fair trade i of course you would
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understand among the the proponent for
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the latter one because I am basically
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somebody who believes that trade should
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be open and fair and I see the trade on
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a very personal level every single day
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let me try to explain a couple reasons
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why it is so difficult to change
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manufacturing or why it's difficult to
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move manufacturing to another place we
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have done this quite a bit where we have
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moved manufacturing from China to a
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factory in Vietnam and for anything that
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we produce which requires us to you know
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to basically to move that manufacturing
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it requires a lot more work for us in
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the short term until we get it exactly
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right you know you might think well it
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should be easy to just be able to you
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know match something up and to be able
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to make something in another location it
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actually can be extremely difficult and
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there's many reasons for that but some
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of the reasons are particularly in my
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industry which is home furnishing and
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home decor and let's take for an example
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that we're going to have a piece of
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furniture that was made in China
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previously and let's say it was made by
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another manufacturer not by us and we
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get the sample of that furniture piece
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and we're going to make it in Vietnam we
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need to first of all get the sample of
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the piece and then we need to do a
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counter sample of it meaning that we
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need to show that we can produce it as
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close or as similar as possible but each
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person in manufacturing can have some
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unique things there can be unique
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machinery that's used we don't know
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exactly what kind of paint have they
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previously used so we have to mix the
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color of the paint ourselves and get as
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close to it as we can we need to look at
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what techniques they've used and we need
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to be able to do all of those things so
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it could take us quite a while or at
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least a month or month to really be able
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to develop that sample and get a sample
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that we feel then that we can send on to
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our customer of our client then you need
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to take the time and send it on to the
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customer and client and then they need
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to check it and approve it and then
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production starts so when Trump says
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these things like he will give 90 days
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you know 90 days leeway for people that
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won't have to pay the high tariffs and
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can be able to move their production it
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just doesn't work so quickly because
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even with the 90 days if you take you
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know the fact that somebody's got to
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send you the sample maybe takes a week
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or so you have to look at the sample
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study the sample do a counter sample you
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know a lot of times people might say
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they can do within a week or so but if
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they haven't really been working on it
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and haven't quoted the prices it could
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take some time so you've got to look at
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the price quotes then you've got to look
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and you've got to decide okay I'm going
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to I'm I'm going to you we're going to
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produce a sample on this and then you
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produce a sample on it and then you know
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a lot of times the customer wants to see
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the sample before they do production so
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then you send the sample back and then
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they confirm it and then from there you
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start on the order right now you
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probably already have lost 30 maybe 45
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days for most things to produce overseas
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is 60 days you've already lost the time
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frame for the 90 days before the tariffs
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go up this would be the same process
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whether you were trying to move
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something to the United States or
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whether you're trying to move something
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to another country the process pretty
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much is the same so we live in a world
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where I always say to people that you
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know when it comes to this the global
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supply chain we are living in a world
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where the global supply chain is getting
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more and more difficult
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there are so many disruptions in the
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international global supply chain and it
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has definitely become worse
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so anyone who's in the global supply
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chain needs to look and say "How can I
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so-called navigate these choppy waters
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of the global supply chain how can I
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learn to be able to weather any type of
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storm?" A lot of it's difficult because
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there are some products which I'm
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helping some people source for now which
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really 90% of the business is done in
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China so if you have somebody who let's
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say produces 90% of all the toys for the
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world or um art supplies or other things
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like that those type of supply chains
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just do not move overnight why because
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you don't have the materials in place
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there is not the technology in place
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there are many other things that are not
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in place to be able to move it and then
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on top of that you have the capacity
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where you might even be able to find
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someone who can produce what you need
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but they may not be willing to produce
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it why they simply don't have the
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capacity because they like everyone else
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need to be able to train up workers get
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workers in they need to make sure the
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workers know what they're doing and they
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need to ensure that the quality is up to
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standard that is why moving supply
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chains or moving production is very
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costly and very complicated
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so you know you can do all you can to
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try to navigate these you know these you
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know so-called choppy waters you can try
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to you know you you can try to ensure
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that you know somehow you know maybe you
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feel like you have the magic formula but
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it really is not as easy as it seems
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because there's so many things that need
