Citi Corporates Adjust Supply Chains In Response To Trade Disputes

Corporate customers of Citi are having to make changes to their supply chains and other business operations as a result of ongoing trade disputes, the bank said in a new survey published Friday (November 16).

Reports in CNBC said Citi’s Treasury and Trade Solutions Asia unit conducted a poll with 64 of its business customers to assess how they are reacting to ongoing trade tensions. The companies represent some of the bank’s largest corporate clients across Asia, Europe, the Middle East and the Americas.

More than half of the businesses surveyed said they are planning to make adjustments to their supply chains, the survey found. That could mean moving manufacturing sites or investing in forming new ones to bypass markets most impacted by trade tensions, reports said, adding that businesses are motivated by the effort to avoid extra trade tariffs that the U.S., China and the European Union are introducing.

Nearly three-quarters of corporates surveyed said they expect trade disputes to continue, and anticipate trade tensions between China and the U.S. to last more than a year.

“This client poll underlines how companies are already proactively adjusting to the realities of the trade tensions,” said Citi Head of TTS for Asia Pacific Rajesh Mehta in a statement.

According to Citi, the impacts of trade disputes are significant in the southeast Asia region. For Citi TTS, that could mean an impact on profits: reports said the bank unit posted its nineteenth quarter in a row of growth between July and September of this year, with the growth attributed to expanding trade operations across southeast Asia.

But according to Citi, trade disputes between the U.S. and China are actually fueling trade growth within Asia itself.

Citi Treasury and Trade Solutions published the survey weeks after announcing an integration with Oracle ERP, allowing businesses using the ERP Banking-as-a-Service Connector to initiate payments from within the ERP platform, with payment instructions then being sent straight to Citi.