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Caught in the trade war crosshairs

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Now, and possibly more than ever, it is critical to be tuned into the geo-political topics that are impacting the direction of global trade, including the pending ratification of the new USMCA, and the implementation of punitive and retaliatory tariffs. Companies should consider how to react to these developments: Is a narrowly defined short-term solution aimed at easing the present potential economic impact the appropriate approach, or is it more appropriate to revisit the supply chain design with a view towards seeking a competitive advantage, or both?

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Caught in the trade war crosshairs

  1. 1. Brought to you by the KPMG U.S. Manufacturing Institute #KPMGauto Caught in the trade war crosshairs 14th Annual Automotive Executive Forum at the North American International Auto Show
  2. 2. 2© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 2 14th Annual Automotive Executive Forum at the North American International Auto Show © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 #KPMGauto CPE Code: 9c62 Moderator and Panelists Moderator Doug Zuvich Partner, Global Practice Leader, Trade & Customs KPMG LLP Everson Ascencio General Director Global Customs General Motors Steve Gardon VP Global Indirect Taxes & Customs Lear Corporation Steven Davis Principal, Value Chain Management KPMG LLP Panelist
  3. 3. 3© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Tariff policy background Steel/Aluminum National security threat $34B in products List 1 List 2 List 3 $16B in products $200B in products Solar panels and washing machines April 2017: Investigation begins, and in March 2018, Trump announces tariffs on steel and aluminum. There are currently limited source country exemptions. Response to China for unfair trade practices; potential IP theft, tech transfer, & innovation Response to China for unfair trade practices; potential IP theft, tech transfer, & innovation Response to China for unfair trade practices; potential IP theft, tech transfer, & innovation October 2017: Findings announced from earlier investigation and "global safeguard" restrictions recommended U.S. RATIONALE TARGET Harming U.S. industries Other active tariff and non-tariff mechanisms used by the US include anti-dumping, countervailing duty (“CVD”) orders, quotas and “voluntary” restraint orders Section 301 Section 232Section 201 May 2018: Second national security investigation launched and potential raise on imports of automobiles and automotive parts Automotive
  4. 4. 4© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 China (for §232) Tariff rate: 15% and 25% depending on the good Effective date: April 2nd HTS codes affected (Qty): 128 Import value affected ($): $2.4 billion Products targeted: Wine, fruit, ethanol, steel tubes, drill pipes, aluminum waste. Mexico Tariff rate: 5% – 25% Effective date: June 5th HTS codes affected (Qty): 266 Import value affected ($): $3 billion Products targeted: Pork, potatoes, whiskey and other products Turkey Tariff rate: Ranges up to 140% Effective date: June 21st HTS codes affected (Qty): 22 Import value affected ($): $1.8 billion Products targeted: Coal, paper, tobacco, automobiles, cosmetics, machinery, petrochemical products. Aug. 2018: In response to U.S. doubling steel tariffs, Turkey doubled some tariffs, e.g. alcohol, cars, tobacco. European Union Tariff rate: 25% Effective date: June 22nd HTS codes affected (Qty): 340, (effective June 22nd) Import value affected ($): 3.4 billion (effective June), $3.6 billion (under review) Products targeted: Steel, whiskey, coffee, motorcycles, motorboats, apparel and peanut butter Canada Tariff rate: 25% or 10% depending on the good Effective date: July 1st HTS codes affected (Qty): 229 Import value affected ($): $12.6 billion Products targeted: Steel, iron, motorboats, musical instruments, yogurt, bourbon, ketchup, pizza, dishwasher detergent and various other items China (for §301) Tariff rate: 25% Effective date: July 6th HTS codes affected (Qty): 659 Import value affected ($): $34 billion. Additional $16B scheduled, with $60B potentially planned. Products targeted: Soy, corn, wheat, cotton, beef, pork, poultry, fish, dairy, nuts, and vegetables, as well as manufactured goods including passenger cars, and off-road vehicles. Russia Tariff rate: 25% – 40% Effective date: July 6th HTS codes affected (Qty): 79 Import value affected ($): Total amount TBD Products targeted: Construction, oil and gas, metal processing and fiber optics India Tariff rate: 25% or 27.5% depending on the good Effective date: September 18th HTS codes affected (Qty): 30 Import value affected ($): $240 million Products targeted: Apples, walnuts, chickpeas, and some chemical and metal products. USMCA/NAFTA 2.0 – Steel and Aluminum Tariffs Remain Australia, Argentina, Brazil and S Korea (KORUS) - Agreed to Steel Quotas = No Tariffs Seeking Bi-lateral Agreements with – UK, EU and Japan Overview of global retaliatory tariffs
