Supply Chain Traceability: Strategies for Forced Labor Compliance

Machine Operated Script

Lalo  00:00

We have Eric Hargraves. Derek Hargraves is from the firm Elliott Davis. They are a firm that does a lot of consulting and a bunch of different areas. He partnered with us, along with another person from a former HSI agent, but he Eric and his firm partnered with us to put this amazing training that we did for CBP for quite a few couple 100, no three, 300 or so of their of their auditors. Eric, welcome to the show. Thanks for coming back on, and this is actually proof that if you come on our show, even as a fan at one point or another, you may come back as an expert. So, I mean, I’m not saying that he was not back then, but he even experts. Listen to us and we, we brought him on the show. The only, the only thing that’s really bad about Eric, honestly, is that he is an Eagles fan. But

01:00

you had to get that one in, didn’t you? Lolly?

Andy  01:04

Okay? Eric, yeah. Welcome to the show. It’s like, we’re gonna have a great discussion. One of the things, I guess, is that it just Donna, may we need to, I guess, start gearing up for another fan show. So maybe throw something out there to our listeners if you are interested in coming on the show and talk about how you’ve listened to the show and how it’s helped you and whatnot, reach out to us. We’ll be glad to put a panel together and have a great discussion again. All right, Uyghur, forced labor prevention. It’s like, yeah, yeah, yeah. We’ve had so many shows, so many different people out there writing articles and all that, scaring the living daylights out of everybody regarding the regulation, the law and the regulations have followed it. And obviously Customs has, this is new territory for them, so they have kind of come along and feeling their way along a little bit in trying to crack down. And there’s been some, some really tough situations. A lot of goods have been seized. Can you give us some guidance or some insight into what you’re looking at here?

Eric Hargraves  02:12

Of course, of course. And our clients, they struggle with that very thing, right? Because it feels like a monumental task, but in many ways, supply chain tracing and compliance with uflpa has essentially become a prerequisite to importing right and it kind of goes back to reasonable care. If you’re an importer of record in the United States, you have to demonstrate reasonable care for the products that you’re bringing into this country. And this is no different. This falls under that requirement. But at the same time, tracing your supply chain is wildly complicated, and it’s in large part, we have this sort of inverted pyramid right when you’re an importer in the United States, so you’re making a product overseas, you typically send a purchase order to one tier one supplier, right? And in some cases, you may nominate some tier two suppliers, right? But the pyramid grows. You go from one supplier, and you may have hundreds of 1000s of suppliers in your supply chain based on the commodities you’re manufacturing and to trace every entity, every employee that’s ever worked on your production feels like an impossible task, and in many ways it is, but you’ve got to approach it with with with a strategic approach. You have to approach it from a risk based, high priority sector approach, and you kind of narrow down you focus to those entities that might be most at risk. But the uflpa is challenging, and I think maybe it would benefit us to go back and look at the history of supply chain tracing and then where we are today. Because supply chain tracing is not necessarily new. We’ve been doing that for for decades, for 100 years, and the uflpa is based on the Tariff Act of 1930 when we started prohibiting imports of goods that were produced, mined, manufactured in whole or in part, with the use of any type of forced labor, convict labor, indentured labor, child labor, and so forth. And so it’s not necessarily a new concept, but it is a new challenge for importers, because the level of scrutiny now has been raised and that really, you know, in fairness, that probably started back in 2015 when we did away with consumptive demand under TIF Tia and consumptive demand said that, well, if the demand being consumed in our nation is greater than what we could supply or provide, then we’ll kind of ignore the Tariff Act of 1930 and you can import products, and it won’t have a lot of scrutiny, because the demand is being generated by our popular. Prohibition, and we need that good or service, and so we’re not going to scrutinize the import. Well, that went away in 2015 and since then, we’ve begun to see increased enforcement, not just of importation, prohibition on forced labor, but several other laws as well, several other areas of concern from partner government agencies. It’s

Andy  05:21

been going on, basically is so the US is not supporting, you know, forced labor get all that. But there was always the loophole, and that loophole was or that exception became the norm. Everybody was utilizing it, and it was just turning their head against some of the situations. So the big thing that has changed, obviously, is in 2015 that loophole was basically cut off or shut down. So as you’re doing it, the as you’re also talking about it, as far as you know, yeah, you should be checking down to down your supply chain, or up the supply chain, however you want to say it, part of the scenario, though, that gets into is like, Okay, as you said, it’s so monumental. Depending on how complex your commodity is, you can think of an automobile even, and that may come up in later discussion about one little minor part and an automaker. It really messed them up for a while, but All right, let’s back up. Out of all of that you’re saying, Okay, I need to be looking at that from a risk perspective. All right, so how do I determine risk? What? What? What would be something along those lines to say, here’s your criteria, or here’s what I should be looking at.