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to be looked at as I've said before it
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comes basically down to three basic
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things one is can someone produce the
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quality even though they're producing
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the products that you need it doesn't
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mean that they have the ability to
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produce the quality that you need those
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can be two very very different things
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can be something which could be
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basically a barrier within the supply
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chain itself the other thing is the
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price they need to be able to produce it
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at a price which is comparable or
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comparable within reason of what you're
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basically you're buying now when all of
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this came about with the tariffs where I
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was really looking at all of these
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tariffs and what are we going to do and
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and and everything I started looking at
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other places that we have not normally
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looked at for production places such as
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Malaysia and Singapore and I can tell
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you for some of the prices that I got
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from these other places our cost was 100
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to 300% higher than we are buying now in
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Vietnam and I know there's been similar
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things when I've looked at things from
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China to Vietnam where our cost in
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Vietnam was much higher than China so
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price is another one of the factors that
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must be looked at besides quality can
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they produce the quality can they
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produce it at the price and the last one
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is of course quantity you know even
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though if they can produce the quality
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and let's say somehow you're lucky they
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can do the price can they give you the
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quantity that you need that's one reason
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why a lot of the big manufacturers in
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the United State the big stores in the
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United States such as Walmart or you
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know you look at Walmart or Target or
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you know Home Depot or some of these
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others still continued to buy from China
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after the first round of tariffs that
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happened during the first Trump
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administration why because of the fact
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that they even if they could find maybe
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someone to produce the quality and even
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they could find someone to um produce it
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you know at a price that they could
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accept they couldn't find someone to
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produce the quantity that they needed
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they needed a much larger quantity and
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the China factories many of them are set
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up to be able to produce that huge
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quantity which is needed I mean there
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are factories that I've seen in China
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that are producing a thousand containers
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a month they if you can imagine you know
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a thousand containers a month you have
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to imagine how big that factory is how
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many workers it has how how much
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machinery it has and how efficient and
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effective a factory like that would be
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to be able to produce those type of
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quantities you think about it that they
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would be loading you know how many
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containers they would need to load every
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single day or every single workday to be
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able to do that it's a lot so you'd have
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to have the people that can do the
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loading you have to have people that can
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do the you know do all the documents you
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have to have all of that in place in
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order to ship that type of quantity
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that's why when we talk about things
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like the global supply chain why
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disruptions in it like has been
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happening now are so difficult and so
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hard to fix and they're difficult and
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hard to fix in the short term it really
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really takes a long-term process because
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it is not easy my co-orker James Johnson
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has written a blog entitled optimizing
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global supply uh chain design and in
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there he talks about some of the
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disruptions risk management regulatory
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compliances and how complex they can be
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you know technologies and integration
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and and other things like that and you
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we'll put a link to his blog in our
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description in case you're you know
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interested and be able to read more and
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learn more about this but I wanted today
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to really focus on basically you know
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one area of this which is basically the
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disruption of the supply chain and how
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difficult it is to change the supply
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chain and change it overnight it is not
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easy it is extremely
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difficult and on top of that I just want
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to point out that there are many things
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which we produce which will not come
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back to America things such as basket
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weaving or you know I believe like
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furniture making you know those can be
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sort of messy businesses to be in if you
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go into a furniture factory there can be
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dust there can be sawdust and other
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things and and there's just not the
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skill and I don't think like Americans
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want to sit in their home and weave
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baskets you know they they just don't
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want to do it at a price that would be
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even that that you know wouldn't mean
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that the basket you're suddenly buying
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is going to cost you $1,000 they just
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don't want to do that those are not the
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industries that are going to come back
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and so where I'm all for you know
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manufacturing coming back in America but
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I think it needs to be targeted
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manufacturing and not the manufacturing
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that America will not do again there's
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no point at all in us putting attacks on
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things such as vanilla when we don't
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produce vanilla or baskets when we don't
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weave baskets or furniture when there's
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so little furniture production of the
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type that we do or you know other types
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of things like hand painting or lacquer
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or mother of pearl or other things like
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that which are just not done in the
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United States anymore we hope that
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you've enjoyed this and this little bit
11:37
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