  5. 5. 5© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 What to expect (developed in collaboration with Eurasia Consulting) US-China: A “truce” as trade talks begin, but big hurdles remain — Further escalation of tariffs under Section 301 on hold for 90 days (from 1 Dec.), but core issues remain hard to resolve: IP, tech transfer, subsidies, industrial policy, Made in China 2025 — Dispute isn’t just about tariffs: Technology may be the biggest challenge Steel, aluminum (section 232 tariffs) — Tenuous framework for negotiation is in place, but 232 tariffs on steel and aluminum are likely to stay in place through 2019 Automotive (section 232 tariffs) — Auto tariffs are a real risk for 2019 but on balance probably unlikely given very strong opposition from the automotive industry and little support among republicans in Congress. Global trade tensions will remain elevated — The US has turned more protectionist — US-China tensions are rising over a range of issues, including fair trade and technology
  6. 6. 6© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Enterprise-Wide Mitigation Strategy The cost fallout from tariffs creates pressure across the enterprise – how to protect EBITDA? Deep Data Driven Analysis Risk, Controls and Change Management Economic Impact Analysis Commercial Operations (Supply Chain) Trade & Customs Mitigating Remedial Exposure Cost Optimization
  7. 7. 7© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 KPMG deploys a multi-functional framework and methodology to guide our clients through assessing, managing and mitigating the impact of the new tariffs. Leveraging this framework, and supporting tools, enables KPMG to assist its clients in defining its specific mitigation strategy in a thoughtful and methodical manner. Integrated tariff mitigation framework Core Trade Assess Impact Confirm Base Case Measure Impact Tariff classification Country of origin Identification of indirect imports through suppliers Review of country specific import data Understand supplier and customer contractual agreements Identification of impacted products Measure the Economic Impact Of Increased Tariffs On The Base Case Tariffmitigation Analysis Value Classification / Origin Distribution First Sale For Export Transfer Pricing Value Unbundling Exclusion Requests HTS Classification Changes Country of Origin Changes Free Trade Zone Free Trade Agreements Duty Drawback Temporary Import Under BondUS Goods Advanced in Value Alignment and Coordination Alignment and Coordination Re-Assess Economic Impact of Tariffs Assess Economic Impact of Proposed Changes to Operations and Commercial Consider Tax and Treasury Implications and Opportunities Assess Impact on Enterprise Value Upstream Inside Downstream Alternative Suppliers Operations (Supply Chain) Supplier Rationalization vs. Diversification Customer Contracts Commercial Alternative Sourcing Market Share/ Growth Supply Chain Strategy Manufacturing Footprint Inventory Management Make vs. Buy Low Cost Production Supplier Pricing Revenue Customer Pricing Competitor Response Build vs. Outsource Capacity Shirt and Retool Network Design Logistics & Transportation Warehouse Management Brand New Competitors Product Mix Supplier Contracts Supplier Health
  8. 8. 8© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 — Impact varies significantly by company — Overall industry impact of increased domestic steel and aluminum prices — Exemption process – not predictable and adds new element to market — For Mexico and Canada, generally viewed as short-term issue that will get resolved with the new USMCA Panelist: Section 301 and 232 tariffs perspective
  9. 9. 9© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Short-Term — Limited and burdensome options to mitigate impact — Difficult to re-sources suppliers due to production/customer requirements Longer-Term — Look at re-sourcing China suppliers to other country locations — Increasing view that sourcing from China will be less attractive Panelist: Section 301 tariffs and China retaliatory tariffs
  10. 10. 10© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 — Potential significant impact on the automotive industry depending on scope of tariffs — Trump Administration currently assessing different options for tariffs, from limited to comprehensive tariffs on most vehicles and parts — Department of Commerce must finalize its report and issue to the Administration by late February Panelist: Auto and auto parts 232 tariffs
  11. 11. USMCA - Automotive
  12. 12. 12© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Key modifications and changes - USMCA What stayed the same or similar What changed — Drawback deferral rules — Some rules of origin — Exporter/Producer Verification — Intermediate material rules — Net Cost — Transaction Value — Protest period still 12 months — Certification of origin — Qualification De-minimis allowance — Some rules of origin —Everything automotive — Tracing rules — Importer Origin Verification — Ability to negotiate agreements with non-member countries
  13. 13. 13© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 USMCA rules for passenger vehicles and light trucks* NAFTA USMCA qualification requirements 62.5% RVC 1 75% RVC after phase in Tracing List to track value of certain parts in North America. 2 75% RVC for Table A.2 – requires that certain core parts must originate in North America – within each core part certain components must originate; No such requirement 3 70% Steel and 70% Aluminum from North America No such requirement 4 Labor Value Content = US$16 per hour Traced Value = Non-originating – had to be traced through vehicle; not traced parts were deemed originating Roll Up – if item qualifies for NAFTA consider entire value of item *Appendix to Annex 4-B: Provisions related to the product–specific rules of origin for automotive goods