Eric Hargraves  06:41

So the first thing we always advise clients on is that there’s really three documents. One is the statute itself, like the legal text. The second would be the forced labor Enforcement Task Force strategy. And every year, as required by the law, they’ve got to provide a congressional update on the strategy to enforce the law, and that happens annually. It just came out three weeks ago. Alright,

Andy  07:08

so let me start when you say they is like Customs has to supply a action plan or a working plan of how they’re going to enforce the law. Is that who you’re saying it’s,

Eric Hargraves  07:18

in this case, it’s not customs, it’s the forced labor Enforcement Task Force, which is founded under the Department of Homeland Security, and it’s a multi disciplinary group you’re going to have you know trade, DHS, who chairs the committee. The task force, several other government agencies are all included in this task force, and they have to outline the strategy of enforcing the law, and that has to be done annually. And so every year there’s this big anticipation of what’s going to be in the strategy update this year. So that’s the that’s really the second governing document importers need to be really aware of and their comply chain policies. However, they’re going to comply throughout their supply chain, needs to be consistent with those strategy updates. And then the third document that covers it is the operational guidance for importers, and that is published by customs.

Andy  08:17

Okay, so with what you just said, the thing that I guess, the the the some action is, is that, first off, people should still read, go and read the latest statute on the forced labor prevention. And secondly, would be no would, as far as the strategy would is that public, as far as what this task force is going to do, it

Eric Hargraves  08:43

is, and they publish it once annually, and you can access it on the CBP office of trade website. Actually you can find all three strategies. So there was one that came out initially with the statute, when it was passed and when it went into effect. That was back in 2021 when it was passed, it was passed and went into effect in 22 then there was last year strategy update, which came out, you know, end of July, early August. And then this year, it came out about three weeks ago, and it included some, some pretty powerful updates. And I think people need to be aware of those, because their their policies to comply with this are going to need to continue to evolve as the strategy evolves this year. In the strategy, we did make mention of the de minimis loophole. So, much like consumptive demand, you know the people, there’s a misconception that if you just ship it in under de minimis, you’re fine and it’s not going to be scrutinized for forced labor. That is not true. There’s no exception for de minimis shipments into the US on forced labor. Now, the funding and the financing for CBP to actually enforce all of those parcels coming into the country like that’s a monumental task. I’m not sure we can get there, but. It, I would, I would expect e commerce to see a massive amount of increased scrutiny on inbound parcels this coming year.

Andy  10:07

Well, that said again, I guess I’m looking at here. Let me ask a question with the three documents that we came back to, would that be, let’s just say that we’re all busy. We’re all dealing with a, you know, if we’re running our compliance area and all that, would this be something that, if you had enough staff, you would delegate that to somebody to say, I need you to become our resident expert on in on all three of these. So you’re an internal advisor to my department. Or would you say, whoever’s the department head, needs to make sure that they become proficient and current with all that knowledge and and be that resident expert.