  14. 14. 14© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Core Part RVC Requirement 4-B.3 Table A.2 Parts listed in Column 1 must be qualifying for USMCA When calculating the RVC for Column 1 items, vehicle producer has choice as to what is considered non-originating: 1. Sum of Column 2 items only; or 2. Sum of all non-originating parts Option to sum net cost of each item in Column 1 and sum of all non-originating in Column 2 Table A.2 Automotive Column 1 Column 2 Engine Heads, Blocks, Crankshafts, Pistons, Rods, Head subsassembly Transmission Transmission cases, torque converters, torgue converter housings, gears and gear blanks, clutches value body assembly Body and Chassis Major body panels, secondary panels, structural panels, frames Axle Axle shafts, axle hubs, carriers, differentials Suspension System Shock absorbers, struts, control arms, sway bars, knuckles, coil springs, leaf springs Steering System Steering columns, steering gear/racks control units Battery Cells, modules/arrays, assembled packs
  15. 15. 15© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Suppliers Qualification Requirements Automotive (continued) Category of Parts Core RVC Annex 1* Principle Auto parts: Annex 2 Complimentary auto parts: Annex 3 Example Parts Engine Transmission Bodies for Cars Drive Axles Steering Systems Tires Air Conditioners Brakes Turbochargers Bumpers Safety Airbags Check Valves Sealed Beam Lamps Checking Instruments Wire Harnesses Locks Distributors Final Stage using net cost method 75% 70% 65% *Appendix to Annex 4-B
  16. 16. 16© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Suppliers Qualification Requirements Staged Increased RVC for Part for Passenger Vehicles and Light Trucks* Automotive (continued) Passenger Vehicles and Light Trucks* Core RVC Annex 1* Principle Auto parts: Annex 2 Complimentary auto parts: Annex 3 Effective Or if later… 66% 66% 62.5% 62% January 1, 2020 The date of entry into force 69% 69% 65% 63% January 1, 2021 One year after the date of entry into force 72% 72% 67.5% 64% January 1, 2022 Two years after the date of entry into force 75% 75% 70% 65% January 1, 2023 Three years after the date of entry into force *Appendix to Annex 4-B *For all other parts the standard rules of origin and RVC will apply.
  17. 17. 17© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Steel and Aluminum Article 4-B.6 70% - Steel and aluminum – purchased by vehicle producer (parties agreed to decide on definition of steel and aluminum in future) This requirement will apply to a vehicle producer’s purchases throughout North America if the producer has more than one location in a party where steel and aluminum is purchased. Purchases of steel and aluminum include: — Direct purchases by vehicle producer — Purchases through a service center — Purchases through a supplier Automotive (continued)
  18. 18. 18© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Labor Value Content (LVC) US$16/hour (not including benefits): Article 4-B:7 Vehicle Producer shall certify that it meets a Labor Value Content (LVC): — Passenger Vehicles 40% — Light Truck 45% Example to get to 40% could include: 1. Labor cost at the vehicle assembly plant – at least $16/hour 2. Parts produced by suppliers who pay production wage – at least $16/hour – does not include salaries of management, R&D, engineering, etc. 3. Wages for R&D and information technology employees in NA (up to 10% percentage points) 4. Labor cost for one of plants below – at least $16/hour (up to 5% percentage points a) Engine assembly; b) Transmission assembly; or c) Advanced Battery Plant Automotive (continued)
  19. 19. 19© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 A cross-functional framework and methodology is needed to adequately address changes, short-term and long-term, through assessing, managing and mitigating the impact of the new USMCA agreement on the entire supply chain. USMCA readiness assessment framework Next 12 months (give or take) Measure Assess/Improve/Implement Purchasing, Supply and Customer Planning Supply Chain Planning Estimate financial impact of “non beneficial” changes Estimate financial impact of new de minimis rules Estimate financial impact of “beneficial” changes Secure resources – internal, external and systems Complete Implementation Validate classification and costing information Identify configuration requirements for existing systems Assess requirements to automate manual processes Identify new information/ data requirements for qualification Review contract terms Identify gaps and risks Review new rules of origin for all products Develop Business Case Time to conduct end to end assessment of current NAFTA program in preparation of USMCA Analyze use of accumulation Analyze use of intermediate materials rule BOM component sourcing adjustments to impact RVC Manufacturing/supp lier changes Manufacturing/processing alterations to impact classification Impact Analysis Operational Assessment Mitigation/Optimization to improve results Implementation