Eric Hargraves  10:51

You know, this is this a great question? Andy, and I’m not sure there’s a simple answer. And I in it largely based on, you know, the size entity, small and medium enterprises are really going to struggle to have a robust compliance function. You know, in my opinion, you likely want to structure your organization. This is a trade compliance issue, as much as we want to talk about the human rights element of this and mitigating, preventing, assessing forced labor in your supply chain is a very, very noble effort, but at the end of the day, we’ve chosen to deal with it through restrictive trade policy. So it’s a trade compliance issue. If you want to retain your market access in the United States, tracing your supply chain is very much a prerequisite. And so I would say if, if you have the budget in your trade compliance team. This is where you’re going to spend most of your budget for the next few years. And it’s going to go beyond just customs compliance, and it’s going to be a supply chain function. However, again, I don’t think you can just throw resources at this and say, Here’s my full time staff. I think it’s bigger than that, I think you, like we said before, you’re going to need to take that risk based approach, to highlight the areas of risk in your supply chain that are going to be under greater scrutiny. And if you look at all three documents that we mentioned before, the legal text, the strategy updates and the operational guidance for importers, they all say slightly different things about the supply chain data you need to be tracing and providing for your shipments to retain market access. And so first thing you need to do is synchronize that data. What is it really saying? What’s the spirit of the law? What is the explicit requirement? And then what are you reading between the lines? And what else do you need to provide to prove there’s no forced labor in any sub tier of your supply chain? And high risk sectors? When the law was originally published, there were four high risk sectors in the strategy. There was apparel, cotton, tomatoes and polysilicon. And if you look at enforcement of the law and the number of detentions, of containers coming in, it followed that high risk sector, pretty you know, one for one we had, we started with electronics, and the greatest number of detentions were in the electronics industry because of that polysilicon. And then right behind that was apparel, footwear and textiles, because of apparel and cotton, and then behind that was agriculture and then heavy industrial machinery, right? And so the government is trying to tell you, we’re going to focus on these areas, first, because of NGO reporting advocacy groups. There are known grievances in that part of the world, in those industries. So we’re going to start there. So any good compliance program needs to start with those high risk sectors. Now, in the most recent strategy update, which came out, you know, three weeks ago, they’ve included aluminum PVC and seafood and so those are three new high risk sectors. And if you’re importing in those sectors, you need to be aware, and your compliance program needs to because we’re going to see detentions rise in those high risk sectors in the coming months.

Lalo  14:12

And what you’re saying, Eric, I feel that it’s very important to note that you do need to invest in those resources internally, especially because I think you were the one that cited a report or a study from a lot of Stratton, oh God, can you please remind me Stratton more or something like that, that they did a study of 800 or so products off the shelf. They literally went to retail stores pull 800 or so products. Tessa, can you tell me more? Because it’s that’s a really, really interesting statistic. And like, people are clueless as to what they’re even importing, in some cases, correct.

Eric Hargraves  14:51

That is correct. And, you know? And yeah, I’m an advocate for both CBP and their enforcement efforts and importers, and I don’t think we need to create. This world where there’s one against the other, right, where importers are trying to circumvent the law and get their products into the states, and CBP is trying to be restrictive to trade. First of all, CBP is just enforcing. Their job is to police the imports. That’s their job. They didn’t write the law, and they didn’t pass the law. They enforced the law. But importers, on the other hand, it’s not necessarily their fault either when some things are not fully traced. And Jennifer Gordon at Fordham University, she put out an amazing article, Ashley, she published a piece about strategies to approach using the forced labor import ban to improve worker conditions globally, like as an advocacy group, how do we actually do that? And she took three different approaches. One was, you approach the brands and retailers who are importing this stuff, and you restrict them so that they get in line. That’s the sort of top down approach. But then she said, there’s a second strategy, where you can approach it from going after tier one suppliers, those really large, big suppliers who are guilty of some of these horrible humanitarian things happening in China in particular. And that’s the sort of center approach, the middle of your supply chain approach. But then there’s a third approach where you can sort of, you can target, empowering the workers themselves, and this is much more difficult, but how do you empower workers to be able to organize and unionize and create better working conditions? But I think all three approaches are needed. But if you’re an importer, and the study that you’re referencing, this is where it gets very, very complicated, because your visibility and transparency are so limited, you may be sending a purchase order to a tier one supplier in this particular study, it was apparel, footwear and textiles, primarily using cotton products and the brands that were importing. This was a random study. They went into retailers and just pulled products off the shelf, and they did isotopic testing to determine the origin of the cotton. And I think 19% of that study who they thought were free and clear of any nexus to the Xinjiang region actually had cotton from that region. And so that’s incredible. And of that 19% like something, I can’t remember the exact number, but 30 or 50% of them thought that it was entirely farmed in the USA. They thought it was USA cotton.

Lalo  17:35

Yeah, I believe you said it was like they were doing in their marketing. Said 100% source from the United USA,

Eric Hargraves  17:42

right? And, and here’s, here’s why that’s so difficult in the apparel, footwear and textiles industry, you may farm your cotton in California, gray cotton in California, and you may ship the bales all the way to China, right? So there’s a buyer or some sort of trading company that’s importing bales of cotton into China. That cotton is then sent to a spinner, where the yarn is spun, and then a weaver or a knitter, and then a dye house and a finishing house. But when those bales go in, buy the container load, you know, tons and tons of cotton bought from the United States, which is good for our business, right? It’s good for America. They’re buying us cotton because it’s, it’s high quality. Well, when it gets to the trading warehouse, it can be co mingled with other cotton. And then when a when a purchase order comes in for cotton bales from a yarn spinner, both types of cotton can accidentally be sent or purposefully sent to the yarn spinner, and those fibers are spun together, and then all of a sudden, you have a DNA marker in your supply chain. And I if you do isotopic testing, it’s going to show up, and you’re going to see that the cotton didn’t only originate in the United States because it was commingled with other cotton in a warehouse at a trading facility and then spun into yarn and then knit or woven, and the rest is history. And so that’s why it is so important that supply chain tracing become a prerequisite for you to do business in China.

Andy  19:18

So for right that point right there. One of the things that I want to emphasize, especially to our listeners, is that this is something that the if you are a senior executive business owner, or whatever you’re sourcing folks and your compliance folks need to be joined at the hip. In today’s world, things have changed. You mentioned this is that in the past, you go so far. Okay, fine, in tracing it down tier one, maybe tier two, but you didn’t really look at the forced labor issues and all of that. And in today’s world, it is a. Completely different ballgame. Now here’s where I’m going with this is another action item. Is that the purchasing folks, if you’re listening to us, or if you’re in the compliance and all that, you need to get this over to the purchasing side, so that part of their vetting of new vendors and of products needs to incorporate the aspect of are, you know, is any of this looked at and used and manufactured with forced labor and with that, I don’t anticipate somebody being able to say, oh, okay, I have to start looking for it. Let me just check off a box. This is something that the compliance folks and the purchasing or sourcing folks should work together. Would you agree with that? Eric,

Eric Hargraves  20:46

yes, and I would probably take it one step further. I’d, I’d go beyond just sourcing, and I would, I would go all the way back to design and product development. And I think a lot of entities are getting to the point where a designer is actually driving the material that they want, which forces a sourcing agent, or somebody into a box that, you know, I’ve got to source this particular component, right? I think you’ve got to get everybody around a table from your design and engineering processes all the way through delivery. And you need to mitigate risk, you know, even in the conceptual phase of coming up with the idea for that product, and then let it flow through your organization

Andy  21:27

well. And to your point, all right, it just dawned on me, on something that, as you’re talking through, that, just like there is a forced labor Prevention Task Force that within the government has multiple disciplines. As you mentioned, it probably be wise for a private company to assemble something similar to that, to make sure that in their sourcing, their design, their their whole aspect, it has multiple disciplines. And you talk about the forced labor scenario there, and then from there, the question would come in, who would, in a sense, Chair some kind of effort like that? I’m thinking right now, the compliance side, but maybe it would be the purchasing side or something like that. But I mean, there’s a lot of risk to a company, not only from a legal perspective and a marketing brand perspective, but then financially. It’s, it’s, it’s, you know, you have a huge amount of risk with that as well.

Eric Hargraves  22:32

I completely agree with you, and I think that I’m going to use an analogy here that’s not intended to be holistic, but it’s a good analogy to help us think about it. And it is, you know, years and years and years ago, Consumer Product Safety Commission made supply chain tracing a real thing, right? Like, especially with the CPSIA for the children’s where that you’ve got to be able to trace your supply chain back to the origin in the event that there’s a safety risk for one of our consumers. And I mean, that’s commonplace now, right? I mean, the FTC is involved on labeling requirements, the FCC, the FDA, the EPA, all these partner government agencies are involved in protecting American consumers. This law is an extension of that, like we’ve been tracing supply chains on products for a very, very long time. And when that first came out, you know, organizations who were designing, manufacturing, producing, importing product had to have a traceability program of some sort to be able to to, you know, in the event of a recall, get that product off the shelf and, you know, go back to origin and fix the problem. And this is similar in that regard, is that we’re now tracing not for something that’s maybe chemically harmful for somebody inside of a product, but we’re tracing something that’s socially harmful for our society, and that is really denigrating culture at large, across borders. And so I think it’s wildly important that we recognize this is really the same effort, albeit with a much deeper compliance function, right? You’ve got to go all the way back to the end tier of your supply chain. Now, you can’t just go back to the factory. You got to go to all the sub tiers and ensure that you’re preventing this issue well.