  20. 20. 20© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 1. Steel & Aluminum: Should not pose an issue to OEMs but will create additional administrative burden. 2. Core Content: Should not pose an issue for OEMs that produce engines and transmissions in North America. This could create a significant challenge for OEMs that import engines and/or transmissions. Ability to treat Core as a single good (versus original requirement that each Core system qualify) minimizes impact of Core requirement. a) Engines and Transmissions: Defined in a way that majority of Core value is made up of self-produced parts for most OEMs. Roll-up allows full value of Engine to be counted as originating. a. Should make qualifying Engines and Transmissions easier under USMCA than under NAFTA. b) Body: Should qualify by default for all OEMs c) Axle: Defined in a way that non-originating parts, e.g., electrical components, do not impact RVC. d) Suspension: Low value percentage of Core value. Treating Core as single good makes these components non-critical. e) Steering: Low value percentage of Core value. Treating Core as single good makes these components non-critical. f) Advance Battery: Tariff shift provision preserved. As long as assembly/production is in North America should qualify by default. Panelist: An OEM perspective
  21. 21. 21© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 3. Regional Value Content: Passenger and Light Duty requirements will make qualification more difficult, which will increase use of averaging. New averaging category (class by territory) should help minimize impact. a. Exception made for Diesel passenger vehicles to account for powertrain sourcing limitations. b. Heavy Duty trucks less impacted than Light Duty trucks. 4. Labor Value Content: US and Canada production should easily meet this requirement, especially for UAW OEMs. Mexico production will likely create greatest challenge to OEMs. a. US OEMs should qualify for 10pt R&D credit and 5pt Eng/Trans credit. b. Most Japanese OEMs should qualify for Eng/Trans credit. c. European OEMs most at risk for qualifying for credits. Panelist: An OEM perspective (continued)
  22. 22. 22© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Increased North American Content and Other New Requirements — Vehicles and most auto parts have stricter rules of origin and will need more North American content to qualify under the new Agreement — Elimination of tracing rules makes the content increase more significant — Generally, OEMs and suppliers will need to re-source more parts from North American suppliers — This change will require the support and approval of OEM customers due to significant number of directed suppliers and supplier certification requirements — As a result, sourcing location and USMCA status of products will become more important element of commercial relationships between OEMs and suppliers and among suppliers — Steel and aluminum and Labor Value Content requirements are new, additional and separate requirements for OEMs and can involve suppliers — Overall Increased compliance burden for OEMs and suppliers Panelist: A Supplier Perspective
  23. 23. 23© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Rules of origin before and after summary Requirement(s) Category RVC Tariff Shift Notes Requirement(s) Category RVC Tariff Shift Notes Regional Value Content Motor Vehicle 62.5% No (1) Most automotive parts subject to Tracing* Labor Value Content Passenger Vehicle 40.0% N/A (1) 10 pt credit for R&D Heavy Duty Truck 60.0% Light & Heavy Duty Trucks 45.0% (2) 5 pt credit for Eng, Trans or Battery plant Parts 50%- 62.5% Steel & Aluminum All 70.0% N/A (*) Tracing: required including non-originating value of certain goods regardless of the goods eligibility status. Goods that were not traced were "deemed" originating. Core Content Engine 75.0% No (1) Core RVC can be calculated for each component -or- all Core components can be treated as one product. Transmission No (2) Diesel engines for passenger vehicles remain at 62.5% Body No Axle No Suspension No Steering No Advance Battery Yes Regional Value Content Passenger Vehicle - Gas 75.0% No (1) Tracing eliminated for all categories Passenger Vehicle - Diesel No change No Light Duty Trucks 75.0% No Heavy Duty Trucks 70.0% No Principal Parts 70.0% Yes Complimentary Parts 65.0% Yes Other Parts No change Yes NAFTA USMCA
  24. 24. 24© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 14th Annual Automotive Executive Forum at the North American International Auto Show #KPMGauto CPE Code: 9c62 Closing Companies will need to develop insights into their ability to pivot around new tariffs, protectionist stances or whatever the next wave will be while considering their current contingency plans and risk diversification opportunities. In doing so, it’s important to assemble a cross-functional team with deep subject matter experience to provide insights and recommendations regarding the potential impacts to a company’s — Supply chain footprint strategy — Operating model — Brand strategy — Capital structure — Trade and tax positions Companies should be prepared to answer questions such as: What should we do now? How might we be affected? What are our options?
  25. 25. © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 817205 The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. kpmg.com/socialmedia

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