Andy  24:21

And to your point here, here’s something else that comes into play, is that there’s a lot of companies, they said, you know, they sourced completely in the US and all that. That sounds great, but in today’s world, we really, it’s, it’s very rare that you’re going to find completely, you know, 100% sourced in one country or whatever. But here’s, here’s where I know that the of a billion dollars, if I’m not mistaken, that was seized, I think it was two years ago in the breakdown of that, actually very little of that, and I think somewhere around 80 million was. Is directly from China, but there was like 450 million, roughly, that came out of Malaysia, and another 375 million came out of Vietnam. And the point is, is that China, with their forced labor, is sending, especially the the cotton, but it’s sending other products now to other countries, other factories that are located in other countries. So having a strategic task force to look at things and assess it, and even where your current scenario is, is like, Okay, we vetted it. We thought we were in good shape. Continue on, validate it, check it out. Keep going and look at it. And you’re going to have to dispatch some people from your company, or hire somebody to do it, to go out and put boots on the ground, kind of a scenario to verify certain aspects of some of these things as you go into it. But that’s one of those where, I think, to your point getting multiple disciplines and you start talking through it. I think the big issue, for example, now, is where a lot of China products are going down into Mexico and are being, you know, included in and into as components or whatever. And I know that there are automotive factories that are being built in Mexico that are China cars that their, their thought was they’ll be able to build them in Mexico and then take advantage of the usmca, and that’s and there’s been some recent efforts on that to block that kind of stuff in, and when it comes in,

Eric Hargraves  26:45

I you know if you think, if you’re an importer, and you think that using a preferential duty agreement is going to eliminate the uflpa from being enforced on your containers, then you have a fundamental misunderstanding of the law and the way it’s written, because it is not just your certificate of origin that drives whether or not the flpa applies. And as matter of fact, it’s not even a restrictive trade policy merely against China. Because if you just look at the statistics of what’s been detained, China isn’t even in the top three of originating countries in Malaysia and Vietnam lead the way, and I think China is behind Mexico on detentions. And so the truth is, I think only 11% of the shipments detained have originated in China. But what is very clear is that they all are comprised of Chinese supply chain inputs that may have nexus to Xinjiang, or they may have nexus to the Entity List, or some sort of forced labor transfer program like poverty alleviation or land transfers, or the Pairing assistance program that is so widely in use, taking laborers and disseminating them throughout the country, and that’s that’s a massive challenge for your supply chain to be able to trace, because those inputs are going into third countries all over the world, and there’s even a bit of deception around some train shipments that are I’ll give you one example. Yeah, I’ll give you one example. We were working with a company who was making a leather product in China, and they decided that they were going to, they were going to move production from China to South Korea, and in South Korea, there’s a factory that was contracted to make the finished good, and they were planning on the certificate of origin being South Korea. But when you start tracing the supply chain, we came to find out that the leather was sourced in China. The sewing was done in China, the engraving was done in China, and the only thing that South Korea was doing was putting a hardware piece on the on the leather. Okay, so they were, they were finishing the assembly, but by and large, the functional properties of that product were all being produced in China. So declaring a certificate of origin from South Korea is a fallacy, and you have to help them understand you were doing that for preferential duty arrangement. But you’re not going to qualify, right? And furthermore, almost all of the raw materials and the labor included in your product originated in China, and so your country of origin for that shipment has to be China, I think, unfortunately, right? So you know, and sometimes you know, the duty you know cast is another one. Like there are a lot of production facilities in Central America that do a really great job making a finished product, but three quarters of the raw material came from Asia somewhere, and so tracing your supply chain is still a requirement. You. Even in preferential duty arrangements.

Andy  30:03

All right, well, we need to wrap this up, because we can keep on going, and it’s fascinating with this, I would say we’ve talked about reading those three documents. You said that the the location of those documents is on cbps website, right? All right.

Eric Hargraves  30:23

You can get to all of them actually through the uflpa link on CVPs website, there’s a really nice grouping of resources for importers, and you can find everything you need on that link.

Lalo  30:34

We’ll add that on our show notes, so everybody can just check your show notes, and then we’ll add that on there.

Andy  30:40

Second is given the serious thought of, maybe, of, as we were just talking through, it is validating, and, you know, verifying, I guess you know your current vendors to you know your your vetting process and maybe incorporate, I mean, I, we were just coming up with it, to me, I think it would be wise to have a multi disciplined even if it’s a small company, a multi disciplined committee, if you will, to review things just so that they can other aspects, operations, to illegal, to whatever it that as they’re looking at it, the more eyes you get on something, the more chances you’re going to find something. If there is a problem or that you’re compliant or not. It’s like, you know, they said it was us, but I’m seeing Chinese writing here, or whatever. Something doesn’t add up. Let’s talk about it. That would be a smart move. I think would you agree with that

Eric Hargraves  31:41

100% you know having a multi disciplinary task force inside your organization to deal with supply chain tracing and compliance to the uflpa is almost a requirement at this point. If you don’t have a bulletproof traceability program, you are likely going to struggle to provide the evidentiary standard, which is clear and convincing. You have to have clear and convincing evidence that there is no forced labor in your supply chain to rebut that presumption, and it’s highly unlikely you’ll be able to do that if you don’t start now. You know ahead of time

Andy  32:14

well, and then in looking at that is as you’re trying to review all that is assess it by risk. And I don’t know if we were definitive enough in this is that, but I guess if you are sourcing directly from China’s one red flag, Malaysia and Vietnam would be another one that if you’re sourcing from there, it would be another thing to check those things out. But then any other risk factors that come into play that you can think of that they should look and consider. Yeah,

Eric Hargraves  32:43

I mean, obviously you want to look at what’s published about the high risk sectors. That’s what we were saying. And if you are dealing and if you are, if you’re importing in any of those sectors, you’re at risk. So you need to look at your tier one suppliers and trace upstream. Secondly, you want to look at how enforcement is trending, and you can look at some of the decisions about detentions and whether or not then they are seized and excluded, and look at the trend of that data. And then, thirdly, you’re going to need to utilize some technology. You need to leverage some technology to highlight risks in your supply chain that are not obvious based on your tier one suppliers, and there are some really great tools out there that can help you surface risks, entities that might be at risk in your supply chain that are constantly trolling public data sources, and they’re surfacing Relationships between your tier one supplier and their sub tier trading partners, who they’re shipping to and receiving from their ownership structures, because all of that is public record. And it’ll also troll, you know, news outlets and entity lists, and it’ll provide you with a nice dashboard of, hey, here are your most at risk suppliers, and so we always advise our clients, firstly, let’s buy a license to one of these software providers import your supply chain. Let it drill down. Let’s say you import 100 supply partners, and six of them have a flag. Well, you’re going to start your compliance efforts on those six right. And then you’re going to start looking at the SKUs that you produce at those six and you’re going to trace the bill of materials and every operational entity related to that for your inbound shipments to the US outstanding.

Andy  34:33

I was going to talk about the technology, because there’s no way to do all of this manually. It’s it’s getting and implementing the use of, you know, software and systems and and the use of artificial intelligence in today’s world, and going through the massive amounts of data is just Paramount today and all that any other last. To Lalo, did you say something? I’m sorry.

Lalo  35:03

No, no, no, that was just some feedback. Don’t worry, that was not me. No, sorry.

Andy  35:08

Any last comments here, Eric, before we sign off,

Eric Hargraves  35:11

I would say in closing, I think you know, what are the what are the implications for importers? And I think not only do they need a multidisciplinary Task Force to prevent forced labor and to be compliant with their trade practices, but they need to start building a fairly heavy geopolitical team that understands conflict and trade disruption, because I think we are living in a world where BCG put out an amazing study on the volume of global trade and the shift of the volume of trade from historical ports to what they are today based on regulation and sort of restrictive industrial policy, and it has literally reshaped the volume of trade. And I think the uflpa, in one instance, has has been effective in reducing the amount of imports from China, but it has not reduced China’s exports. China’s exports actually went up almost 8% last year, but you need a team that understands world geopolitics and what’s happening in the Middle East right now, in Suez Canal, what’s happening with the Ukraine, Russia war, what’s happening with the US? China trade war, section 301, tariffs. It has wide bipartisan support. It’s not going anywhere. And the uflpa doesn’t sunset for another six years, and it’ll likely be renewed. So I think what what you need is a team of experts. And if you don’t have it in house, hire it from a consultancy or hire it from a legal firm, because you’re going to need that support to understand geopolitics and how it’s reshaping, perhaps, where your product is originating

Andy  36:58

well. And one of the things, though, you’re also saying is that taking note of the enforcement one of the other things, if there are companies here in the US that you’re producing products that is, you’re you look through and you’re seeing them getting stopped or seized or whatever, that gives you a good sales lead, Quite frankly, to say, hey, you know what I’m I’m a alternative source for you and and whatever be able to step up. There’s a lot of manufacturing in the US. There’s a great deal of it over in Arkansas that I’ve recently come across railroad parts. And, you know, parts for railroad cars and locomotives and different things. They’re manufacturing them like, man, you know, this is one of those aluminum and the steel and the issues, right? There be a great one to be able to say, hey, you know, let me look at this and step up and provide some alternatives to that, absolutely right?

Eric Hargraves  37:56

And there are, you know, I was at a trade convention this week in Tennessee was a lot of manufacturing, right? Lot of automotive manufacturing in Tennessee. You’ve got Nissan, your Toyota, you have these great it’s a pretty decent manufacturing hub in the United States. And you know, the number of domestic manufacturers that we have that are buying from domestic suppliers who don’t know that their domestic suppliers are actually importing critical components for them. Is, is it’s alarming to me, because there could be a lot of trade disruption related to those sub tier components that they’re unaware of. So supply chain tracing provides more benefits than just being good for humanity, which is, I mean, obviously we all care about that, and it is real what’s happening in China, and we need to do our best to mitigate it and prevent it, but it’s also going to disrupt your supply chain in ways you’re probably unaware of until you start tracing your chain. Well, folks, I’m

Andy  38:58

going to tell you, Eric’s giving us some great guidance here. This is one of those where, hopefully you will have, more than likely you’ll need to go back and listen to this and take notes and develop your own action plan of your company, your situation and what would be the appropriate follow up, because this is something too that senior leadership should be listening to this show and see the implications. You can no longer take the stance. I’m going to source from a US distributor, or US source or whatever, and it’s up to them to make sure that they imported items compliantly and all. You can’t just assume that anymore. It doesn’t absolve you of culpability here. So it’s like you’ve got to get down several different levels. So with that, I will say that, Eric, this is excellent. I think we may have a need to have another show at some point. Get into a little bit more details of some examples of what people have come across. Thank you

Eric Hargraves  39:58

guys so much for having me. I’d be honored to go. Come back and do another show and talk a little bit more about what we’re seeing with our clients. And if we can help anyone, please let us know we’re happy to help

Andy  40:06

Lalo. We’ll have the show notes in with Eric’s contact information and then the other resources that we’ve mentioned today. Any other comments for you? You mentioned that you have a training program on supply chain traceability, right? Yeah,

Lalo  40:25

so we do have that, and it’s coming up. We have two sessions going on before the end of the year, so just try to get in on one of one of the two. And Eric will be there. He’ll be teaching alongside Rene kikarelli, who’s, who’s who everybody already knows is one of our instructors and and another, another instructor. So please join us and check out the show notes for that. Thank you. All

Andy  40:51

right, folks. Well, we’re going to turn this back over to you. I hope you have a great day. Please do one thing for us is, I know you know a lot of you are liking and sharing our show. Please subscribe to our show. We need to increase our subscription. There’s a lot of people listening and watching, and we would love it if you would hit that subscribe button with that. Have a great day. This is Andy, Eric and Lalo from supply or it’s not supply chain. We’ve been talking about supply chain simply trade all right. So have a great day.